##### Table of Contents

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SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549

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FORM 10-Q

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|(Mark One)                                            
|------------------------------------------------------
|                                                      
|x                                                     
|                                                      
|                                                      
|                                                      
|OR                                                    
|                                                      
|o                                                     
|                                                      
|                                                      
|                                                      
|Commission file number:  333-84416                    
|                                                      
|                                                      
|                                                      
|NextMedia Operating, Inc.                             
|(Exact name of registrant as specified in its charter)
|                                                      
|                                                      

|Delaware                                                                           |  | 84-154397                        
|---------------------------------------------------------------------------------- |  | ---------------------------------
|(State or other jurisdiction of incorporation or organization)                     |  | (IRS Employer Identification No.)
|                                                                                   |  |                                  
|6312 S. Fiddlers Green Circle, Suite 360E Greenwood Village, Colorado              |  | 80111                            
|(Address of principal executive offices)                                           |  | (Zip Code)                       
|                                                                                  
|(303) 694-9118                                                                    
|(Registrants telephone number, including area code)                              
|                                                                                  
|Not Applicable                                                                    
|(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

|Yes x | No o
|----- | ----

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

|Yes o | No x
|----- | ----

The
total number of shares of common stock, par value $.01 per share, outstanding as of August 13, 2003 was 3,000.  The Registrant has no other class of common stock outstanding.

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##### Table of Contents

TABLE OF CONTENTS

|PART I  |         |                                                                                                 |   
|------- | ------- | ----------------------------------------------------------------------------------------------- | --
|        |         |                                                                                                 |   
|        | Item 1. | Unaudited Financial Statements                                                                  |   
|        |         |                                                                                                 |   
|        |         | Consolidated Balance Sheets as of December 31, 2002 and June 30, 2003                           | 3 
|        |         |                                                                                                 |   
|        |         | Consolidated Statements of Operations for the three and six months ended June 30, 2002 and 2003 | 4 
|        |         |                                                                                                 |   
|        |         | Consolidated Statements of Cash Flows for the six months ended June 30, 2002 and 2003           | 5 
|        |         |                                                                                                 |   
|        |         | Notes to Consolidated Financial Statements                                                      | 6 
|        |         |                                                                                                 |   
|        | Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations           | 18
|        |         |                                                                                                 |   
|        | Item 3. | Quantitative and Qualitative Disclosure About Market Risk                                       | 24
|        |         |                                                                                                 |   
|        | Item 4. | Controls and Procedures                                                                         | 24
|        |         |                                                                                                 |   
|PART II |         |                                                                                                 |   
|        |         |                                                                                                 |   
|        | Item 1. | Legal Proceedings                                                                               | 25
|        |         |                                                                                                 |   
|        | Item 2. | Changes in Securities                                                                           | 25
|        |         |                                                                                                 |   
|        | Item 3. | Defaults Upon Senior Securities                                                                 | 25
|        |         |                                                                                                 |   
|        | Item 4. | Submission of Matters of a Vote of Security Holders                                             | 25
|        |         |                                                                                                 |   
|        | Item 5. | Other Information                                                                               | 25
|        |         |                                                                                                 |   
|        | Item 6. | Exhibits and Reports on Form 8-K                                                                | 25

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NEXTMEDIA OPERATING, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)

|                                                                                                       |  | December 31, 2002 |         | June 30, 2003 |  
|------------------------------------------------------------------------------------------------------ |  | ----------------- | ------- | ------------- | -
|                                                                                                       |  |                   |         |               |  
|Assets                                                                                                 |  |                   |         |               |  
|Current assets:                                                                                        |  |                   |         |               |  
|Cash and cash equivalents                                                                              |  | $                 | 14,446  |               | $
|Accounts receivable, net of allowance for doubtful accounts of $1,248 and $1,128, respectively         |  |                   | 14,407  |               |  
|Prepaid expenses and other current assets                                                              |  |                   | 2,225   |               |  
|                                                                                                       |  |                   |         |               |  
|Total current assets                                                                                   |  |                   | 31,078  |               |  
|Property and equipment, net                                                                            |  |                   | 53,103  |               |  
|Other assets                                                                                           |  |                   | 13,674  |               |  
|Goodwill, net                                                                                          |  |                   | 119,259 |               |  
|FCC licenses, net                                                                                      |  |                   | 256,410 |               |  
|Other intangibles, net                                                                                 |  |                   | 960     |               |  
|Assets held for sale                                                                                   |  |                   | 5,411   |               |  
|                                                                                                       |  |                   |         |               |  
|Total assets                                                                                           |  | $                 | 479,895 |               | $
|                                                                                                       |  |                   |         |               |  
|Liabilities and Stockholders Equity                                                                   |  |                   |         |               |  
|Current liabilities:                                                                                   |  |                   |         |               |  
|Accounts payable                                                                                       |  | $                 | 2,481   |               | $
|Accrued expenses                                                                                       |  |                   | 15,740  |               |  
|Deferred revenue                                                                                       |  |                   | 622     |               |  
|Other                                                                                                  |  |                   | 9       |               |  
|                                                                                                       |  |                   |         |               |  
|Total current liabilities                                                                              |  |                   | 18,852  |               |  
|Long-term debt                                                                                         |  |                   | 197,276 |               |  
|Deferred tax liability                                                                                 |  |                   | 4,311   |               |  
|Other long-term liabilities                                                                            |  |                   | 2,088   |               |  
|                                                                                                       |  |                   |         |               |  
|Total liabilities                                                                                      |  |                   | 222,527 |               |  
|                                                                                                       |  |                   |         |               |  
|Commitments and contingencies (Note 8)                                                                 |  |                   |         |               |  
|Stockholders equity:                                                                                  |  |                   |         |               |  
|Common stock, par value $0.01 per share, 3,000 shares authorized, issued and outstanding, respectively |  |                   | 1       |               |  
|Additional paid-in capital                                                                             |  |                   | 325,436 |               |  
|Accumulated deficit                                                                                    |  |                   | (68,069 | )             |  
|                                                                                                       |  |                   |         |               |  
|Total stockholders equity                                                                             |  |                   | 257,368 |               |  
|                                                                                                       |  |                   |         |               |  
|Total liabilities and stockholders equity                                                             |  | $                 | 479,895 |               | $
|                                                                                                       |  |                   |         |               |  

The accompanying notes are an integral part of these consolidated financial
statements.

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NEXTMEDIA OPERATING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands) (Unaudited)

|                                                                                           |  | Three Months Ended June 30, |        | Six Months Ended June 30, |  
|------------------------------------------------------------------------------------------ |  | --------------------------- | ------ | ------------------------- | -
|                                                                                           |  |                             |        |                           |  
|                                                                                           |  | 2002                        |        | 2003                      |  
|                                                                                           |  |                             |        |                           |  
|Gross revenue                                                                              |  | $                           | 25,635 |                           | $
|Less:  agency commissions                                                                  |  |                             | 2,007  |                           |  
|                                                                                           |  |                             |        |                           |  
|Net revenue                                                                                |  |                             | 23,628 |                           |  
|Market level expenses                                                                      |  |                             | 15,125 |                           |  
|Corporate expenses                                                                         |  |                             | 2,237  |                           |  
|Depreciation and amortization                                                              |  |                             | 1,312  |                           |  
|                                                                                           |  |                             |        |                           |  
|Total operating expenses                                                                   |  |                             | 18,674 |                           |  
|                                                                                           |  |                             |        |                           |  
|Operating income                                                                           |  |                             | 4,954  |                           |  
|Interest expense, net                                                                      |  |                             | 5,567  |                           |  
|Other (income) expense                                                                     |  |                             | (1,041 | )                         |  
|                                                                                           |  |                             |        |                           |  
|Income (loss) from continuing operations before income taxes                               |  |                             | 428    |                           |  
|Provision for income taxes                                                                 |  |                             | 2,329  |                           |  
|                                                                                           |  |                             |        |                           |  
|Loss from continuing operations                                                            |  |                             | (1,901 | )                         |  
|Discontinued operations:                                                                   |  |                             |        |                           |  
|(Gain) loss from discontinued operations (including loss on disposition of $3,272 in 2002) |  |                             | 3,317  |                           |  
|                                                                                           |  |                             |        |                           |  
|Net loss                                                                                   |  | $                           | (5,218 | )                         | $
|                                                                                           |  |                             |        |                           |  

The accompanying notes are an integral part of these consolidated financial
statements.

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NEXTMEDIA OPERATING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)

|                                                                            |  | Six Months ended June 30, |        
|--------------------------------------------------------------------------- |  | ------------------------- | -------
|                                                                            |  |                           |        
|                                                                            |  | 2002                      |        
|                                                                            |  |                           |        
|Cash Flows From Operating Activities                                        |  |                           |        
|Net loss                                                                    |  | $                         | (25,171
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                           |        
|Depreciation and amortization                                               |  |                           | 2,602  
|Non-cash interest expense                                                   |  |                           | 604    
|Provision for bad debt expense                                              |  |                           | 669    
|Non-cash compensation expense                                               |  |                           | 39     
|Unrealized (gain)/loss on interest rate swap                                |  |                           | (921   
|Provision for deferred taxes                                                |  |                           | 17,869 
|Loss on pending sale and other dispositions                                 |  |                           | 3,501  
|Changes in assets and liabilities, net of effect of acquisitions:           |  |                           |        
|Accounts receivable                                                         |  |                           | (1,716 
|Prepaid expenses and other assets                                           |  |                           | (501   
|Accounts payable and accrued expenses                                       |  |                           | (759   
|Deferred revenue                                                            |  |                           | 146    
|Other current liabilities                                                   |  |                           |       
|                                                                            |  |                           |        
|Net cash used in operating activities                                       |  |                           | (3,638 
|                                                                            |  |                           |        
|Cash Flows From Investing Activities                                        |  |                           |        
|Purchase of fixed assets                                                    |  |                           | (3,145 
|Payments for acquisitions, net of cash acquired                             |  |                           | (7,554 
|Purchase of short-term investments                                          |  |                           | (9,478 
|Deferred selling costs                                                      |  |                           |       
|Proceeds from sale of properties                                            |  |                           | 1,213  
|                                                                            |  |                           |        
|Net cash used in investing activities                                       |  |                           | (18,964
|                                                                            |  |                           |        
|Cash Flows From Financing Activities                                        |  |                           |        
|Proceeds from revolving credit facilities                                   |  |                           |       
|Repayment of revolving credit facilities                                    |  |                           |       
|Equity capital contributions from Parent, net                               |  |                           | 185    
|Payments of financing related costs                                         |  |                           | (463   
|Other                                                                       |  |                           | 45     
|                                                                            |  |                           |        
|Net cash provided by (used in) financing activities                         |  |                           | (233   
|                                                                            |  |                           |        
|Decrease in cash and cash equivalents                                       |  |                           | (22,835
|Cash and cash equivalents at beginning of period                            |  |                           | 30,501 
|                                                                            |  |                           |        
|Cash and cash equivalents at end of period                                  |  | $                         | 7,666  
|                                                                            |  |                           |        
|Supplemental Cash Flow Information                                          |  |                           |        
|Cash payments during the period for:                                        |  |                           |        
|Interest                                                                    |  | $                         | 10,684 
|                                                                            |  |                           |        

The accompanying notes are an integral part of these consolidated financial
statements.

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NEXTMEDIA OPERATING, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands)

1.   INTERIM FINANCIAL DATA AND SIGNIFICANT ACCOUNTING
POLICIES

The accompanying consolidated unaudited interim financial statements have been prepared in accordance with accounting
principles generally accepted in the United States for interim financial information.  Management believes that the Company has made all adjustments necessary for a fair presentation of results of the interim periods and that these adjustments
were of a normal and recurring nature.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or
omitted.  The interim results of operations and cash flows are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2003, due to seasonality and other factors.  You should read the
consolidated financial statements in conjunction with the consolidated financial statements of NextMedia Operating, Inc. and the notes thereto included in our annual report on Form 10-K, as filed with the Securities and Exchange Commission on
March 27, 2003.  In this quarterly report on Form 10-Q, references to the Company, we, our and us refer to NextMedia Operating, Inc. and its subsidiaries, and the term NextMedia
refers only to NextMedia Operating, Inc.

The balances of certain prior periods have been reclassified to conform to the current
periods presentation.

2.   Recent Accounting Pronouncements

In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities, which is
effective immediately for all enterprises with interest in variable interest entities created after January 31, 2003.  FIN 46 must be applied to interests in variable interest entities created before February 1, 2003 beginning in the first
interim period beginning after June 15, 2003.  The Company has not had any interest in a variable interest entity during the period to which FIN 46 applies.  The Company will apply the provisions of FIN 46 in future periods should a
variable interest entity be acquired.

In November 2002, the Emerging Issues Task Force reached a consensus on Issue No. 00-21,
Revenue Arrangement with Multiple Deliverables (EITF No. 00-21).  This issue addresses how revenue arrangements with multiple deliverables should be divided into separate units of accounting and how the arrangement
consideration should be allocated to the identified separate accounting units. EITF No. 00-21 is effective for fiscal periods beginning after June 15, 2003. Where multiple elements exist in an arrangement, the arrangement fee is allocated to the
different elements based upon verifiable objective evidence of the fair value of the elements. The Company does not expect that the adoption of EITF No. 00-21 will have a material impact on the Companys financial statements.

In May 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. SFAS 149 provides
for certain changes in the accounting treatment of derivative contracts. SFAS 149 is effective for contracts entered into or modified after June 30, 2003, except for certain provisions that relate to SFAS No. 133 Implementation Issues that have been
effective for fiscal quarters that began prior to June 15, 2003, which should continue to be applied in accordance with their respective effective dates.  The guidance should be applied prospectively. Management anticipates that the adoption of
SFAS No. 149 will not have a material impact on the Companys financial statements.

Also in May 2003, the FASB issued SFAS No. 150,
Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This new statement changes the accounting for certain financial instruments that, under previous guidance, issuers could account for as
equity. It requires that those instruments be classified as liabilities in the balance sheets. Most of the guidance in SFAS 150 is effective for all financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the
beginning of the Companys first interim period beginning after June 15, 2003. Management anticipates that the adoption of SFAS No. 150 will not have a material impact on the Companys financial statements.

3.   Acquisitions and Dispositions

Part of the Companys operating strategy is to
expand through prudent acquisition of broadcasting and outdoor advertising properties.  The Company acquired each of the advertising assets identified below to help achieve this objective.  In seeking acquisition opportunities, the Company
generally seeks:  (i) assets in markets with a demographic propensity for growth (i.e., population growth above average, above average growth in retail sales, etc.), (ii) markets where the Company

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NEXTMEDIA OPERATING, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands)

believes it can assemble a group of assets generating over $1,000 in annual cash flow from operations, and (iii) assets in markets where the Company believes it can become a leader in terms of ratings, revenue share,
or number of advertising faces.  Each of the acquisitions below meet at least one of these criteria.

On January 6, 2003, the
Company completed the previously announced acquisition of four FM radio stations and one AM radio station operating in the Saginaw/Bay City/Midland, Michigan markets from Wilks Broadcasting, LLC for approximately $55,500.  The Company funded
the acquisition with borrowings of $26,000 under its Senior Credit Facility, proceeds from a private equity commitment of $27,100, and cash on hand.

On January 31, 2003, the Company completed the previously announced acquisition of three FM stations and one AM station operating in the Sherman/Denison, Texas and
Ardmore, Oklahoma markets for approximately $5,500.  Simultaneously, the Company disposed of five radio stations in the Panama City, Florida market for approximately $5,500.

In February 2003, the Company completed the acquisition of certain outdoor advertising assets in New Jersey for approximately $4,700, $600 of which was funded with a
cash deposit made during 2002.  The Company funded the remaining $4,100 in February 2003 with $4,000 of borrowings under the Senior Credit Facility and cash on hand.

The results of operations of the assets acquired during the three and six months ended June 30, 2003 have been included in the Companys income statement
from the completion date of the applicable acquisition.  The results of operations of assets sold during the three and six months ended June 30, 2003 have been excluded from the Companys income statement from the completion date of
the applicable sale.

The following unaudited pro forma income statement information has been prepared as if the acquisitions made during
the year ended December 31, 2002 and the six months ended June 30, 2003 had occurred on January 1, 2002.  The pro forma income statement information is not necessarily indicative of the results, which actually would have occurred if these
acquisitions had been consummated on January 1, 2002.

|               |  | Six months ended June 30, |        
|-------------- |  | ------------------------- | -------
|               |  |                           |        
|               |  | 2002                      |        
|               |  |                           |        
|Net revenues   |  | $                         | 49,674 
|Total expenses |  |                           | 74,348 
|               |  |                           |        
|Net loss       |  | $                         | (24,674
|               |  |                           |        

In April 2003, the Company entered into
agreements to sell the assets of WAIT-AM in its Chicago suburban market to Newsweb Corporation for $8,250 and acquire the assets of KNHK-FM in Reno, Nevada from Citadel Broadcasting Company for $4,250.  In order to the purchase KNHK-FM in
compliance with the FCCs station ownership regulation, the Company will be required to divest a station in the Reno market.  Consequently, in July 2003, the Company entered into an agreement to sell the assets of KSRN-FM in Reno, Nevada
to Lazer Broadcasting Corp. for $2.5 million in cash.  In May 2003, the Company entered into an agreement to sell certain of the assets of WJTW-FM in its Chicago suburban market to Hispanic Broadcasting Corporation for $21,000 in cash. 
The Company expects each of the foregoing transactions to close as soon as practicable after the FCC terminates its hold on license transfer applications and begins to review and approve the applications.

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NEXTMEDIA OPERATING, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands)

4.   Property and Equipment

Property and equipment consist of the
following:

|                              |  | Depreciable Life |        | As of December 31, 2002 |   | As of June 30, 2003 |  
|----------------------------- |  | ---------------- | ------ | ----------------------- | - | ------------------- | -
|                              |  |                  |        |                         |   |                     |  
|Land and improvements         |  |                  |       |                         | $ | 5,385               |  
|Construction in progress      |  |                  |       |                         |   | 935                 |  
|Buildings and improvements    |  |                  | 20     |                         |   | 8,308               |  
|Leasehold improvements        |  |                  | 10     |                         |   | 1,971               |  
|Broadcast equipment           |  |                  | 5  20 |                         |   | 7,042               |  
|Office equipment              |  |                  | 7      |                         |   | 1,691               |  
|Computer software and systems |  |                  | 3  5  |                         |   | 1,638               |  
|Tower and antennae            |  |                  | 5  20 |                         |   | 3,250               |  
|Vehicles                      |  |                  | 3      |                         |   | 1,376               |  
|Furniture and fixtures        |  |                  | 7      |                         |   | 1,176               |  
|Advertising displays          |  |                  | 3  15 |                         |   | 29,461              |  
|                              |  |                  |        |                         |   |                     |  
|                              |  |                  |        |                         |   | 62,233              |  
|Less accumulated depreciation |  |                  |        |                         |   | (9,130              | )
|                              |  |                  |        |                         |   |                     |  
|                              |  |                  |        |                         | $ | 53,103              |  
|                              |  |                  |        |                         |   |                     |  

5.   Intangible Assets

Intangible assets consist of the following:

|                               |  | Estimated Useful Life |        | As of December 31, 2002 |   | As of June 30, 2003 |  
|------------------------------ |  | --------------------- | ------ | ----------------------- | - | ------------------- | -
|                               |  |                       |        |                         |   |                     |  
|Gross:                         |  |                       |        |                         |   |                     |  
|FCC licenses                   |  |                       |       |                         | $ | 265,471             |  
|Goodwill                       |  |                       |       |                         |   | 120,185             |  
|Definite lived intangibles     |  |                       |       |                         |   | 2,356               |  
|                               |  |                       |        |                         |   |                     |  
|                               |  |                       |        |                         | $ | 388,012             |  
|                               |  |                       |        |                         |   |                     |  
|Less accumulated amortization: |  |                       |        |                         |   |                     |  
|FCC licenses                   |  |                       |       |                         | $ | (9,061              | )
|Goodwill                       |  |                       |       |                         |   | (926                | )
|Definite lived intangibles     |  |                       | 1  15 |                         |   | (1,396              | )
|                               |  |                       |        |                         |   |                     |  
|                               |  |                       |        |                         |   | (11,383             | )
|                               |  |                       |        |                         |   |                     |  
|                               |  |                       |        |                         | $ | 376,629             |  
|                               |  |                       |        |                         |   |                     |  

The aggregate change in goodwill and FCC licenses in the period from December 31, 2002 resulted
entirely from the Companys acquisitions of radio and outdoor assets during the period.  There were no impairment losses recognized during the period and no reporting units were disposed of.

While FCC licenses are renewed annually, under current regulations, the renewal is conditioned only on continued compliance with the terms of the license and payment of the annual license fee.  As a result, as long as the
Company continues to comply with the license terms and pays the annual fee (both of which are within the Companys control) the license will not expire or be revoked.  Additionally, the Company believes that there are no current
competitive forces which threaten the viability of FCC licenses as a useful asset in the long-term.  Consequently, we believe that the license has an indefinite life as defined by SFAS 142.

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NEXTMEDIA OPERATING, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands)

Definite lived Intangible Assets

The Company has definite-lived intangible assets recorded that
continue to be amortized in accordance with SFAS 142.  These assets consist primarily of non-compete agreements and customer lists which are amortized over the respective estimated lives of the assets.  Total amortization expense from
definite-lived intangible assets for the six months ended June 30, 2003 was approximately $1,919.  The following table presents managements estimate of amortization expense for each of the five succeeding fiscal years for definite-lived
intangibles as of the dates indicated.  The most significant definite-lived intangible assets acquired by the Company are existing customer bases which have relatively short useful lives due to customer turnover.  Consequently, the Company
applies an accelerated amortization methodology to these assets.

|2004 |  | $ | 2,145 | 
|---- |  | - | ----- | 
|2005 |  |   | 1,242 | 
|2006 |  |   | 748   | 
|2007 |  |   | 492   | 
|2008 |  |   | 340   | 

6.   Accrued Expenses

Accrued expenses consist of the following:

|                                 |  | As of December 31, 2002 |        | As of June 30, 2003 |  
|-------------------------------- |  | ----------------------- | ------ | ------------------- | -
|                                 |  |                         |        |                     |  
|Accrued compensation and bonuses |  | $                       | 1,298  |                     | $
|Accrued commissions              |  |                         | 579    |                     |  
|Accrued interest                 |  |                         | 10,253 |                     |  
|Accrued property taxes           |  |                         | 415    |                     |  
|Accrued rents                    |  |                         | 574    |                     |  
|Unfavorable leases               |  |                         | 405    |                     |  
|Accrued franchise taxes          |  |                         | 461    |                     |  
|Accrued insurance costs          |  |                         | 530    |                     |  
|Accrued music license fees       |  |                         | 61     |                     |  
|Net barter payable               |  |                         | 233    |                     |  
|Other                            |  |                         | 931    |                     |  
|                                 |  |                         |        |                     |  
|                                 |  | $                       | 15,740 |                     | $
|                                 |  |                         |        |                     |  

7.   Long-Term Debt

Long-term debt consists of the following:

|                          |  | As of December 31, 2003 |         | As of June 30, 2003 |  
|------------------------- |  | ----------------------- | ------- | ------------------- | -
|                          |  |                         |         |                     |  
|Revolving Credit Facility |  | $                       |        |                     | $
|Senior Subordinated Notes |  |                         | 200,000 |                     |  
|Unamortized discount      |  |                         | (2,724  | )                   |  
|                          |  |                         |         |                     |  
|Total long-term debt      |  | $                       | 197,276 |                     | $
|                          |  |                         |         |                     |  

The Companys senior credit facility
contains customary restrictive covenants that, among other things, limit the Companys ability to incur additional indebtedness and liens in connection therewith, pay dividends and make capital expenditures above specified limits.  Under
the senior credit facility, the Company must satisfy specified financial covenants, such as a maximum total leverage ratio, a maximum senior leverage ratio and a minimum ratio of consolidated EBITDA to consolidated net cash interest expense. 
If future financial results are not sufficient to meet the requirements of the Companys financial covenants, the lenders could accelerate the payment of any outstanding principal and interest amounts.  Should this occur, the Company would
attempt to obtain a waiver of the covenant violation from the lenders or seek an

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alternate source of financing.  However, there can be no assurance that the Company would be able to obtain a waiver or an alternate source of financing.  As of June 30, 2003, the Company was in compliance
with all of these covenants.  After taking into account these restrictive covenants, as of June 30, 2003, the Company had approximately $12.5 million of borrowing capacity under its senior credit facility.

The Companys 10.75% senior subordinated notes due 2011 require the Company to make semi-annual interest payments of approximately $10.8 million on
January 1 and July 1 of each year.  The indenture governing the notes contains certain restrictive covenants that, among other things, limit the Companys ability to incur additional indebtedness and pay dividends.  As of
June 30, 2003, the Company was in compliance with these covenants.

8.   Commitments and Contingencies

As of July 10, 2003, the Company had $1,428 in letters of credit outstanding as deposits to secure obligations.

From time to time, the Company is subject to routine litigation incident to its business.  Management does not expect any of these matters to have a material
adverse effect upon the Companys liquidity, results of operations or financial position.

The Company has no direct or indirect
guarantees of indebtedness of others.

9.   Segment Data

The
Company has determined that two reportable operating segmentsradio broadcasting and outdoor advertisingbest reflect the Companys current management and operations.

The radio broadcasting segment is comprised of radio stations and networks for which the Company is the licensee or for which the Company programs and sells on-air
advertising time under local marketing agreements.  At June 30, 2003, the radio broadcasting segment included 60 radio stations owned and operated by the Company.  No stations or networks were operated pursuant to local marketing
agreements during the periods presented.  All of these stations operate in domestic markets.

The outdoor advertising segment
includes traditional outdoor advertising displays, such as roadside bulletins, posters and transit displays that the Company owns or operates under lease arrangements, as well as advertising displays that the Company installs in public locations,
including restaurants, health clubs, retail stores and entertainment venues.  At June 30, 2003, the outdoor advertising segment owned or operated over 5,800 outdoor billboard displays and indoor advertising display faces in more than 2,900
retail locations across the United States.  All of these displays are located in domestic markets.

The accounting policies of the
segments are the same as those described in the summary of significant accounting policies in Note 1 to the Companys audited consolidated financial statements contained in the Companys annual report on Form 10-K as filed with the SEC on
March 27, 2003.  There are no intersegment sales or transfers.

There are no customers that comprise greater than 10% of the
consolidated revenues or receivables of the Company for the periods presented.

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|                                                      |  | Three months ended June 30, |        | Six months ended June 30, |  
|----------------------------------------------------- |  | --------------------------- | ------ | ------------------------- | -
|                                                      |  |                             |        |                           |  
|                                                      |  | 2002                        |        | 2003                      |  
|                                                      |  |                             |        |                           |  
|                                                      |  |                             |       
|Net revenue:                                          |  |                             |        |                           |  
|Radio Broadcasting                                    |  | $                           | 16,817 |                           | $
|Outdoor Advertising                                   |  |                             | 6,811  |                           |  
|                                                      |  |                             |        |                           |  
|Consolidated                                          |  |                             | 23,628 |                           |  
|                                                      |  |                             |        |                           |  
|Market level expenses:                                |  |                             |        |                           |  
|Radio Broadcasting                                    |  |                             | 10,121 |                           |  
|Outdoor Advertising                                   |  |                             | 5,004  |                           |  
|                                                      |  |                             |        |                           |  
|Consolidated                                          |  |                             | 15,125 |                           |  
|Depreciation and amortization:                        |  |                             |        |                           |  
|Radio Broadcasting                                    |  |                             | 879    |                           |  
|Outdoor Advertising                                   |  |                             | 433    |                           |  
|                                                      |  |                             |        |                           |  
|Consolidated                                          |  |                             | 1,312  |                           |  
|                                                      |  |                             |        |                           |  
|Segment profit:                                       |  |                             |        |                           |  
|Radio Broadcasting                                    |  |                             | 5,817  |                           |  
|Outdoor Advertising                                   |  |                             | 1,374  |                           |  
|Corporate Expenses                                    |  |                             | 2,237  |                           |  
|                                                      |  |                             |        |                           |  
|Operating income                                      |  |                             | 4,954  |                           |  
|Interest expense, net                                 |  |                             | 5,567  |                           |  
|Other (income) expense                                |  |                             | (1,041 | )                         |  
|                                                      |  |                             |        |                           |  
|Income (loss) from continuing operations before taxes |  | $                           | 428    |                           | $
|                                                      |  |                             |        |                           |  

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|                           |  | As of December 31, |         | As of June 30, |  
|-------------------------- |  | ------------------ | ------- | -------------- | -
|                           |  | 2002               |         | 2003           |  
|                           |  |                    |         |                |  
|Total identifiable assets: |  |                    |         |                |  
|Radio Broadcasting         |  | $                  | 323,543 |                | $
|Outdoor Advertising        |  |                    | 156,352 |                |  
|                           |  |                    |         |                |  
|Consolidated               |  | $                  | 479,895 |                | $
|Goodwill, net:             |  |                    |         |                |  
|Radio Broadcasting         |  | $                  |        |                | $
|Outdoor Advertising        |  |                    | 119,259 |                |  
|                           |  |                    |         |                |  
|Consolidated               |  | $                  | 119,259 |                | $

|                               |  | Three months ended June 30, |        | Six months ended June 30, |  
|------------------------------ |  | --------------------------- | ------ | ------------------------- | -
|                               |  |                             |        |                           |  
|                               |  | 2002                        |        | 2003                      |  
|                               |  |                             |        |                           |  
|Addition to long-lived assets: |  |                             |        |                           |  
|Radio Broadcasting             |  | $                           | 1,155  |                           | $
|Outdoor Advertising            |  |                             | 13,149 |                           |  
|                               |  |                             |        |                           |  
|Consolidated                   |  | $                           | 14,304 |                           | $
|                               |  |                             |        |                           |  

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10.   Supplemental Guarantor Information

NextMedias senior subordinated
notes are guaranteed on a senior subordinated basis, jointly and severally, by all of NextMedias subsidiaries (the Guarantor Subsidiaries).  NextMedia has collateralized its revolving credit facility by granting a first
priority-perfected pledge of its assets including, without limitation, the capital stock of NextMedia and its subsidiaries.

NextMedia Operating, Inc. Supplemental Combining
Balance Sheet December 31, 2002

|                                                                 |  | NextMedia Operating, Inc. |         | Guarantor Subsidiaries |   | Eliminating Entries |   | Total |         
|---------------------------------------------------------------- |  | ------------------------- | ------- | ---------------------- | - | ------------------- | - | ----- | --------
|                                                                 |  |                           |         |                        |   |                     |   |       |         
|Assets                                                           |  |                           |         |                        |   |                     |   |       |         
|Current assets:                                                  |  |                           |         |                        |   |                     |   |       |         
|Cash and cash equivalents                                        |  | $                         | 14,951  |                        | $ | (505                | ) | $     |        
|Accounts receivable, net                                         |  |                           | 9,974   |                        |   | 4,433               |   |       |        
|Prepaid and other current assets                                 |  |                           | 426     |                        |   | 1,799               |   |       |        
|                                                                 |  |                           |         |                        |   |                     |   |       |         
|Total current assets                                             |  |                           | 25,351  |                        |   | 5,727               |   |       |        
|Property and equipment, net                                      |  |                           | 23,511  |                        |   | 29,592              |   |       |        
|Goodwill and intangibles, net                                    |  |                           | 438     |                        |   | 376,191             |   |       |        
|Other                                                            |  |                           | 13,634  |                        |   | 1,252               |   |       | (1,212  
|Assets held for sale                                             |  |                           | 486     |                        |   | 4,925               |   |       |        
|Investment in subsidiaries                                       |  |                           | 410,963 |                        |   |                    |   |       | (410,963
|                                                                 |  |                           |         |                        |   |                     |   |       |         
|Total assets                                                     |  | $                         | 474,383 |                        | $ | 417,687             |   | $     | (412,175
|                                                                 |  |                           |         |                        |   |                     |   |       |         
|Liabilities and Stockholders Equity                             |  |                           |         |                        |   |                     |   |       |         
|Current liabilities:                                             |  |                           |         |                        |   |                     |   |       |         
|Accounts payable, accrued expenses and other current liabilities |  | $                         | 14,936  |                        | $ | 5,128               |   | $     | (1,212  
|Total current liabilities                                        |  |                           | 14,936  |                        |   | 5,128               |   |       | (1,212  
|Long-term debt                                                   |  |                           | 197,276 |                        |   |                    |   |       |        
|Other long-term liabilities                                      |  |                           | 4,803   |                        |   | 1,596               |   |       |        
|                                                                 |  |                           |         |                        |   |                     |   |       |         
|Total liabilities                                                |  |                           | 217,015 |                        |   | 6,724               |   |       | (1,212  
|Stockholders equity                                             |  |                           | 257,368 |                        |   | 410,963             |   |       | (410,963
|                                                                 |  |                           |         |                        |   |                     |   |       |         
|Total liabilities and stockholders equity                       |  | $                         | 474,383 |                        | $ | 417,687             |   | $     | (412,175
|                                                                 |  |                           |         |                        |   |                     |   |       |         

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NextMedia Operating, Inc. Supplemental Combining Balance Sheet June 30, 2003

|                                           |  | NextMedia Operating, Inc. |         | Guarantor Subsidiaries |   | Eliminating Entries |   | Total |         
|------------------------------------------ |  | ------------------------- | ------- | ---------------------- | - | ------------------- | - | ----- | --------
|                                           |  |                           |         |                        |   |                     |   |       |         
|Assets                                     |  |                           |         |                        |   |                     |   |       |         
|Current assets:                            |  |                           |         |                        |   |                     |   |       |         
|Cash and cash equivalents                  |  | $                         | 11,504  |                        | $ | (404                | ) | $     |        
|Accounts receivable, net                   |  |                           | 11,900  |                        |   | 4,541               |   |       |        
|Prepaid and other current assets           |  |                           | 782     |                        |   | 2,107               |   |       |        
|                                           |  |                           |         |                        |   |                     |   |       |         
|Total current assets                       |  |                           | 24,186  |                        |   | 6,244               |   |       |        
|Property and equipment, net                |  |                           | 26,315  |                        |   | 31,639              |   |       |        
|Goodwill and intangibles, net              |  |                           | 31,852  |                        |   | 407,396             |   |       |        
|Other                                      |  |                           | 10,772  |                        |   | 963                 |   |       | 962     
|Investment in subsidiaries                 |  |                           | 441,412 |                        |   |                    |   |       | (441,412
|                                           |  |                           |         |                        |   |                     |   |       |         
|Total assets                               |  | $                         | 534,537 |                        | $ | 446,242             |   | $     | (440,450
|Liabilities and Stockholders Equity       |  |                           |         |                        |   |                     |   |       |         
|Current liabilities                        |  | $                         | 13,444  |                        | $ | 3,235               |   | $     | 962     
|Long-term debt                             |  |                           | 233,974 |                        |   |                    |   |       |        
|Other long-term liabilities                |  |                           | 10,754  |                        |   | 1,595               |   |       |        
|                                           |  |                           |         |                        |   |                     |   |       |         
|Total liabilities                          |  |                           | 258,172 |                        |   | 4,830               |   |       |        
|Stockholders equity                       |  |                           | 276,365 |                        |   | 441,412             |   |       | (441,412
|                                           |  |                           |         |                        |   |                     |   |       |         
|Total liabilities and stockholders equity |  | $                         | 534,537 |                        | $ | 446,242             |   | $     | (440,450
|                                           |  |                           |         |                        |   |                     |   |       |         

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NextMedia Operating, Inc. Supplemental Combining Statement of Operations For the Three Months Ended June 30, 2002

|                                                |  | NextMedia Operating, Inc. |        | Guarantor Subsidiaries |   | Eliminating Entries |   | Total |       
|----------------------------------------------- |  | ------------------------- | ------ | ---------------------- | - | ------------------- | - | ----- | ------
|                                                |  |                           |        |                        |   |                     |   |       |       
|Net revenue                                     |  | $                         | 16,817 |                        | $ | 6,811               |   | $     |      
|Total operating expenses                        |  |                           | 10,121 |                        |   | 5,004               |   |       |      
|Corporate expenses                              |  |                           | 1,465  |                        |   | 772                 |   |       |      
|Depreciation and amortization                   |  |                           | 879    |                        |   | 433                 |   |       |      
|                                                |  |                           |        |                        |   |                     |   |       |       
|Operating income (loss)                         |  | $                         | 4,352  |                        | $ | 602                 |   | $     |      
|Interest expense, net                           |  |                           | 5,567  |                        |   |                    |   |       |      
|Other (income) expense                          |  |                           | (1,043 | )                      |   | 2                   |   |       |      
|Equity in loss of subsidiaries                  |  |                           | 2,671  |                        |   |                    |   |       | (2,671
|                                                |  |                           |        |                        |   |                     |   |       |       
|Income (loss) before provision for income taxes |  |                           | (2,843 | )                      |   | 600                 |   |       | 2,671 
|Provision for income taxes                      |  |                           | 2,329  |                        |   |                    |   |       |      
|                                                |  |                           |        |                        |   |                     |   |       |       
|Net income (loss) from continuing operations    |  | $                         | (5,172 | )                      | $ | 600                 |   | $     | 2,671 
|Loss on discontinued operations                 |  |                           | 46     |                        |   | 3,271               |   |       |      
|                                                |  |                           |        |                        |   |                     |   |       |       
|Net loss after taxes                            |  | $                         | (5,218 | )                      | $ | (2,671              | ) | $     | 2,671 

NextMedia Operating, Inc. Supplemental Combining Statement of Operations For
the Three Months Ended June 30, 2003

|                                                |  | NextMedia Operating, Inc. |        | Guarantor Subsidiaries |   | Eliminating Entries |  | Total |       
|----------------------------------------------- |  | ------------------------- | ------ | ---------------------- | - | ------------------- |  | ----- | ------
|                                                |  |                           |        |                        |   |                     |  |       |       
|Net revenue                                     |  | $                         | 19,472 |                        | $ | 8,223               |  | $     |      
|Operating expenses                              |  |                           | 11,515 |                        |   | 5,093               |  |       |      
|Corporate expenses                              |  |                           | 1,885  |                        |   | 558                 |  |       |      
|Depreciation and amortization                   |  |                           | 1,422  |                        |   | 1,266               |  |       |      
|                                                |  |                           |        |                        |   |                     |  |       |       
|Operating income (loss)                         |  |                           | 4,650  |                        |   | 1,306               |  |       |      
|Interest expense, net                           |  |                           | 5,756  |                        |   |                    |  |       |      
|                                                |  |                           |        |                        |   |                     |  |       |       
|Other (income) expense                          |  |                           | 121    |                        |   | 10                  |  |       |      
|Equity in earnings of subsidiaries              |  |                           | (1,296 | )                      |   |                    |  |       | 1,296 
|                                                |  |                           |        |                        |   |                     |  |       |       
|Income (loss) before provision for income taxes |  |                           | 69     |                        |   | 1,296               |  |       | (1,296
|Provision for income taxes                      |  |                           | 3,054  |                        |   |                    |  |       |      
|                                                |  |                           |        |                        |   |                     |  |       |       
|Net income (loss) from continuing operations    |  |                           | (2,985 | )                      |   | 1,296               |  |       | (1,296
|Income from discontinued operations             |  |                           |       |                        |   |                    |  |       |      
|                                                |  |                           |        |                        |   |                     |  |       |       
|Net income (loss)                               |  | $                         | (2,985 | )                      | $ | 1,296               |  | $     | (1,296
|                                                |  |                           |        |                        |   |                     |  |       |       

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NextMedia Operating, Inc. Supplemental Combining Statement of Operations For the Six Months Ended June 30, 2002

|                                                |  | NextMedia Operating, Inc. |         | Guarantor Subsidiaries |   | Eliminating Entries |   | Total |       
|----------------------------------------------- |  | ------------------------- | ------- | ---------------------- | - | ------------------- | - | ----- | ------
|                                                |  |                           |         |                        |   |                     |   |       |       
|Net revenue                                     |  | $                         | 30,103  |                        | $ | 12,343              |   | $     |      
|Total operating expenses                        |  |                           | 19,073  |                        |   | 9,245               |   |       |      
|Corporate expenses                              |  |                           | 2,834   |                        |   | 1,494               |   |       |      
|Depreciation and amortization                   |  |                           | 1,742   |                        |   | 811                 |   |       |      
|                                                |  |                           |         |                        |   |                     |   |       |       
|Operating income (loss)                         |  | $                         | 6,454   |                        | $ | 793                 |   | $     |      
|Interest income expense, net                    |  |                           | 11,152  |                        |   | (3                  | ) |       |      
|Other (income) loss                             |  |                           | (75     | )                      |   | 2                   |   |       |      
|Equity in loss of subsidiaries                  |  |                           | 2,478   |                        |   |                    |   |       | (2,478
|                                                |  |                           |         |                        |   |                     |   |       |       
|Income (loss) before provision for income taxes |  |                           | (7,101  | )                      |   | 794                 |   |       | 2,478 
|Provision for income taxes                      |  |                           | 17,869  |                        |   |                    |   |       |      
|                                                |  |                           |         |                        |   |                     |   |       |       
|Net income (loss) from continuing operations    |  | $                         | (24,970 | )                      | $ | 794                 |   | $     | 2,478 
|Loss on discontinued operations                 |  |                           | 201     |                        |   | 3,272               |   |       |      
|                                                |  |                           |         |                        |   |                     |   |       |       
|Net income (loss) after taxes                   |  | $                         | (25,171 | )                      | $ | (2,478              | ) | $     | 2,478 

NextMedia Operating, Inc. Supplemental Combining Statement of Operations For the Six
Months Ended June 30, 2003

|                                                |  | NextMedia Operating, Inc. |        | Guarantor Subsidiaries |   | Eliminating Entries |  | Total |       
|----------------------------------------------- |  | ------------------------- | ------ | ---------------------- | - | ------------------- |  | ----- | ------
|                                                |  |                           |        |                        |   |                     |  |       |       
|Net revenue                                     |  | $                         | 35,377 |                        | $ | 15,874              |  | $     |      
|Total operating expenses                        |  |                           | 21,738 |                        |   | 10,205              |  |       |      
|Corporate expenses                              |  |                           | 3,345  |                        |   | 1,036               |  |       |      
|Depreciation and amortization                   |  |                           | 2,970  |                        |   | 2,067               |  |       |      
|                                                |  |                           |        |                        |   |                     |  |       |       
|Operating income (loss)                         |  | $                         | 7,324  |                        | $ | 2,566               |  | $     |      
|Interest expense, net                           |  |                           | 11,481 |                        |   |                    |  |       |      
|Other income                                    |  |                           | 601    |                        |   | 18                  |  |       |      
|Equity in earnings of subsidiaries              |  |                           | (2,548 | )                      |   |                    |  |       | 2,548 
|                                                |  |                           |        |                        |   |                     |  |       |       
|Income (loss) before provision for income taxes |  |                           | (2,210 | )                      |   | 2,548               |  |       | (2,548
|Provision for income taxes                      |  |                           | 5,935  |                        |   |                    |  |       |      
|Net income (loss) from continuing operations    |  | $                         | (8,145 | )                      | $ | 2,548               |  | $     | (2,548
|(Income) Loss on discontinued operations        |  |                           | (1     | )                      |   |                    |  |       |      
|                                                |  |                           |        |                        |   |                     |  |       |       
|Net income (loss) after taxes                   |  | $                         | (8,144 | )                      | $ | 2,548               |  | $     | (2,548

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NextMedia Operating, Inc. Supplemental Combining Statement of Cash Flows For the Six Months Ended June 30, 2002

|                                                |  | NextMedia Operating, Inc. |         | Guarantor Subsidiaries |   | Eliminating Entries |   | Total |  
|----------------------------------------------- |  | ------------------------- | ------- | ---------------------- | - | ------------------- | - | ----- | -
|                                                |  |                           |         |                        |   |                     |   |       |  
|Net Cash provided by (used in) operations       |  | $                         | (5,390  | )                      | $ | 1,752               |   | $     | 
|                                                |  |                           |         |                        |   |                     |   |       |  
|Cash Flows From Investing Activities            |  |                           |         |                        |   |                     |   |       |  
|Purchase of fixed assets                        |  |                           | (1,086  | )                      |   | (2,059              | ) |       | 
|Payments for acquisitions, net of cash acquired |  |                           | (7,554  | )                      |   |                    |   |       | 
|Proceeds from sale of assets                    |  |                           | 1,213   |                        |   |                    |   |       | 
|Purchase of short term investments              |  |                           | (9,478  | )                      |   |                    |   |       | 
|                                                |  |                           |         |                        |   |                     |   |       |  
|Net cash used in investing activities           |  |                           | (16,905 | )                      |   | (2,059              | ) |       | 
|                                                |  |                           |         |                        |   |                     |   |       |  
|Cash Flows From Financing Activities            |  |                           |         |                        |   |                     |   |       |  
|Capital contributions from Parent               |  |                           | 185     |                        |   |                    |   |       | 
|Payments of financing related costs             |  |                           | (463    | )                      |   |                    |   |       | 
|Other                                           |  |                           | (75     | )                      |   | 120                 |   |       | 
|                                                |  |                           |         |                        |   |                     |   |       |  
|Net cash used in financing activities           |  |                           | (353    | )                      |   | 120                 |   |       | 
|                                                |  |                           |         |                        |   |                     |   |       |  
|Net decrease in cash                            |  |                           | (22,648 | )                      |   | (187                | ) |       | 
|Cash at beginning of period                     |  |                           | 31,044  |                        |   | (543                | ) |       | 
|                                                |  |                           |         |                        |   |                     |   |       |  
|Cash at end of period                           |  | $                         | 8,396   |                        | $ | (730                | ) | $     | 
|                                                |  |                           |         |                        |   |                     |   |       |  

NextMedia Operating, Inc. Supplemental Combining Statement of Cash Flows For the
Six Months Ended June 30, 2003

|                                                |  | NextMedia Operating, Inc. |         | Guarantor Subsidiaries |   | Eliminating Entries |   | Total |  
|----------------------------------------------- |  | ------------------------- | ------- | ---------------------- | - | ------------------- | - | ----- | -
|                                                |  |                           |         |                        |   |                     |   |       |  
|Net cash provided by (used in) operations       |  | $                         | (2,438  | )                      | $ | 2,102               |   | $     | 
|                                                |  |                           |         |                        |   |                     |   |       |  
|Cash Flows From Investing Activities            |  |                           |         |                        |   |                     |   |       |  
|Purchase of fixed assets                        |  |                           | (962    | )                      |   | (2,001              | ) |       | 
|Payments for acquisitions, net of cash acquired |  |                           | (68,767 | )                      |   |                    |   |       | 
|Deferred sellings costs                         |  |                           | (239    | )                      |   |                    |   |       | 
|Proceeds from sale of assets                    |  |                           | 5,463   |                        |   |                    |   |       | 
|                                                |  |                           |         |                        |   |                     |   |       |  
|Net cash used in investing activities           |  |                           | (64,505 | )                      |   | (2,001              | ) |       | 
|                                                |  |                           |         |                        |   |                     |   |       |  
|Cash Flows From Financing Activities            |  |                           |         |                        |   |                     |   |       | 
|Proceeds from revolving credit facilities       |  |                           | 44,000  |                        |   |                    |   |       | 
|Repayment of revolving credit facilities        |  |                           | (7,500  | )                      |   |                    |   |       | 
|Capital contributions from Parent               |  |                           | 27,100  |                        |   |                    |   |       | 
|Payments of financing related costs             |  |                           | (32     | )                      |   |                    |   |       | 
|Other                                           |  |                           | (72     | )                      |   |                    |   |       | 
|                                                |  |                           |         |                        |   |                     |   |       |  
|Net cash provided by financing activities       |  |                           | 63,496  |                        |   |                    |   |       | 
|                                                |  |                           |         |                        |   |                     |   |       |  
|Net decrease in cash                            |  |                           | (3,447  | )                      |   | 101                 |   |       | 
|Cash at beginning of period                     |  |                           | 14,951  |                        |   | (505                | ) |       | 
|                                                |  |                           |         |                        |   |                     |   |       |  
|Cash at end of period                           |  | $                         | 11,504  |                        | $ | (404                | ) | $     | 
|                                                |  |                           |         |                        |   |                     |   |       |  

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##### Table of Contents

ITEM 2.     MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                   OPERATIONS

Overview

Our business consists of two out-of-home media divisions:  radio broadcasting and outdoor advertising.  Our radio broadcasting business consists of radio
stations for which we provide programming and sell on-air advertising time.  Our outdoor advertising business includes traditional outdoor advertising displays, such as bulletins and posters, as well as alternative advertising displays that we
install in public locations, including restaurants, health clubs, retail stores and entertainment venues.

Radio Broadcasting Division

We derive our radio broadcast revenues primarily from the sale of advertising time to local and national advertisers.  Our radio division operating expenses
consist primarily of employee salaries and commissions, programming expenses, advertising and promotional expenses, rental for studio premises, rental of transmission tower space and music license royalty fees.  We seek to control these
expenses by centralizing certain functions, such as finance, accounting, legal, human resources and management information systems and the overall programming management function and by requiring adherence to strict cost controls at the station
level.

Our radio advertising revenues generally reflect the advertising rates that our radio stations can charge and the number of
advertisements that we can broadcast without jeopardizing listener levels and resulting ratings.  We typically base our advertising rates upon demand for a stations advertising inventory and its ability to attract audiences in targeted
demographic groups, as well as upon the number of stations competing in the market.

Most of our markets are mid-sized or suburban
markets, which typically attract a larger percentage of advertising revenues from local, rather than national, advertising.

The radio
broadcast industry typically experiences seasonal revenue fluctuations due primarily to fluctuations in advertising expenditures by local and national advertisers, with revenues typically being the lowest in the first calendar quarter of each
year.  A radio stations operating results in any period also may be affected by advertising and promotional expenditures that do not necessarily produce revenues in the period in which the expenditures are made.

Outdoor Advertising Division

We derive our outdoor advertising revenues primarily through
contracts with local and national advertisers.  Our outdoor division operating expenses consist primarily of employee salaries and commissions, rental of sites for advertising displays, costs for installation of advertising frames, maintenance
and shipping costs, printing of advertisements and production costs.

Our outdoor advertising revenues reflect advertising rates
prevailing in the relevant market, the location of our displays and our available inventory.  We generally base our advertising rates on a particular displays exposure, or number of impressions delivered, relative to the
demographics of the particular market and its location within that market.  Our outdoor advertising display contracts typically have terms ranging from one month to one year.

We estimate the number of impressions delivered by an outdoor display, for example, by estimating the number of individuals viewing the site during a defined
period.  We apply a similar formula for determining advertising rates for our other display products.  Because roadside bulletin displays are large and generate a higher number of impressions than other outdoor products, advertising rates
for bulletins are significantly higher than those for our other outdoor and alternative display products.

Factors Affecting Comparability

We commenced operations in late-1999 when our predecessor by merger completed its first acquisition.  Our results of operations from period to period are not
comparable because of the impact of the various acquisitions and dispositions that we have completed, as well as our rapid build-up in personnel in anticipation of additional acquisitions.  Moreover, our expected growth through acquisitions is
likely to continue to limit the comparability of our results of operations.

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##### Table of Contents

Results of Operations

The following table presents
certain summary historical financial data in dollars (in thousands) and as a percentage of net revenues for the periods indicated on a consolidated basis and for each of our out-of-home media divisions.

|                                       |  | Three Months Ended June 30, |        | Six Months Ended June 30, | 
|-------------------------------------- |  | --------------------------- | ------ | ------------------------- | 
|                                       |  |                             |        |                           | 
|                                       |  | 2002                        |        | %                         | 
|                                       |  |                             |        |                           | 
|Consolidated Operating Data:           |  |                             |        |                           | 
|Net revenues                           |  | $                           | 23,628 |                           | 
|Market level expenses                  |  |                             | 15,125 |                           | 
|Corporate expenses                     |  |                             | 2,237  |                           | 
|Depreciation and amortization          |  |                             | 1,312  |                           | 
|                                       |  |                             |        |                           | 
|Operating income (loss)                |  |                             | 4,954  |                           | 
|Interest expense, net                  |  |                             | 5,567  |                           | 
|Other (income) expense, net            |  |                             | (1,041 | )                         | 
|Provision for income taxes             |  |                             | 2,329  |                           | 
|(Gain) loss on discontinued operations |  |                             | 3,317  |                           | 
|                                       |  |                             |        |                           | 
|Net loss                               |  | $                           | (5,218 | )                         | 
|                                       |  |                             |        |                           | 
|Radio Broadcasting Operating Data:     |  |                             |        |                           | 
|Net revenues                           |  | $                           | 16,817 |                           | 
|Market level expenses                  |  |                             | 10,121 |                           | 
|Depreciation and amortization          |  |                             | 879    |                           | 
|                                       |  |                             |        |                           | 
|Segment operating income               |  | $                           | 5,817  |                           | 
|                                       |  |                             |        |                           | 
|Outdoor Advertising Operating Data:    |  |                             |        |                           | 
|Net revenues                           |  | $                           | 6,811  |                           | 
|Market level expenses                  |  |                             | 5,004  |                           | 
|Depreciation and amortization          |  |                             | 433    |                           | 
|                                       |  |                             |        |                           | 
|Segment operating income               |  | $                           | 1,374  |                           | 
|                                       |  |                             |        |                           | 

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Comparison of Three Months Ended June 30, 2003 to Three Months Ended June 30, 2002

Net Revenues.Consolidated net revenues increased $4.1 million to $27.7 million in 2003 from $23.6 million in 2002.  Radio net revenues increased
$2.7 million to $19.5 million in 2003 from $16.8 million in 2002.  Outdoor advertising net revenues increased $1.4 million to $8.2 million in 2003 from $6.8 million in 2002.  Because of a relatively soft advertising environment, revenues
generated by assets owned and operated in both periods was approximately flat and the increase was due primarily to our completion of acquisitions in 2002 and 2003.  While this trends appears to be continuing into the third quarter of 2003,
management does not have significant visibility beyond that period due to the rapidly changing nature of the advertising environment.  However, due to completed acquisitions, management expects revenue in the third and fourth quarters of 2003
to exceed revenue of the third and fourth quarters of 2002.

Market Level Expenses.Consolidated market level expenses
increased $1.5 million to $16.6 million in 2003 from $15.1 million in 2002.  Radio market level expenses increased $1.4 million to $11.5 million in 2003 from $10.1 million in 2002.  Outdoor advertising market level expenses increased
$89,000 to $5.1 million in 2003 from $5.0 million in 2002.  These increases were attributable primarily to our completion of acquisitions in 2002 and 2003.  As a percentage of net revenues, consolidated market level expenses decreased from
64.0% to 60.0% since fixed costs did not increase at the same rate as revenues.

Corporate Expenses.  Corporate expenses
increased $206,000 to $2.4 million in 2003 from $2.2 million in 2002.  This increase was due primarily to severance costs of approximately $400,000 associated with the reduction of corporate staff offset by a reduction in personal costs during
the three months ended June 30, 2003.  As a percentage of net revenues, corporate expenses declined from 9.5% to 8.8% because the growth in revenue did not require a proportional increase in corporate costs.

Depreciation and Amortization.Consolidated depreciation and amortization increased $1.4 million to $2.7 million in 2003 from $1.3 million in 2002. 
Radio depreciation and amortization increased $543,000 to $1.4 million in 2003 from $879,000 in 2002.  Outdoor advertising depreciation and amortization increased $833,000 to $1.3 million in 2003 from $433,000 in 2002.  The increases in
radio and outdoor depreciation and amortization were attributable to acquisitions during 2002 and 2003 which resulted in the addition of depreciable fixed assets and definite lived intangibles which are amortized over their useful lives.

Interest and Other Income (Expense) Net.Interest expense, net, increased to $5.8 million in 2003 from $5.6 million in 2002 due to
indebtedness incurred in connection with our acquisitions.  Other income (expense), net decreased to a $131,000 expense in 2003 primarily as a result of a non-cash loss on our interest rate swap arrangements during the 2003 period.

Income Tax.  We record deferred tax expense throughout the year to establish a valuation allowance against net operating loss
carry-forwards generated by amortization of goodwill and broadcast licenses that are deductible for tax purposes, but are no longer amortized for book purposes.  We record this valuation allowance as we continue to expect that our deferred tax
liabilities will not reverse within our net operating loss carry-forward period.  The Company does not have any current income taxes.

Discontinued Operations.  In the second quarter of 2002, we entered into an agreement to sell the assets of radio stations, WYOO-FM, WPCF-AM, WQJM-FM,
WILN-FM and WYYX-FM in Panama City, Florida in exchange for approximately $5.5 million.  This sale was completed in January 2003.  Accordingly, the results of operations of these stations have been classified as discontinued operations in
all periods prior to the consummation of the sale.  The discontinued operations include a loss on disposition of approximately $3.2 million during the three months ended June 30, 2002.

Net Loss.  Consolidated net loss decreased $2.2 million to $3.0 million in 2003 from $5.2 million in 2002 as a result of the factors described
above.

Comparison of Six Months Ended June 30, 2003 to Six Months Ended June 30, 2002

Net Revenues.Consolidated net revenues increased $8.9 million to $51.3 million in 2003 from $42.4 million in 2002.  Radio net revenues increased
$5.3 million to $35.4 million in 2003 from $30.1 million in 2002.  Outdoor advertising net revenues increased $3.6 million to $15.9 million in 2003 from $12.3 million in 2002.  Revenues generated by assets owned and operated in both
periods contributed approximately $1.7 million of the increase, while the remainder of the increase was due primarily to our completion of acquisitions in 2002 and 2003.

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Market Level Expenses.Consolidated market level expenses increased $3.6 million to $31.9 million in
2003 from $28.3 million in 2002.  Radio market level expenses increased $2.6 million to $21.7 million in 2003 from $19.1 million in 2002.  Outdoor advertising market level expenses increased $1.0 to $10.2 million in 2003 from $9.2 million
in 2002.  These increases were attributable primarily to our completion of acquisitions in 2002 and 2003.  As a percentage of net revenues, consolidated market level expenses decreased from 66.7% to 62.3% since fixed costs did not increase
at the same rate as revenues.

Corporate Expenses.  Corporate expenses increased $53,000 to $4.4 million in 2003 from $4.3
million in 2002.  This increase was due primarily to severance costs of approximately $400,000 associated with the reduction of corporate staff offset by a reduction in personal costs during the six months ended June 30, 2003.  As a
percentage of net revenues, corporate expenses declined from 10.2% to 8.5% because the growth in revenue did not require a proportional increase in corporate costs.

Depreciation and Amortization.Consolidated depreciation and amortization increased $2.4 million to $5.0 million in 2003 from $2.6 million in 2002. 
Radio depreciation and amortization increased $1.3 million to $3.0 million in 2003 from $1.7 million in 2002.  Outdoor advertising depreciation and amortization increased $1.3 million to $2.1 million in 2003 from $811,000 in 2002.  The
increases in radio and outdoor depreciation and amortization were attributable to acquisitions during 2002 and 2003 which resulted in the addition of depreciable fixed assets and definite lived intangibles which are amortized over their useful
lives.

Interest and Other Income (Expense) Net.Interest expense, net, increased to $11.5 million in 2003 from $11.1
million in 2002 due to indebtedness incurred in connection with our acquisitions.  Other income (expense), net decreased to a $619,000 expense in 2003 primarily as a result of a non-cash loss on our interest rate swap arrangements during the
2003 period.

Income Tax.  In connection with the adoption of SFAS 142 and suspension of amortization of FCC licenses and
goodwill, we determined that our deferred tax liabilities will not reverse within our net operating loss carry-forward period.  Accordingly, on January 1, 2002, we recorded a one time non-cash charge of $11,600 to deferred tax expense to
establish an additional valuation allowance against our deferred tax assets.  We recorded additional deferred tax expense throughout 2002 to establish a valuation allowance against net operating loss carry-forwards generated by amortization of
goodwill and broadcast licenses that is deductible for tax purposes, but is no longer amortized for book purposes.

In the current year,
we continue to record deferred tax expense to establish a valuation allowance for deferred tax assets created as we continue to expect that our deferred tax liabilities will not reverse within our net operating loss carry-forward period.  The
Company does not have any current income taxes.

Discontinued Operations.  In the second quarter of 2002, we entered into an
agreement to sell the assets of radio stations, WYOO-FM, WPCF-AM, WQJM-FM, WILN-FM and WYYX-FM in Panama City, Florida in exchange for approximately $5.5 million.  This sale was completed in January 2003.  Accordingly, the results of
operations of these stations have been classified as discontinued operations in all periods prior to the consummation of the sale.  The discontinued operations include a loss on disposition of approximately $3.2 million during the six months
ended June 30, 2002.

Net Loss.  Consolidated net loss decreased $17.1 million to $8.1 million in 2003 from $25.2 million in
2002 as a result of the factors described above.

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Liquidity and Capital Resources

Our cash and cash
equivalents balance at June 30, 2003 was approximately $11.1 compared to $14.4 million at December 31, 2002.  The Company maintains these cash balances at the end of the second and fourth quarter of its fiscal year in preparation for making
semi-annual interest payments (due July 1 and January 1) of approximately $10.8 million on its 103⁄4% senior subordinated notes.

Net
cash used in operating activities was $336,000 and $3.6 million for the six months ended June 30, 2003 and 2002, respectively.  The decrease in our net cash used in operating activities was due primarily to the additional operating income
resulting from acquisitions completed during 2002 and 2003.

Net cash provided by financing activities was $63.5 million for the six
months ended June 30, 2003 compared to cash used in financing activities of $233,000 for the six months ended June 30, 2002.  During the six months ended June 30, 2002, there were no significant acquisitions; consequently, there was no
significant financing activity.  Net cash used in investing activities was $66.5 million and $19.0 million for the six months ended June 30, 2003 and 2002, respectively.  These cash flows primarily reflect expenditures for acquisitions and
capital expenditures.

Sources and Uses of Funds

We use a significant
portion of our capital resources to consummate acquisitions.  Through June 30, 2003, we funded our acquisitions from the following sources:  equity contributions of approximately $354.1 million from our indirect parent, NextMedia
Investors, which in turn were funded by equity investments from several private investment funds and our senior management, and net borrowings of approximately $234.0 million.  We expect to obtain financing for future acquisitions through the
incurrence of debt, additional equity contributions, internally generated funds or a combination of the foregoing.  There can be no assurance, however, that external financing will be available to us on terms we consider favorable or that cash
flow from operations will be sufficient to fund our ongoing liquidity requirements.

In July 2001, GS Capital Partners 2000, L.P. and
related funds committed to contribute $75.0 million to NextMedia Investors in exchange for Class A membership interests in NextMedia Investors.  In January 2003, we received the final $27.1 million of the original commitment.

On July 31, 2000, we entered into a $125.0 million revolving senior credit facility.  Amounts available under the senior credit facility
begin decreasing quarterly, commencing in October 2003.  The senior credit facility bears interest at floating rates and matures on July 31, 2007.  In connection with the offering of our 10.75% Senior Subordinated Notes due 2011,
the total loan commitments under the senior credit facility were reduced to $100.0 million.  Pursuant to the sixth amendment to the senior credit facility, the total loan commitments under the senior credit facility were reduced to $75.0
million, the interest rates payable thereunder were adjusted to provide for an increased interest rate based on the aggregate principal amount of debt outstanding from time to time under the facility, and certain financial covenants related to
senior leverage, total leverage and interest coverage were relaxed.  Amounts available for borrowing under the senior credit facility are determined based on certain leverage requirements.

The credit facility amendments discussed above became effective on January 6, 2003 in connection with our acquisition of four FM radio stations and one AM radio
station operating in the Saginaw/Bay City/Midland, Michigan market from Wilks Broadcasting, LLC for $55.5 million.  We financed $26.0 million of the purchase price with borrowings under the senior credit facility, and funded the balance with
the remainder of the previously committed equity contributions and cash on hand.

On January 31, 2003, we acquired three additional FM
stations and one additional AM station as an add-on to our existing stations in the Sherman/Dennison, Texas and Ardmore, Oklahoma market for $5.5 million.  Simultaneously, we disposed of five radio stations in the Panama City, Florida market
for approximately $5.5 million.

In February 2003, we acquired certain outdoor advertising assets in New Jersey for approximately
$4.7 million, $600,000 of which we funded in 2002 and the balance of which we funded at the time of acquisition with additional borrowings under the senior credit facility and cash on hand.

Our senior credit facility contains customary restrictive covenants that, among other things, limit our ability to incur additional indebtedness and liens in
connection therewith, pay dividends and make capital expenditures above specified limits.  Under the senior credit facility, we must satisfy specified financial covenants, such as a maximum total leverage ratio, a maximum senior leverage ratio
and a minimum ratio of consolidated EBITDA to consolidated net cash interest expense.  If

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future financial results are not sufficient to meet the requirements of the Companys financial covenants, the lenders could accelerate the payment of any outstanding
principal and interest amounts.  Should this occur, the Company would attempt to obtain a waiver of the covenant violation from the lenders or seek an alternate source of financing.  However, there can be no assurance that the Company
would be able to obtain a waiver or an alternate source of financing. As of June 30, 2003, we were in compliance with all of these covenants.  After taking into account these restrictive covenants, as of June 30, 2003, we had approximately
$12.5 million of borrowing capacity under our senior credit facility.

In April 2003, we entered into agreements to sell the assets of
WAIT-AM in our Chicago suburban market to Newsweb Corporation for $8,250 and acquire the assets of KNHK-FM in Reno, Nevada from Citadel Broadcasting Company for $4,250.  Subsequent to the purchase of KNHK-FM, in order to comply with the
FCCs station ownership regulation, we will be required to divest of a station in the Reno market.  Consequently, in July 2003, we entered into an agreement to sell the assets of KSRN-FM in Reno, Nevada to Lazer Broadcasting Corp. for $2.5
million in cash.  In May 2003, we entered into an agreement to sell certain of the assets of WJTW-FM in our Chicago suburban market to Hispanic Broadcasting Corporation for $21,000 in cash.  We expect each of the foregoing transactions to
close as soon as practicable after the FCC terminates its hold on license transfer applications and begins to review and approve the applications.

Capital expenditures in the six months ended June 30, 2003 decreased slightly to $3.0 million from $3.1 million for the six months ended June 30, 2002.  The
following table sets forth our capital expenditures for the six months ended June 30, 2003.  Recurring capital expenditures are related to the maintenance of our existing broadcast facilities and outdoor structures.  Non-recurring capital
expenditures are related primarily to radio signal upgrades and facility consolidations.  Revenue producing capital expenditures are related to the construction of new outdoor structures which management believes will generate future
revenue.

|                           |  | Six Months Ended June 30, 2003 |      
|-------------------------- |  | ------------------------------ | -----
|                           |  |                                |      
|                           |  | (in thousands)                 |      
|Recurring                  |  | $                              | 1,159
|Non-recurring              |  |                                | 183  
|Revenue producing          |  |                                | 1,621
|                           |  |                                |      
|Total capital expenditures |  | $                              | 2,963
|                           |  |                                |      

Our 10.75% senior subordinated notes due 2011
require us to make semi-annual interest payments of approximately $10.8 million on January 1 and July 1 of each year.  The indenture governing the notes contains certain restrictive covenants that, among other things, limit our
ability to incur additional indebtedness and pay dividends.  As of June 30, 2003, we were in compliance with these covenants.

We
believe that cash from operations, together with available borrowings under our senior credit facility and proceeds from the pending asset sales discussed above, will be sufficient to permit us to meet our financial obligations and to fund our
existing operations for the foreseeable future.

Standard & Poors Ratings Services has maintained our B+ corporate credit rating
on credit watch with negative implications.  If we were downgraded by Standard & Poors, our ability to raise capital on acceptable terms, or at all could be impaired.

Recent Accounting Pronouncements

In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities, which is effective immediately for all enterprises with interest in variable interest entities created after January 31, 2003.  FIN 46 must be applied to interests in
variable interest entities created before February 1, 2003 beginning in the first interim period beginning after June 15, 2003.  We do not have any interest in any variable interest entities as of January 31, 2003.  We will apply the
provisions of FIN 46 in future periods should a variable interest entity be acquired.

In November 2002, the Emerging Issues Task Force
reached a consensus on Issue No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF No. 00-21). This issue addresses how revenue arrangements with multiple deliverables should be divided into separate units of
accounting and how the arrangement consideration should be allocated to the identified separate accounting units. EITF No. 00-21 is effective for fiscal periods beginning after June 15, 2003. Where multiple elements exist in an arrangement, the
arrangement fee is allocated to the different elements based upon

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verifiable objective evidence of the fair value of the elements.  We do not expect that the adoption of EITF No. 00-21 will have a material impact on our financial
statements.

In May 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities. SFAS 149 provides for certain changes in the accounting treatment of derivative contracts. SFAS 149 is effective for contracts entered into or modified after June 30, 2003, except for certain provisions that relate to SFAS No. 133
Implementation Issues that have been effective for fiscal quarters that began prior to June 15, 2003, which should continue to be applied in accordance with their respective effective dates.  The guidance should be applied prospectively.
Management anticipates that the adoption of SFAS No. 149 will not have a material impact on our financial statements.

Also in May 2003,
the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This new statement changes the accounting for certain financial instruments that, under previous guidance, issuers could
account for as equity. It requires that those instruments be classified as liabilities in the balance sheets. Most of the guidance in SFAS 150 is effective for all financial instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of our first interim period beginning after June 15, 2003. Management anticipates that the adoption of SFAS No. 150 will not have a material impact on our financial statements.

Forward-Looking Statements

Certain statements discussed in Item 2 (Managements Discussion and
Analysis of Financial Condition and Results of Operations), Item 3 (Quantitative and Qualitative Disclosures About Market Risk) and elsewhere in this Form 10-Q constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements relate to managements expectations, strategic objectives, business prospects, trends, anticipated economic performance and financial condition and other similar matters
and involve known and unknown risks, uncertainties and other important factors that could cause the actual results, trends, performance or achievements of results to differ materially from any future results, performance or achievements discussed or
implied by such forward-looking statements. These risks, uncertainties and other important factors include, among others:  general economic and business conditions, the cyclical nature of our business, the volume of advertising spending,
competition, regulatory initiatives, customer preferences and various other matters, many of which are beyond our control.   Forward-looking statements speak only as of the date of the document in which they are made, and we disclaim any
obligation to provide any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances on which the forward-looking statement is based.

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

In January 2002, we entered into two interest rate swap agreements with an aggregate notional amount of $75.0 million.  Pursuant to the swap arrangements,
we will pay interest on the notional amount at a floating rate based on LIBOR and we will receive a fixed rate of 10.75% on the notional amount until the expiration of the agreements in January 2004.  For every 0.5% increase in interest
rates, we would experience an increase of approximately $375,000 in annual interest expense and, to the extent that the three month LIBOR plus 7.3% exceeds 10.75% in the future, we would be required to pay amounts in excess of the fixed payments we
receive under the swap arrangements.  We recognize quarterly income or expense to record the swap arrangements at fair value.

Our
remaining long-term debt has a fixed interest rate.  Consequently, we do not believe we are currently exposed to any material interest rate or market risk in connection with our remaining long-term debt.

ITEM 4.     CONTROLS AND PROCEDURES

Based
on their evaluation of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), the Companys principal executive
and principal financial officers concluded that the Companys disclosure controls and procedures were effective as of June 30, 2003.

There has been no change in the Companys internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that
occurred during the Companys fiscal quarter ended June 30, 2003, that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.

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PART II

ITEM 1.     LEGAL PROCEEDINGS

We currently are not a party to any material lawsuit or
proceeding.

ITEM 2.     CHANGES IN SECURITIES

None.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.     OTHER INFORMATION

None.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K.

(a)          Exhibits

|Exhibit No. |  | Description                                                                                                                                       
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------
|            |  |                                                                                                                                                   
|31.1*       |  | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|            |  |                                                                                                                                                   
|31.2*       |  | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|            |  |                                                                                                                                                   
|32.1*       |  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|            |  |                                                                                                                                                   
|32.2*       |  | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

---

*        Filed herewith

(b)     Reports on Form 8-K

On May 14, 2003, we filed a Current Report on Form 8-K announcing earnings results for the quarter ended March 31,
2003.

On August 7, 2003, we filed a Current Report on Form 8-K announcing earnings results for the quarter ended June 30, 2003.

On August 11,
2003, we filed a Current Report on Form 8-K filing required certifications.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|                       |     | NEXTMEDIA OPERATING, INC.                                                             
|---------------------- | --- | --------------------------------------------------------------------------------------
|                       |     | (Registrant)                                                                          
|                       |     |                                                                                       
|DATE:  AUGUST 13, 2003 | By: | /s/ STEVEN DINETZ                                                                     
|                       |     |                                                                                       
|                       |     | Steven Dinetz, Chief Executive Officer and President (Principal Executive Officer)    
|                       |     |                                                                                       
|DATE:  AUGUST 13, 2003 | By: | /s/ SEAN R. STOVER                                                                    
|                       |     |                                                                                       
|                       |     | Sean R. Stover, Chief Financial Officer (Principal Financial Officer)                 
|                       |     |                                                                                       
|DATE:  AUGUST 13, 2003 | By: | /s/ SCHUYLER HANSEN                                                                   
|                       |     |                                                                                       
|                       |     | Schuyler Hansen, Chief Accounting Officer and Treasurer (Principal Accounting Officer)

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##### Table of Contents

Exhibit Index

|Exhibit No. |  | Description                                                                                                                                       
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------
|            |  |                                                                                                                                                   
|31.1        |  | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|            |  |                                                                                                                                                   
|31.2        |  | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|            |  |                                                                                                                                                   
|32.1        |  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|            |  |                                                                                                                                                   
|32.2        |  | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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