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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-K



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(Mark One)

|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2006



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission File Number 1-12187



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LOGO

(Exact name of Registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 58-1620022                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|6205 Peachtree Dunwoody Road, Atlanta, Georgia                 |  | 30328                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

Registrants telephone number, including area code: (678) 645-0000

Securities registered pursuant to Section 12(b) of the Act:



|                                                |  |                                          
|----------------------------------------------- |  | -----------------------------------------
|Title of Each Class                             |  | Name of Each Exchange on Which Registered
|Class A common stock, par value $0.33 per share |  | New York Stock Exchange                  

Securities registered pursuant to Section 12(g) of the Act: None



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Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ̈No  x

Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes ̈No  x

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 ̈

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments
to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer ̈Accelerated filer  x    Non-accelerated filer ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes ̈No  x

As of June 30, 2006, the last business day of the registrants most recently completed second fiscal quarter, the aggregate market value of the
Class A common stock held by non-affiliates (assuming that the registrants affiliates are its officers, directors and 10% or greater stockholders) was $464,270,949 based on the closing price on the New York Stock Exchange on such date.

There were 36,821,696 shares of Class A common stock outstanding as of January 31, 2007.

There were 58,733,016 shares of Class B common stock outstanding as of January 31, 2007.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the 2006 Annual Report to
Shareholders and the Proxy Statement for the 2007 Annual Meeting of Shareholders are incorporated by reference into Part II and Part III.



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##### Table of Contents

COX RADIO, INC.

2006 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS



|           |  |                                                                                                              |  |     
|---------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----
|           |  |                                                                                                              |  | Page
|           |  | PART I                                                                                                       |  |     
|Item 1.    |  | Business                                                                                                     |  | 3   
|Item 1A.   |  | Risk Factors                                                                                                 |  | 16  
|Item 1B.   |  | Unresolved Staff Comments                                                                                    |  | 19  
|Item 2.    |  | Properties                                                                                                   |  | 19  
|Item 3.    |  | Legal Proceedings                                                                                            |  | 20  
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                          |  | 21  
|           |  |                                                                                                             
|           |  | PART II                                                                                                      |  |     
|Item 5.    |  | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 21  
|Item 6.    |  | Selected Consolidated Financial Data                                                                         |  | 22  
|Item 7.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 22  
|Item 7A.   |  | Quantitative and Qualitative Disclosure About Market Risk                                                    |  | 32  
|Item 8.    |  | Financial Statements and Supplementary Data                                                                  |  | 32  
|Item 9.    |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         |  | 54  
|Item 9A.   |  | Controls and Procedures                                                                                      |  | 55  
|Item 9B.   |  | Other Information                                                                                            |  | 55  
|           |  |                                                                                                             
|           |  | PART III                                                                                                     |  |     
|Item 10.   |  | Directors and Executive Officers                                                                             |  | 55  
|Item 11.   |  | Executive Compensation                                                                                       |  | 55  
|Item 12.   |  | Security Ownership of Certain Beneficial Owners and Management                                               |  | 55  
|Item 13.   |  | Certain Relationships and Related Transactions                                                               |  | 55  
|Item 14.   |  | Principal Accountant Fees and Services                                                                       |  | 56  
|           |  |                                                                                                             
|           |  | PART IV                                                                                                      |  |     
|Item 15.   |  | Exhibits and Financial Statement Schedules                                                                   |  | 56  
|Signatures |  | 58                                                                                                          

Preliminary Notes

This annual report on Form 10-K is for the year ended December 31, 2006. This annual report modifies and supersedes documents filed prior to this annual report. The Securities and Exchange Commission (SEC) allows
us to incorporate by reference information that we file with them, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part
of this annual report. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this annual report. In this annual report, Cox Radio, we, us
and our refer to Cox Radio, Inc. and its subsidiaries.

Industry and market data used throughout this annual report is based on independent
industry and government publications, reports by market research firms and other published independent sources. Some data also is based on our good faith estimates, which are derived from our review of internal surveys and independent sources.



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##### Table of Contents

PART I



|ITEM 1. | Business
|------- | --------

We are one of the largest radio broadcasting companies in the
United States and our business constitutes one reportable segment for accounting purposes. We own, operate or provide sales and other services for 80 radio stations (67 FM and 13 AM) clustered in 18 markets. We operate three or more stations in 15
of our 18 markets and operate a wide range of programming formats in geographically diverse markets across the United States.

We are an
indirect majority-owned subsidiary of Cox Enterprises, Inc., which indirectly owns approximately 65% of our common stock and has approximately 95% of the voting power of Cox Radio. There are two classes of common stock outstanding, Class A
common stock, par value $0.33 per share, and Class B common stock, par value $0.33 per share. Cox Enterprises wholly-owned subsidiary, Cox Broadcasting, Inc., owns 100% of our outstanding Class B common stock.

Cox Enterprises, a privately-held corporation headquartered in Atlanta, Georgia, is one of the largest media companies in the United States. Our business
was operated as part of Cox Enterprises prior to our initial public offering in September 1996, at which time Cox Enterprises transferred all of its U.S. radio operations to us. As part of Cox Enterprises we were a pioneer in radio broadcasting,
building our first station in 1934, acquiring our flagship station, WSB-AM (Atlanta), in 1939, and launching our first FM station, WSB-FM (Atlanta), in 1948.

We seek to maximize the revenues and operating income of our radio stations by operating and developing clusters of stations in demographically attractive and rapidly growing markets, including Atlanta, Birmingham,
Houston, Jacksonville, Miami, Orlando, San Antonio and Tampa. Further, we believe that our experienced senior management team is well positioned to manage larger radio station clusters, as well as new radio station clusters, and take advantage of
new opportunities arising in the U.S. radio broadcasting industry.

As a result of our management, programming and sales efforts, our radio
stations are characterized by strong ratings and above average power ratios (defined as total advertising revenue share in a particular market divided by audience share in such market). Our stations are diversified in terms of format, target
audience and geographic location.

Acquisitions and Dispositions

We account for all acquisitions using the purchase method. As such, the results of operations of the acquired stations have been included in the results of operations from the date of acquisition. Specific
transactions entered into by us during the past three years, and through February 15, 2007, are summarized below.

In August 2004, we
entered into an agreement with Salem Communications to acquire KRTR-AM (formerly KHNR-AM) and KKNE-AM (formerly KHCM-AM) serving the Honolulu, Hawaii market. As part of this transaction, we exercised an option to acquire KGMZ-FM and exchanged the
assets of KGMZ-FM for the two AM stations, valued at $4.0 million. This transaction closed in January 2005, and a related loan guarantee of $6.6 million was terminated.

In January 2005, we paid $2 million for an option to purchase five radio stations for $60 million. In October 2006, the related agreement was amended to extend the period within which we could exercise our option to
purchase the stations by approximately one month, to January 31, 2008. In consideration for granting Cox Radio an exclusive three-year option, the option agreement provides the sellers a right that is exercisable at two distinct times during
the option term to provide notice requiring us to elect whether or not to purchase the stations. While these rights are called put rights under the agreement, exercise of these rights by the sellers does not obligate Cox Radio to purchase the
stations. Rather, upon receiving notice from the sellers, if we elect to not purchase the stations at that time, we must pay $5 million to the sellers. If we elect to acquire the stations at any time during the term of the agreement, the initial $2
million payment and any amounts previously paid by us to the sellers will be applied to the purchase price of the stations. During July 2006, the sellers exercised their first put right, and we paid the $5 million put refusal payment. Based on the
facts and circumstances, we determined that the sellers exercise of their second put right, which is exercisable in July 2007, was probable and therefore accrued the $5 million second put refusal payment at June 30, 2006. Currently, we
expect to exercise our right to purchase the stations prior to the expiration of the agreement in January 2008.

In September 2006, we
acquired WOKV-FM (formerly WBGB-FM), which serves the Jacksonville, Florida market, for a purchase price of approximately $7.7 million.



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##### Table of Contents

Radio Stations

The following table summarizes certain information relating to radio stations we own or operate:



|                                   |  |                                |  |                        |               |                                        |     |      |                               |     |  |                                 |     |  |    |    
|---------------------------------- |  | ------------------------------ |  | ---------------------- | ------------- | -------------------------------------- | --- | ---- | ----------------------------- | --- |  | ------------------------------- | --- |  | -- | ---
|Market (1) and StationCall Letters |  | Format                         |  | TargetDemographicGroup |               | AudienceShare inTargetDemographicGroup |     |      | Rank inTargetDemographicGroup |     |  | Demographic Group(Adults 25-54) |    
|                                   |  |                                |  |                        | AudienceShare |                                        |     | Rank |                              
|Atlanta                            |  |                                |  |                        |               |                                        |     |      |                               |     |  |                                 |     |  |    |    
|WSB-AM                             |  | News/Talk                      |  | Adults 35-54           |               | 8.7                                    |     |      | 1                             |     |  | 7.5                             |     |  | 2  |    
|WALR-FM                            |  | Urban AdultContemporary        |  | Adults 35-54           |               | 7.1                                    |     |      | 3                             |     |  | 5.8                             |     |  | 3  |    
|WSB-FM                             |  | Adult Contemporary             |  | Women 25-54            |               | 4.8                                    |     |      | 7                             |     |  | 3.6                             |     |  | 7  |    
|WBTS-FM                            |  | Rhythmic ContemporaryHit Radio |  | Women 18-34            |               | 5.5                                    |     |      | 4                             |     |  | 2.2                             |     |  | 19 |    
|WSRV-FM (formerly WFOX-FM)         |  | Classic Hits                   |  | Adults 25-54           |               | 5.5                                    |     |      | 4                             |     |  | 5.5                             |     |  | 4  |    
|                                   |  |                                |  |                        |               |                                       
|Birmingham                         |  |                                |  |                        |               |                                        |     |      |                               |     |  |                                 |     |  |    |    
|WBHJ-FM                            |  | Hip Hop                        |  | Adults 18-34           |               | 18.1                                   |     |      | 1                             |     |  | 6.9                             |     |  | 2  |    
|WBHK-FM                            |  | R&B/Soul                       |  | Adults 25-54           |               | 12.7                                   |     |      | 1                             |     |  | 12.7                            |     |  | 1  |    
|WZZK-FM                            |  | Country                        |  | Adults 25-54           |               | 5.0                                    |     |      | 9                             |     |  | 5.0                             |     |  | 9  |    
|WBPT-FM                            |  | Classic Hits                   |  | Adults 25-54           |               | 5.6                                    |     |      | 6                             |     |  | 5.6                             |     |  | 6  |    
|WAGG-AM                            |  | Gospel                         |  | Adults 25-54           |               | 1.3                                    |     |      | 18                            |     |  | 1.3                             |     |  | 18 |    
|WPSB-AM                            |  | Urban Talk                     |  | Adults 25-54           |               |                                       |     |      |                              |     |  |                                |     |  |   |    
|WNCB-FM                            |  | New Country                    |  | Adults 18-34           |               | 1.7                                    |     |      | 15                            |     |  | 1.2                             |     |  | 19 |    
|                                   |  |                                |  |                        |               |                                       
|Dayton                             |  |                                |  |                        |               |                                        |     |      |                               |     |  |                                 |     |  |    |    
|WHKO-FM                            |  | Country                        |  | Adults 25-54           |               | 9.3                                    |     |      | 3                             |     |  | 9.3                             |     |  | 3  |    
|WZLR-FM                            |  | Classic Hits                   |  | Adults 25-54           |               | 3.2                                    |     |      | 10                            |     |  | 3.2                             |     |  | 10 |    
|WHIO-AM                            |  | News/Talk                      |  | Adults 35-54           |               | 7.1                                    |     |      | 5                             |     |  | 6.2                             |     |  | 5  |    
|WHIO-FM (formerly WDPT-FM)         |  | News/Talk                      |  | Adults 35-54           |               |                                       | (2) |      |                              | (2) |  |                                | (2) |  |   | (2)
|                                   |  |                                |  |                        |               |                                       
|Greenville                         |  |                                |  |                        |               |                                        |     |      |                               |     |  |                                 |     |  |    |    
|WJMZ-FM                            |  | Urban                          |  | Adults 25-54           |               | 9.1                                    |     |      | 1                             |     |  | 9.1                             |     |  | 1  |    
|WHZT-FM                            |  | Rhythmic ContemporaryHit Radio |  | Adults 18-34           |               | 9.2                                    |     |      | 2                             |     |  | 3.7                             |     |  | 10 |    
|                                   |  |                                |  |                        |               |                                       
|Honolulu                           |  |                                |  |                        |               |                                        |     |      |                               |     |  |                                 |     |  |    |    
|KRTR-FM                            |  | Adult Contemporary             |  | Women 25-54            |               | 11.7                                   |     |      | 2                             |     |  | 9.1                             |     |  | 2  |    
|KCCN-FM                            |  | Hawaiian ContemporaryHit Radio |  | Adults 18-34           |               | 8.0                                    |     |      | 5                             |     |  | 6.7                             |     |  | 3  |    
|KPHW-FM                            |  | Rhythmic ContemporaryHit Radio |  | Women 18-34            |               | 8.0                                    |     |      | 3                             |     |  | 3.0                             |     |  | 14 |    
|KINE-FM                            |  | Hawaiian AdultContemporary     |  | Adults 25-54           |               | 5.4                                    |     |      | 5                             |     |  | 5.4                             |     |  | 5  |    
|KRTR-AM                            |  | Soft Adult Contemporary        |  | Adults 25-54           |               | 0.9                                    |     |      | 23                            |     |  | 0.9                             |     |  | 23 |    
|KKNE-AM                            |  | Traditional Hawaiian           |  | Adults 45+             |               | 1.0                                    |     |      | 22                            |     |  | 0.2                             |     |  | 31 |    
|                                   |  |                                |  |                        |               |                                       
|Houston                            |  |                                |  |                        |               |                                        |     |      |                               |     |  |                                 |     |  |    |    
|KHTC-FM (formerly KLDE-FM)         |  | Classic Hits                   |  | Adults 35-54           |               |                                       | (3) |      |                              | (3) |  |                                | (3) |  |   | (3)
|KKBQ-FM                            |  | Country                        |  | Adults 25-54           |               | 3.1                                    |     |      | 13                            |     |  | 3.1                             |     |  | 13 |    
|KTHT-FM                            |  | Country Legends                |  | Adults 35-54           |               | 1.6                                    |     |      | 23                            |     |  | 1.7                             |     |  | 23 |    
|KHPT-FM                            |  | 80s                           |  | Adults 25-44           |               | 2.8                                    |     |      | 16                            |     |  | 2.5                             |     |  | 16 |    
|                                   |  |                                |  |                        |               |                                       
|Jacksonville                       |  |                                |  |                        |               |                                        |     |      |                               |     |  |                                 |     |  |    |    
|WFYV-FM                            |  | Classic Rock                   |  | Men 25-54              |               | 6.3                                    |     |      | 6                             |     |  | 4.4                             |     |  | 9  |    
|WOKV-AM                            |  | News/Talk                      |  | Adults 35-54           |               | 9.8                                    |     |      | 1                             |     |  | 8.4                             |     |  | 3  |    
|WOKV-FM                            |  | News/Talk                      |  | Adults 35-54           |               |                                       | (4) |      |                              | (4) |  |                                | (4) |  |   | (4)
|WAPE-FM                            |  | Contemporary Hit Radio         |  | Women 18-34            |               | 10.6                                   |     |      | 2                             |     |  | 5.1                             |     |  | 8  |    
|WMXQ-FM                            |  | 80s                           |  | Adults 25-49           |               | 4.2                                    |     |      | 10                            |     |  | 3.9                             |     |  | 10 |    
|WJGL-FM                            |  | Classic Hits                   |  | Adults 35-54           |               | 7.7                                    |     |      | 3                             |     |  | 6.6                             |     |  | 4  |    
|                                   |  |                                |  |                        |               |                                       
|Long Island                        |  |                                |  |                        |               |                                        |     |      |                               |     |  |                                 |     |  |    |    
|WBLI-FM                            |  | Contemporary Hit Radio         |  | Women 18-34            |               | 11.0                                   |     |      | 2                             |     |  | 4.5                             |     |  | 3  |    
|WBAB-FM                            |  | Mainstream Rock                |  | Men 25-54              |               | 7.5                                    |     |      | 1                             |     |  | 5.4                             |     |  | 2  |    
|WHFM-FM                            |  | Mainstream Rock                |  | Men 25-54              |               |                                       | (5) |      |                              | (5) |  |                                | (5) |  |   | (5)
|                                   |  |                                |  |                        |               |                                       
|Louisville                         |  |                                |  |                        |               |                                        |     |      |                               |     |  |                                 |     |  |    |    
|WVEZ-FM                            |  | Adult Contemporary             |  | Women 25-54            |               | 8.9                                    |     |      | 2                             |     |  | 5.6                             |     |  | 5  |    
|WSFR-FM                            |  | Classic Rock                   |  | Men 25-54              |               | 5.8                                    |     |      | 5                             |     |  | 4.6                             |     |  | 8  |    
|WRKA-FM                            |  | Oldies                         |  | Adults 35-54           |               | 4.5                                    |     |      | 9                             |     |  | 3.8                             |     |  | 11 |    
|WPTI-FM                            |  | New Country                    |  | Adults 25-54           |               | 2.9                                    |     |      | 12                            |     |  | 2.9                             |     |  | 12 |    



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|                                    |  |                                 |  |                        |               |                                        |      |                               |  |                                |  |       
|----------------------------------- |  | ------------------------------- |  | ---------------------- | ------------- | -------------------------------------- | ---- | ----------------------------- |  | ------------------------------ |  | ------
|Market (1) and Station Call Letters |  | Format                          |  | TargetDemographicGroup |               | AudienceShare inTargetDemographicGroup |      | Rank inTargetDemographicGroup |  | DemographicGroup(Adults 25-54)
|                                    |  |                                 |  |                       
|                                    |  |                                 |  |                        | AudienceShare |                                        | Rank
|Miami                               |  |                                 |  |                        |               |                                        |      |                               |  |                                |  |       
|WHQT-FM                             |  | Urban Adult Contemporary        |  | Adults 25-54           |               | 8.6                                    |      | 1                             |  | 8.6                            |  | 1     
|WEDR-FM                             |  | Urban Contemporary              |  | Adults 18-34           |               | 9.7                                    |      | 1                             |  | 4.4                            |  | 6     
|WFLC-FM                             |  | Hot Adult Contemporary          |  | Women 25-54            |               | 5.6                                    |      | 4                             |  | 5.1                            |  | 4     
|WHDR-FM                             |  | Active Rock                     |  | Men 18-34              |               | 5.7                                    |      | 4                             |  | 2.1                            |  | 18    
|                                    |  |                                 |  |                        |               |                                       
|Orlando                             |  |                                 |  |                        |               |                                        |      |                               |  |                                |  |       
|WCFB-FM                             |  | Urban Adult Contemporary        |  | Adults 25-54           |               | 7.6                                    |      | 1                             |  | 7.6                            |  | 1     
|WPYO-FM                             |  | Rhythmic Contemporary Hit Radio |  | Adults 18-34           |               | 9.0                                    |      | 1                             |  | 2.9                            |  | 16    
|WDBO-AM                             |  | News/Talk                       |  | Adults 35-54           |               | 4.7                                    |      | 9                             |  | 3.9                            |  | 12    
|WHTQ-FM                             |  | Classic Rock                    |  | Men 35-54              |               | 7.2                                    |      | 2                             |  | 4.1                            |  | 11    
|WWKA-FM                             |  | Country                         |  | Adults 25-54           |               | 5.3                                    |      | 7                             |  | 5.3                            |  | 7     
|WMMO-FM                             |  | Rock Adult Contemporary         |  | Adults 25-54           |               | 6.0                                    |      | 3                             |  | 6.0                            |  | 3     
|                                    |  |                                 |  |                        |               |                                       
|Richmond                            |  |                                 |  |                        |               |                                        |      |                               |  |                                |  |       
|WKLR-FM                             |  | Classic Rock                    |  | Men 25-54              |               | 7.7                                    |      | 2                             |  | 5.3                            |  | 8     
|WKHK-FM                             |  | Country                         |  | Adults 25-54           |               | 7.2                                    |      | 3                             |  | 7.2                            |  | 3     
|WMXB-FM                             |  | Adult Contemporary              |  | Women 25-54            |               | 3.9                                    |      | 10                            |  | 3.1                            |  | 12    
|WDYL-FM                             |  | New Rock                        |  | Men 18-34              |               | 4.2                                    |      | 6                             |  | 1.4                            |  | 16    
|                                    |  |                                 |  |                        |               |                                       
|San Antonio                         |  |                                 |  |                        |               |                                        |      |                               |  |                                |  |       
|KONO-FM                             |  | Oldies                          |  | Adults 35-54           |               | 5.7                                    |      | 1                             |  | 4.5                            |  | 9     
|KONO-AM                             |  | Oldies                          |  | Adults 35-54           |               |   (6)                                 |      |   (6)                        |  |   (6)                         |  |   (6)
|KISS-FM                             |  | Active Rock                     |  | Men 18-49              |               | 10.6                                   |      | 1                             |  | 5.6                            |  | 1     
|KSMG-FM                             |  | Hot Adult Contemporary          |  | Women 25-54            |               | 5.1                                    |      | 6                             |  | 4.0                            |  | 13    
|KCYY-FM                             |  | Country                         |  | Adults 25-54           |               | 5.0                                    |      | 3                             |  | 5.0                            |  | 3     
|KPWT-FM (formerly KELZ-FM)          |  | Rhythmic Contemporary Hit Radio |  | Adults 18-34           |               |   (3)                                 |      |   (3)                        |  |   (3)                         |  |   (3)
|KKYX-AM                             |  | Classic Country                 |  | Adults 35-64           |               | 1.3                                    |      | 20                            |  | 0.8                            |  | 27    
|                                    |  |                                 |  |                        |               |                                       
|Southern Connecticut                |  |                                 |  |                        |               |                                        |      |                               |  |                                |  |       
|Bridgeport/Fairfield County         |  |                                 |  |                        |               |                                        |      |                               |  |                                |  |       
|WEZN-FM                             |  | Adult Contemporary              |  | Women 25-54            |               | 13.3                                   |      | 2                             |  | 10.5                           |  | 2     
|New Haven                           |  |                                 |  |                        |               |                                        |      |                               |  |                                |  |       
|WPLR-FM                             |  | Classic Rock                    |  | Men 25-54              |               | 14.7                                   |      | 1                             |  | 12.5                           |  | 1     
|WYBC-FM (7)                         |  | Urban Adult Contemporary        |  | Adults 25-54           |               | 7.8                                    |      | 2                             |  | 7.8                            |  | 2     
|Stamford-Norwalk                    |  |                                 |  |                        |               |                                        |      |                               |  |                                |  |       
|WCTZ-FM (formerly WKHL-FM)          |  | Adult Contemporary              |  | Adults 25-54           |               | 4.2                                    |      | 4                             |  | 4.2                            |  | 4     
|WFOX-FM (formerly WEFX-FM)          |  | Classic Rock                    |  | Adults 25-54           |               |   (3)                                 |      |   (3)                        |  |   (3)                         |  |   (3)
|WSTC-AM                             |  | News/Talk                       |  | Adults 35-54           |               | 1.4                                    |      | 21                            |  | 1.0                            |  | 28    
|WNLK-AM                             |  | News/Talk                       |  | Adults 35-54           |               |   (8)                                 |      |   (8)                        |  |   (8)                         |  |   (8)
|                                    |  |                                 |  |                        |               |                                       
|Tampa                               |  |                                 |  |                        |               |                                        |      |                               |  |                                |  |       
|WWRM-FM                             |  | Adult Contemporary              |  | Women 25-54            |               | 8.0                                    |      | 1                             |  | 5.1                            |  | 3     
|WDUV-FM                             |  | Soft Adult Contemporary         |  | Adults 35-64           |               | 6.9                                    |      | 1                             |  | 3.1                            |  | 17    
|WXGL-FM                             |  | Classic Hits                    |  | Adults 35-54           |               | 5.2                                    |      | 4                             |  | 4.3                            |  | 8     
|WSUN-FM                             |  | Alternative Rock                |  | Men 18-34              |               | 7.0                                    |      | 5                             |  | 3.0                            |  | 18    
|WPOI-FM                             |  | 80s                            |  | Adults 25-54           |               | 3.8                                    |      | 11                            |  | 3.8                            |  | 11    
|WHPT-FM                             |  | Classic Rock                    |  | Men 25-44              |               | 5.5                                    |      | 5                             |  | 3.9                            |  | 10    
|                                    |  |                                 |  |                        |               |                                       
|Tulsa                               |  |                                 |  |                        |               |                                        |      |                               |  |                                |  |       
|KKCM-FM                             |  | Christian Contemporary          |  | Women 25-54            |               | 4.5                                    |      | 6                             |  | 3.2                            |  | 12    
|KWEN-FM                             |  | Country                         |  | Adults 25-54           |               | 8.2                                    |      | 2                             |  | 8.2                            |  | 2     
|KJSR-FM                             |  | Classic Rock                    |  | Men 25-54              |               | 6.7                                    |      | 2                             |  | 5.8                            |  | 4     
|KRMG-AM                             |  | News/Talk                       |  | Adults 25-54           |               | 4.3                                    |      | 7                             |  | 4.3                            |  | 7     
|KRAV-FM                             |  | Adult Contemporary              |  | Women 25-54            |               | 6.6                                    |      | 4                             |  | 4.8                            |  | 6     

Source: Arbitron Market Reports four-book average for Winter 2006, Spring 2006, Summer 2006 and Fall 2006.

---

|(1) | Metropolitan market served; city of license may differ.
|--- | -------------------------------------------------------

|(2) | Audience share and audience rank information for WHIO-AM and WHIO-FM are combined because the stations are simulcast.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(3) | The station format was recently changed; therefore, the stations audience share and rank information for 2006 are not meaningful.
|--- | ----------------------------------------------------------------------------------------------------------------------------------

|(4) | Audience share and audience rank information for WOKV-AM and WOKV-FM are combined because the stations are simulcast.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(5) | Audience share and audience rank information for WBAB-FM and WHFM-FM are combined because the stations are simulcast.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(6) | Audience share and audience rank information for KONO-FM and KONO-AM are combined because the stations are simulcast.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(7) | Station operated by us under a joint sales agreement (JSA).
|--- | -----------------------------------------------------------

|(8) | Audience share and audience rank information for WSTC-AM and WNLK-AM are combined because the stations are simulcast.
|--- | ---------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Operating Strategy

The following is a description of the key elements of our operating strategy:

Clustering of Stations.We operate our stations in clusters to:



| |  |  | enhance net revenue growth by increasing the appeal of our stations to advertisers and enabling our stations to compete more effectively with other forms of
advertising; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | achieve operating efficiencies by consolidating broadcast facilities, eliminating duplicative positions in management and production and reducing overhead expenses.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

Management believes that operating several radio stations in each of its markets enables its sales teams to offer
advertisers more attractive advertising packages. Furthermore, as radio clusters achieve significant audience share, they can deliver to advertisers the audience reach that historically only television and newspapers could offer, with the added
benefit of frequent exposure to advertisers target customers. Management believes that our clusters of stations, and their corresponding audience shares, provide opportunities to capture an increased share of total advertising revenue in each
of our markets.

Implementation of Our Management Philosophy.Our local station operations, supported by a lean corporate staff,
employ a management philosophy emphasizing:



| |  |  | market research and targeted programming;
| | - |  | -----------------------------------------



| |  |  | a customer-focused selling strategy for advertising;
| | - |  | ----------------------------------------------------



| |  |  | marketing and promotional activities; and
| | - |  | -----------------------------------------



| |  |  | strong management teams.
| | - |  | ------------------------

Market
Research and Targeted Programming.Our research, programming and marketing strategy combine extensive research with an assessment of competitors vulnerabilities and market dynamics in order to identify specific audience opportunities
within each market. We also retain consultants and research organizations to continually evaluate listener preferences. Using this information, we tailor the programming, marketing and promotions of each station to maximize its appeal to its target
audience. Our disciplined application of market research enables each of our stations to be responsive to the changing preferences of our targeted listeners. This approach focuses on the needs of the listeners and their communities and is designed
to improve ratings and maximize the impact of advertising for our customers.

Through research, programming and marketing, we also seek to
create a distinct and marketable local identity for each of our stations in order to enhance audience share and listener loyalty and to protect against direct format competition. To achieve this objective, we employ and promote distinct high-profile
on-air personalities and local sports programming at many of our stations. For example, we broadcast Rush Limbaugh in Dayton, Jacksonville and Tulsa; The Clark Howard Show in Atlanta, Dayton, Jacksonville, Orlando,
Stamford-Norwalk and Tulsa; Neal Boortz in Atlanta, Dayton, Jacksonville, Orlando and Tulsa; Tom Joyner in Atlanta, Birmingham, Greenville, Miami, and Orlando; Sean Hannity in Atlanta, Dayton, Jacksonville,
Orlando and Tulsa; the Jacksonville Jaguars in Jacksonville; and the Orlando Magic in Orlando.

Customer-Focused Selling Strategy for
Advertising.We have implemented a unique, customer-focused approach to selling advertising known as the Consultative Selling System. Our sales personnel are trained to approach each advertiser with a view towards solving the marketing needs of
the customer. In this regard, our sales staff consults with customers, attempts to understand their business goals and offers comprehensive marketing solutions, including the use of radio advertising. Instead of merely selling station advertising
time, sales personnel are encouraged to develop innovative marketing strategies for the stations advertising customers.

Marketing
and Promotional Activities.Stations regularly engage in significant local promotional activities, including advertising on local television and in local print media, participating in telemarketing and direct mailings and sponsoring contests,
concerts and special events. Special events may include charitable athletic events, events centered on a major local occasion or local ethnic group and special community or family events. We also engage in joint promotional activities with other
media in our markets to further leverage promotional spending. These promotional efforts help our stations add new listeners and increase the amount of time spent listening to our stations.

Strong Management Teams.In addition to relying upon experienced senior operating management, we place great importance on the hiring and
development of strong local management teams and have been successful in retaining experienced management teams that have strong ties to their communities and customers.



6



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##### Table of Contents

We invest significant resources in identifying and training our employees to create a talented team of
managers at all levels of station operations. These resources include:



| |  |  | Gallup, which helps us identify and select talented individuals for management and sales positions;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | Center for Sales Strategy, an independent sales and management training company which trains and develops managers and sales executives; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a program of leadership development conducted by our senior operating management and outside consultants.
| | - |  | ---------------------------------------------------------------------------------------------------------

Local managers are empowered to run the day-to-day operations of their stations and to develop and implement strategies that will improve station
performance and establish long-term relationships with listeners and advertisers. The compensation of our senior operating management team and local station managers is dependent upon financial performance, and incentives to enhance performance are
provided through awards under our Third Amended and Restated Long-Term Incentive Plan (LTIP).

Acquisition Strategy

We have implemented our clustering strategy through the acquisition of radio stations in several existing markets as well as in new markets and through
the disposition of certain radio stations that did not enhance our operating clusters. Management believes that larger, well-capitalized companies with experienced management, such as Cox Radio, are best positioned to take advantage of acquisition
opportunities. Management considers the following factors when making an acquisition:

Market Selection Considerations. Our
acquisition strategy has been focused on clustering stations in our existing markets and making opportunistic acquisitions in additional markets in which we believe that we can achieve a leading position in terms of audience and revenue share in a
cost-effective manner. Management believes that it has the financial resources and expertise to continue to pursue its acquisition strategy when appropriate opportunities arise. Certain future acquisitions may be limited by the multiple and
cross-ownership rules of the Federal Communications Commission (FCC). See Federal Regulation of Radio Broadcasting  General Ownership Matters.

Station Considerations.We expect to concentrate on acquiring radio stations that offer, through the application of our operating philosophy, the potential for improvement in the stations performance.
Such stations may be in various stages of development, presenting us with an opportunity to apply our management techniques and enhance asset value. In evaluating potential acquisitions, we consider the strength of a stations broadcast signal.
A powerful broadcast signal enhances delivery range and clarity, thereby influencing listener preference and loyalty. We also assess the strategic fit of an acquisition with our existing clusters of radio stations. When entering a new market, we
expect to acquire a platform upon which to expand our portfolio of stations and to build a leading cluster of stations.

Industry Overview

The primary source of revenues for radio stations is the sale of advertising time to local and national spot advertisers and national
network advertisers. During the past decade, local advertising revenue as a percentage of total radio advertising revenue in a given market has ranged from approximately 75% to 80% according to the Radio Advertising Bureau. The growth in total radio
advertising revenue tends to be fairly stable. Advertising revenue has risen each year since 1965 according to the Radio Advertising Bureau, except in 2005, when revenue growth was flat, and in the years 2001 and 1991, when total radio advertising
revenue fell by approximately 7.5% and 2.8%, respectively.

According to the Radio Advertising BureausRadio Marketing Guide and
Fact Book for Advertisers, 2006 Edition, radio reaches approximately 94% of all consumers over the age of 12 every week and 73% of persons over the age of 12 turn on their radios every day. The average listener over the age of 12 spends an
average of nearly 20 hours per week listening to radio. Most radio listening occurs during the morning and evening hours, and as a result, radio advertising sold during these drive time periods achieves premium advertising rates. Each
week from 6 a.m. to 10 a.m. radio reaches 81% of persons 12 and older. In fact, from 6 a.m.  6 p.m., the busiest time of the day for stores and businesses, Americans spend more time listening to the radio (44%) than watching broadcast
television and cable combined.

Radio is considered an efficient, cost-effective means of reaching specifically identified demographic
groups. Stations are typically classified by their on-air format, such as country, adult contemporary, oldies or news/talk. A stations format and style of presentation enables it to target certain demographics. By capturing a specific share of
a markets radio listening audience, with particular concentration in a targeted demographic, a station is able to market its broadcasting time to advertisers seeking to reach a specific audience. Advertisers and stations utilize data published
by audience measuring services, such as Arbitron, to estimate how many people within particular geographical markets and demographics listen to specific stations.



7



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##### Table of Contents

The number of advertisements that can be broadcast without jeopardizing listening levels (and the
resulting ratings) is limited in part by the format of a particular station and the local competitive environment. Although the number of advertisements broadcast during a given time period may vary, the total number of advertisements broadcast on a
particular station generally does not vary significantly from year to year.

A stations local sales staff generates the majority of
its local and regional advertising sales through direct solicitations of local and regional advertising agencies and businesses. To generate national advertising sales, a station usually will engage a firm that specializes in soliciting radio
advertising sales on a national level. National sales representatives obtain advertising principally from advertising agencies located outside the stations market and receive commissions based on the revenue from the advertising obtained.

Competition

The radio broadcasting
industry is a highly competitive business. We currently are one of the largest radio broadcasting companies in the United States based on revenues. Clear Channel Communications, Inc. and CBS Radio are larger than us, both in terms of revenues and
number of stations owned or operated. Cumulus Media, Inc., Citadel Broadcasting Corporation, Entercom Communications Corporation, Salem Communications Corporation and Saga Communications own or operate more radio stations than we do; however,
according to Who Owns What as of February 2007, these radio station groups reported lower revenues. ABC Radio is larger in terms of revenues but not number of stations owned or operated, and in February 2006, Citadel Broadcasting
Corporation agreed to acquire ABC Radio subject to regulatory approvals and other closing conditions.

The success of each of our stations
depends largely upon its audience ratings and its share of the overall advertising revenue within the particular market. Our stations compete for listeners directly with other radio stations in their respective markets, primarily on the basis of
program content that appeals to a target demographic group. By building a strong listener base consisting of a specific demographic in each of our markets, we are able to attract advertisers seeking to reach those listeners. Our stations compete for
advertising revenue directly with other radio stations and with other electronic, broadcast and print media within their respective markets.

Factors that are material to a stations competitive position include management experience, the stations audience share and rank in its market, transmitter power, assigned frequency, audience characteristics, local program
acceptance, and the number and characteristics of other stations in the market area. We attempt to improve our competitive position by:



| |  |  | researching our stations programming;
| | - |  | --------------------------------------

| |  |  | implementing advertising and promotional campaigns aimed at the demographics targeted by our stations; and
| | - |  | ----------------------------------------------------------------------------------------------------------

| |  |  | managing our sales efforts to attract a larger share of advertising revenue.
| | - |  | ----------------------------------------------------------------------------

Broadcasters also may, within limits, enter into joint arrangements with other stations in a market relating to programming, advertising sales and
station operations. Management believes that radio stations that elect to take advantage of these opportunities may, in certain circumstances, have lower operating costs and may be able to offer advertisers more attractive rates and services. We
also compete with other radio station groups to purchase additional radio stations.

Although the radio broadcasting industry is highly
competitive, some barriers to entry exist. The operation of a radio broadcast station requires a license from the FCC. The number of radio stations that a single entity may own and operate in a given market is limited by the availability of FM and
AM radio frequencies allotted by the FCC to communities in that market, as well as by the FCCs multiple ownership rules. These rules regulate the number of stations that may be owned and controlled by a single entity. See Federal
Regulation of Radio Broadcasting  FCC Media Ownership Limits. The FCC also uses competitive bidding procedures (auctions) to select among mutually exclusive applicants for new broadcast stations and major changes to existing stations.

Potential advertisers can substitute advertising on radio stations with advertising through:



| |  |  | broadcast television;
| | - |  | ---------------------

| |  |  | cable television;
| | - |  | -----------------

| |  |  | direct broadcast satellite television;
| | - |  | --------------------------------------

| |  |  | daily, weekly and free-distribution newspapers;
| | - |  | -----------------------------------------------

| |  |  | other print media;
| | - |  | ------------------

| |  |  | direct mail; and
| | - |  | ----------------

| |  |  | on-line computer services.
| | - |  | --------------------------

Competing media commonly target the customers of their competitors, and advertisers regularly shift dollars from radio to these competing media and vice versa. Accordingly, there can be no assurance that any of our stations will be able to
maintain or increase our advertising revenue share. In addition, the radio broadcasting industry is subject to competition from new technologies and services that



8



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##### Table of Contents

are being developed or introduced, such as the delivery of audio programming by cable television systems, by satellite digital audio radio service and by
digital audio broadcasting. Digital audio broadcasting and satellite digital audio radio service provide for the delivery by terrestrial or satellite means of multiple new audio programming formats with compact disc quality sound to local and
national audiences. Two subscriber-based satellite services currently offer numerous channels (many without advertisements) on a nationwide basis. The delivery of information through the Internet also has created a new form of competition. The radio
broadcasting industry historically has grown despite the introduction of new technologies for the delivery of entertainment and information, such as broadcast television, cable television, satellite radio, the Internet, compact discs, and portable
digital audio players. There can be no assurance, however, that the development or introduction in the future of any new technologies or services will not have an adverse effect on the radio broadcasting industry.

Federal Regulation of Radio Broadcasting

The
ownership, operation and sale of radio stations, including those licensed to us, are subject to the jurisdiction of the FCC, which acts under authority granted by the Communications Act of 1934, as amended (the Communications Act). Among other
things, the FCC assigns frequency bands for broadcasting, determines the particular frequencies, locations and operating power of stations, issues, renews and modifies station licenses, determines whether to approve changes in ownership or control
of station licenses, regulates equipment used by stations, adopts and implements regulations and policies that directly or indirectly affect the program content, employment practices, ownership and business operations of stations, and has the power
to impose penalties, including license revocations, for violations of its rules or the Communications Act.

The following is a brief
summary of certain provisions of the Communications Act and of specific FCC rules and policies. This summary focuses on provisions material to our business, and a reader should refer to the Communications Act, FCC rules and public notices and
rulings of the FCC for further information concerning the nature and extent of federal regulation of broadcast stations.

License Renewal

Radio stations operate pursuant to renewable broadcasting licenses that are ordinarily granted by the FCC for maximum terms of eight
years. A station may continue to operate beyond the expiration date of its license if a timely-filed license renewal application is pending. During the periods when renewal applications are pending, petitions to deny license renewals can be filed by
interested parties, including interest groups and members of the public. The FCC must grant a renewal application submitted by the licensee of a broadcast station if it finds that, during the preceding term, the station has served the public
interest, convenience and necessity; there have been no serious violations by the licensee of the Communications Act or the FCCs rules; and there have been no other violations of the Communications Act or the rules which, taken together, would
constitute a pattern of abuse. If a renewal applicant fails to meet these standards, the FCC may either deny such applicants renewal application or grant the renewal application on such terms and conditions as are appropriate, including
renewal for less than a full term.

Radio broadcast licensees are required to file applications to have their licenses renewed by the FCC.
The FCC reviews all stations licensed to serve communities in a particular state at the same time. Historically, our FCC licenses have generally been renewed, and since we became a public company in 1996, the FCC has not denied any of our license
renewal applications. We have no reason to believe that our licenses will not be renewed in the ordinary course, although there can be no assurance to that effect.

For the most recent license renewal cycle, all of our licenses have been renewed except for WBLI-FM in Long Island, WSRV-FM in Atlanta and WHKO-FM and WHIO-AM in Dayton (an application for each is pending and
discussed below). A table showing our stations grouped by metropolitan market and listing the expiration date for each stations FCC license appears below. The FCCs denial of one or more of our license renewal applications could have a
material adverse effect on our business.

The license renewal application for WBLI-FM, filed in February 2006, remains pending due to
further review by the FCCs staff. The license renewal applications for WSRV-FM in Atlanta, filed in December 2003, and WHKO-FM and WHIO-AM in Dayton, filed in June 2004, remain pending due to the application by the FCC of its current
newspaper/broadcast cross-ownership rule while it reconsiders its cross-ownership limits. For further discussion of the FCCs cross-ownership limits, see Cross-Ownership Limits below. Specifically, for WHKO-FM and WHIO-AM, our
indirect parent company, Cox Enterprises, acquired ownership interests in two Ohio daily newspapers during the stations prior license terms. While these ownership interests would have been permissible under a unified cross-ownership rule
adopted by the FCC in 2003, the unified rule was sent back to the FCC for further review by the United States Court of Appeals for the Third Circuit (Third Circuit) and is not currently in effect. We have, therefore, filed petitions for temporary
waiver with the FCC asking that the FCC grant the stations license renewal applications subject to the outcome of further administrative proceedings regarding the FCCs cross-ownership limits. Similarly, when we purchased WSRV-FM we
requested and received a temporary waiver of the newspaper/broadcast cross-ownership rule, due to the newspaper interests in the Atlanta area held by Cox Enterprises. We subsequently submitted a revised ownership showing to the FCC under which
WSRV-FM would not be subject to the current cross-ownership restriction, but the FCC has not acted on that submission. In the alternative, we have also requested a temporary waiver of the newspaper/broadcast cross-ownership rule from the FCC asking
that the FCC grant the stations license renewal application subject to the outcome of further administrative proceedings.



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##### Table of Contents

The FCC classifies each AM and FM station. An AM station operates on a clear channel, regional channel or
local channel. A clear channel is one on which AM stations are assigned to serve wide areas. Clear channel AM stations are classified as:



| |  |  | Class A stations, which operate on an unlimited time basis and are designed to render primary and secondary service over an extended area;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Class B stations, which operate on an unlimited time basis and are designed to render service over a primary service area; or
| | - |  | -----------------------------------------------------------------------------------------------------------------------------

| |  |  | Class D stations, which operate either during daytime hours only, during limited times only or on an unlimited time basis with low nighttime power.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

A regional channel is one on which Class B and Class D AM stations may operate and serve primarily a principal center of
population and the rural areas contiguous to it. A local channel is one on which AM stations operate on an unlimited time basis and serve primarily a community and the suburban and rural areas immediately contiguous thereto. Class C AM stations
operate on a local channel and are designed to render service only over a primary service area that may be reduced as a consequence of permitted interference from other stations.

The minimum and maximum facilities requirements for an FM station are determined by its class. FM class designations depend upon the geographic zone in
which the transmitter of the FM station is located. In general, commercial FM stations are classified as follows, in order of increasing power and antenna height: Class A, B1, C3, B, C2, C1, C0 and C.

The following table sets forth selected information concerning each of the stations owned by us, or operated by us pursuant to a JSA, including the
metropolitan market served (city of license may differ), frequency, FCC license expiration date (a station may continue to operate beyond the expiration date if a timely-filed license renewal application is pending), FCC license classification,
antenna height above average terrain and power:



|                                    |  |           |  |                           |  |       |  |                             |     |  |               
|----------------------------------- |  | --------- |  | ------------------------- |  | ----- |  | --------------------------- | --- |  | --------------
|Market (1) and Station Call Letters |  | Frequency |  | ExpirationDate of License |  | Class |  | Height Above AverageTerrain |     |  | Power         
|Atlanta                             |  |           |  |                           |  |       |  |                             |     |  |               
|WSB-AM                              |  | 750 KHz   |  | 4/1/12                    |  | A     |  | N.A.                        | (2) |  | 50 kw         
|WALR-FM                             |  | 104.1 MHz |  | 4/1/12                    |  | C0    |  | 371 m                       |     |  | 100 kw        
|WSB-FM                              |  | 98.5 MHz  |  | 4/1/12                    |  | C0    |  | 313 m                       |     |  | 100 kw        
|WBTS-FM                             |  | 95.5 MHz  |  | 4/1/12                    |  | C1    |  | 340 m                       |     |  | 74 kw         
|WSRV-FM (3) (formerly WFOX-FM)      |  | 97.1 MHz  |  | 4/1/04                    |  | C     |  | 483 m                       |     |  | 100 kw        
|                                    |  |           |  |                           | 
|Birmingham                          |  |           |  |                           |  |       |  |                             |     |  |               
|WBHJ-FM                             |  | 95.7 MHz  |  | 4/1/12                    |  | C2    |  | 306 m                       |     |  | 12 kw         
|WBHK-FM                             |  | 98.7 MHz  |  | 4/1/12                    |  | C1    |  | 408 m                       |     |  | 39 kw         
|WZZK-FM                             |  | 104.7 MHz |  | 4/1/12                    |  | C0    |  | 404 m                       |     |  | 100 kw        
|WBPT-FM                             |  | 106.9 MHz |  | 4/1/12                    |  | C0    |  | 404 m                       |     |  | 100 kw        
|WAGG-AM                             |  | 610 KHz   |  | 4/1/12                    |  | B     |  | N.A.                        | (2) |  | 5 kw day      
|                                    |  |           |  |                           |  |       |  |                             |     |  | 1 kw night    
|WPSB-AM                             |  | 1320 KHz  |  | 4/1/12                    |  | D     |  | N.A.                        | (2) |  | 5 kw day      
|                                    |  |           |  |                           |  |       |  |                             |     |  | 0.111 kw night
|WNCB-FM                             |  | 97.3 MHz  |  | 4/1/12                    |  | C2    |  | 404 m                       |     |  | 6.4 kw        
|                                    |  |           |  |                           | 
|Dayton                              |  |           |  |                           |  |       |  |                             |     |  |               
|WHKO-FM (3)                         |  | 99.1 MHz  |  | 10/1/04                   |  | B     |  | 325 m                       |     |  | 50 kw         
|WHIO-AM (3)                         |  | 1290 KHz  |  | 10/1/04                   |  | B     |  | N.A.                        | (2) |  | 5 kw          
|WZLR-FM                             |  | 95.3 MHz  |  | 10/1/12                   |  | A     |  | 98 m                        |     |  | 6 kw          
|WHIO-FM (formerly WDPT-FM)          |  | 95.7 MHz  |  | 10/1/12                   |  | B     |  | 145 m                       |     |  | 50 kw         
|                                    |  |           |  |                           | 
|Greenville-Spartanburg              |  |           |  |                           |  |       |  |                             |     |  |               
|WJMZ-FM                             |  | 107.3 MHz |  | 12/1/11                   |  | C     |  | 308 m                       |     |  | 100 kw        
|WHZT-FM                             |  | 98.1 MHz  |  | 12/1/11                   |  | C0    |  | 304 m                       |     |  | 100 kw        
|                                    |  |           |  |                           | 
|Honolulu                            |  |           |  |                           |  |       |  |                             |     |  |               
|KRTR-FM                             |  | 96.3 MHz  |  | 2/1/14                    |  | C     |  | 645 m                       |     |  | 75 kw         
|KCCN-FM                             |  | 100.3 MHz |  | 2/1/14                    |  | C     |  | 599 m                       |     |  | 100 kw        
|KPHW-FM                             |  | 104.3 MHz |  | 2/1/14                    |  | C     |  | 645 m                       |     |  | 75 kw         
|KINE-FM                             |  | 105.1 MHz |  | 2/1/14                    |  | C     |  | 599 m                       |     |  | 100 kw        
|KRTR-AM                             |  | 650 KHz   |  | 2/1/14                    |  | B     |  | N.A.                        | (2) |  | 10 kw         
|KKNE-AM                             |  | 940 KHz   |  | 2/1/14                    |  | B     |  | N.A.                        | (2) |  | 10 kw         



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##### Table of Contents

|                                    |  |           |  |                            |  |       |  |                             |  |             
|----------------------------------- |  | --------- |  | -------------------------- |  | ----- |  | --------------------------- |  | ------------
|Market (1) and Station Call Letters |  | Frequency |  | Expiration Date of License |  | Class |  | Height Above AverageTerrain |  | Power       
|Houston                             |  |           |  |                            |  |       |  |                             |  |             
|KHTC-FM (formerly KLDE-FM)          |  | 107.5 MHz |  | 8/1/13                     |  | C     |  | 601 m                       |  | 98 kw       
|KKBQ-FM                             |  | 92.9 MHz  |  | 8/1/13                     |  | C     |  | 585 m                       |  | 100 kw      
|KTHT-FM                             |  | 97.1 MHz  |  | 8/1/13                     |  | C     |  | 563 m                       |  | 100 kw      
|KHPT-FM                             |  | 106.9 MHz |  | 8/1/13                     |  | C     |  | 579 m                       |  | 100 kw      
|                                    |  |           |  |                            | 
|Jacksonville                        |  |           |  |                            |  |       |  |                             |  |             
|WFYV-FM                             |  | 104.5 MHz |  | 2/1/12                     |  | C     |  | 309 m                       |  | 100 kw      
|WOKV-AM                             |  | 690 KHz   |  | 2/1/12                     |  | B     |  | N.A.(2)                     |  | 50 kw day   
|                                    |  |           |  |                            |  |       |  |                             |  | 25 kw night 
|WOKV-FM                             |  | 106.5 MHz |  | 2/1/12                     |  | A     |  | 100 m                       |  | 6 kw        
|WAPE-FM                             |  | 95.1 MHz  |  | 2/1/12                     |  | C     |  | 300 m                       |  | 100 kw      
|WMXQ-FM                             |  | 102.9 MHz |  | 2/1/12                     |  | C     |  | 309 m                       |  | 100 kw      
|WJGL-FM                             |  | 96.9 MHz  |  | 2/1/12                     |  | C     |  | 309 m                       |  | 100 kw      
|                                    |  |           |  |                            | 
|Long Island                         |  |           |  |                            |  |       |  |                             |  |             
|WBLI-FM (3)                         |  | 106.1 MHz |  | 6/1/06                     |  | B     |  | 152 m                       |  | 49 kw       
|WBAB-FM                             |  | 102.3 MHz |  | 6/1/14                     |  | A     |  | 82 m                        |  | 6 kw        
|WHFM-FM                             |  | 95.3 MHz  |  | 6/1/14                     |  | A     |  | 108 m                       |  | 5 kw        
|                                    |  |           |  |                            | 
|Louisville                          |  |           |  |                            |  |       |  |                             |  |             
|WVEZ-FM                             |  | 106.9 MHz |  | 8/1/12                     |  | B     |  | 204 m                       |  | 24.5 kw     
|WSFR-FM                             |  | 107.7 MHz |  | 8/1/12                     |  | B1    |  | 173 m                       |  | 8.2 kw      
|WRKA-FM                             |  | 103.1 MHz |  | 8/1/12                     |  | A     |  | 95 m                        |  | 6 kw        
|WPTI-FM                             |  | 103.9 MHz |  | 8/1/12                     |  | A     |  | 149 m                       |  | 1.35 kw     
|                                    |  |           |  |                            | 
|Miami                               |  |           |  |                            |  |       |  |                             |  |             
|WHQT-FM                             |  | 105.1 MHz |  | 2/1/12                     |  | C0    |  | 307 m                       |  | 100 kw      
|WEDR-FM                             |  | 99.1 MHz  |  | 2/1/12                     |  | C1    |  | 280 m                       |  | 100 kw      
|WFLC-FM                             |  | 97.3 MHz  |  | 2/1/12                     |  | C     |  | 307 m                       |  | 100 kw      
|WHDR-FM                             |  | 93.1 MHz  |  | 2/1/12                     |  | C0    |  | 307 m                       |  | 100 kw      
|                                    |  |           |  |                            | 
|Orlando                             |  |           |  |                            |  |       |  |                             |  |             
|WCFB-FM                             |  | 94.5 MHz  |  | 2/1/12                     |  | C     |  | 451 m                       |  | 100 kw      
|WPYO-FM                             |  | 95.3 MHz  |  | 2/1/12                     |  | C3    |  | 144 m                       |  | 12 kw       
|WDBO-AM                             |  | 580 KHz   |  | 2/1/12                     |  | B     |  | N.A.(2)                     |  | 5 kw        
|WHTQ-FM                             |  | 96.5 MHz  |  | 2/1/12                     |  | C     |  | 454 m                       |  | 100 kw      
|WWKA-FM                             |  | 92.3 MHz  |  | 2/1/12                     |  | C     |  | 454 m                       |  | 100 kw      
|WMMO-FM                             |  | 98.9 MHz  |  | 2/1/12                     |  | C2    |  | 159 m                       |  | 44 kw       
|                                    |  |           |  |                            | 
|Richmond                            |  |           |  |                            |  |       |  |                             |  |             
|WKLR-FM                             |  | 96.5 MHz  |  | 10/1/11                    |  | B     |  | 138 m                       |  | 50 kw       
|WKHK-FM                             |  | 95.3 MHz  |  | 10/1/11                    |  | B1    |  | 120 m                       |  | 17.5 kw     
|WMXB-FM                             |  | 103.7 MHz |  | 10/1/11                    |  | B     |  | 256 m                       |  | 20 kw       
|WDYL-FM                             |  | 101.1 MHz |  | 10/1/11                    |  | A     |  | 112 m                       |  | 4 kw        
|                                    |  |           |  |                            | 
|San Antonio                         |  |           |  |                            |  |       |  |                             |  |             
|KONO-FM                             |  | 101.1 MHz |  | 8/1/13                     |  | C1    |  | 302 m                       |  | 98 kw       
|KONO-AM                             |  | 860 KHz   |  | 8/1/13                     |  | B     |  | N.A.(2)                     |  | 5 kw day    
|                                    |  |           |  |                            |  |       |  |                             |  | 0.9 kw night
|KISS-FM                             |  | 99.5 MHz  |  | 8/1/13                     |  | C     |  | 453 m                       |  | 100 kw      
|KSMG-FM                             |  | 105.3 MHz |  | 8/1/13                     |  | C     |  | 453 m                       |  | 100 kw      
|KCYY-FM                             |  | 100.3 MHz |  | 8/1/13                     |  | C0    |  | 300 m                       |  | 100 kw      
|KPWT-FM (formerly KELZ-FM)          |  | 106.7 MHz |  | 8/1/13                     |  | C0    |  | 310 m                       |  | 100 kw      
|KKYX-AM                             |  | 680 KHz   |  | 8/1/13                     |  | B     |  | N.A.(2)                     |  | 50 kw day   
|                                    |  |           |  |                            |  |       |  | 10 kw night                
|                                    |  |           |  |                            | 
|Southern Connecticut                |  |           |  |                            |  |       |  |                             |  |             
|Bridgeport                          |  |           |  |                            |  |       |  |                             |  |             
|WEZN-FM                             |  | 99.9 MHz  |  | 4/1/14                     |  | B     |  | 204 m                       |  | 27.5 kw     
|New Haven                           |  |           |  |                            |  |       |  |                             |  |             
|WPLR-FM                             |  | 99.1 MHz  |  | 4/1/14                     |  | B     |  | 276 m                       |  | 15 kw       
|WYBC-FM (4)                         |  | 94.3 MHz  |  | 4/1/14                     |  | A     |  | 144 m                       |  | 3 kw        
|Stamford-Norwalk                    |  |           |  |                            |  |       |  |                             |  |             
|WCTZ-FM (formerly WKHL-FM)          |  | 96.7 MHz  |  | 4/1/14                     |  | A     |  | 100 m                       |  | 3 kw        



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|                                    |  |           |  |                            |  |       |  |                             |              |  |            
|----------------------------------- |  | --------- |  | -------------------------- |  | ----- |  | --------------------------- | ------------ |  | -----------
|Market (1) and Station Call Letters |  | Frequency |  | Expiration Date of License |  | Class |  | Height Above AverageTerrain |              |  | Power      
|WFOX-FM (formerly WEFX-FM)          |  | 95.9 MHz  |  | 4/1/14                     |  | A     |  | 91 m                        |              |  | 3 kw       
|WSTC-AM                             |  | 1400 KHz  |  | 4/1/14                     |  | C     |  | N.A.                        | (2)          |  | 0.78 kw    
|WNLK-AM                             |  | 1350 KHz  |  | 4/1/14                     |  | B     |  | N.A.                        | (2)          |  | 1 kw day   
|                                    |  |           |  |                            |  |       |  |                             | 0.5 kw night
|                                    |  |           |  |                            | 
|Tampa                               |  |           |  |                            |  |       |  |                             |              |  |            
|WWRM-FM                             |  | 94.9 MHz  |  | 2/1/12                     |  | C     |  | 470 m                       |              |  | 100 kw     
|WDUV-FM                             |  | 105.5 MHz |  | 2/1/12                     |  | C1    |  | 410 m                       |              |  | 46 kw      
|WXGL-FM                             |  | 107.3 MHz |  | 2/1/12                     |  | C1    |  | 182 m                       |              |  | 100 kw     
|WSUN-FM                             |  | 97.1 MHz  |  | 2/1/12                     |  | C2    |  | 224 m                       |              |  | 11.5 kw    
|WPOI-FM                             |  | 101.5 MHz |  | 2/1/12                     |  | C     |  | 470 m                       |              |  | 100 kw     
|WHPT-FM                             |  | 102.5 MHz |  | 2/1/12                     |  | C     |  | 503 m                       |              |  | 100 kw     
|                                    |  |           |  |                            | 
|Tulsa                               |  |           |  |                            |  |       |  |                             |              |  |            
|KKCM-FM                             |  | 102.3 MHz |  | 6/1/13                     |  | C2    |  | 150 m                       |              |  | 50 kw      
|KWEN-FM                             |  | 95.5 MHz  |  | 6/1/13                     |  | C     |  | 405 m                       |              |  | 100 kw     
|KJSR-FM                             |  | 103.3 MHz |  | 6/1/13                     |  | C     |  | 390 m                       |              |  | 100 kw     
|KRMG-AM                             |  | 740 KHz   |  | 6/1/13                     |  | B     |  | N.A.                        | (2)          |  | 50 kw day  
|                                    |  |           |  |                            |  |       |  |                             |              |  | 25 kw night
|KRAV-FM                             |  | 96.5 MHz  |  | 6/1/13                     |  | C     |  | 405 m                       |              |  | 100 kw     

---

|(1) | Metropolitan market served; city of license may differ.
|--- | -------------------------------------------------------

|(2) | Height above average terrain not applicable to AM stations.
|--- | -----------------------------------------------------------

|(3) | A timely-filed license renewal application is pending at the FCC.
|--- | -----------------------------------------------------------------

|(4) | We provide sales and other services to this station pursuant to a JSA.
|--- | ----------------------------------------------------------------------

General Ownership Matters

The Communications Act prohibits the assignment of a broadcast license or the transfer of control
of a broadcast licensee without the prior approval of the FCC. To obtain the FCCs prior consent to assign or transfer control of a broadcast license, appropriate applications must be filed with the FCC. Depending on whether the application
involves the assignment of the license or a substantial change in ownership or control of the licensee (e.g., the transfer of more than 50% of the voting stock), the application may be required to go on public notice for a period
of approximately 30 days during which petitions to deny the application may be filed by interested parties, including interest groups and members of the public. When reviewing an assignment or transfer of control application, the FCC is prohibited
from considering whether the public interest might be served by an assignment or transfer of control to any party other than the assignee or transferee specified in the application.

The FCCs multiple ownership rules limit the permissible acquisitions and investments we may make. The FCC generally applies its ownership limits to
attributable interests held by an individual, corporation, partnership or other association. In the case of corporations holding, or through subsidiaries controlling, broadcast licenses, the interests of officers, directors and those
who, directly or indirectly, have the right to vote 5% or more of the corporations stock (or 20% or more of such stock in the case of insurance companies, investment companies and bank trust departments that are passive investors) are
generally attributable. In December 2000, the FCC eliminated its longstanding rule which provided that a minority stock interest in a corporation would not be deemed attributable if there were a single holder of more than 50% of the outstanding
voting power of the corporation. The United States Court of Appeals for the District of Columbia Circuit subsequently reversed a similar rule change the FCC had adopted with respect to the ownership of cable systems. The FCC has suspended
elimination of the exemption as it applies to the ownership of broadcast stations and has commenced a rulemaking to evaluate further whether to retain the exemption. This proceeding remains pending.

The FCC treats all partnership interests as attributable, except for those limited partnership interests that are insulated by the terms of
the limited partnership agreement from material involvement in the media-related activities of the partnership. The FCC applies the same attribution and insulation standards to limited liability companies and other new business forms.

The FCC treats as attributable a partys equity and debt interests in a station licensee if, when combined, such interests exceed 33%
of the value of such station licensees total assets and if the party holding the interests either (a) supplies more than 15% of the stations total weekly programming (whether or not through a local marketing agreement (LMA)) or
(b) has an attributable interest in another media entity in the same market. Under these rules, all non-conforming interests acquired before November 7, 1996 (other than LMAs) are permanently grandfathered and thus do not constitute
attributable ownership interests.



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The Communications Act prohibits the holding of broadcast licenses by any corporation of which more than
20% of the capital stock is owned of record or voted by non-U.S. citizens, a foreign government, any corporation organized under the laws of a foreign country, or their representatives, or the holding of a broadcast license by any corporation
directly or indirectly controlled by any other corporation of which more than 25% of the capital stock is owned of record or voted by such foreign persons, governments, entities or representatives, unless the FCC finds that the public interest would
be served by granting a license under such circumstances. The FCC generally has declined to permit the control of broadcast licenses by corporations with foreign ownership or voting rights in excess of the 25% benchmark.

Local Marketing Agreements and Joint Sales Agreements

A significant number of radio broadcast licensees, including us, have entered into LMAs or JSAs. Under a typical LMA, separately-owned and licensed radio stations serving a common geographic area agree to function cooperatively in terms of
programming, advertising sales and various administrative duties, subject to the licensee of each station maintaining independent control over the programming and station operations of its own station and compliance with other requirements of the
FCCs rules and policies as well as the antitrust laws. The LMA concept is referred to in the FCC rules as time brokerage under which a licensee of a station is permitted to sell the right to broadcast blocks of time on its station
to an entity or entities which program the blocks of time and sell their own commercial advertising announcements for their own account during the time periods in question. The FCCs multiple ownership rules specifically permit radio stations
to enter into and implement LMAs, so long as the licensee of the station, which is being programmed under the LMA, maintains complete control over the operations of its station and assures compliance with applicable FCC requirements. A party
programming more than 15% of a radio stations total weekly programming pursuant to an LMA separately is considered to have an attributable ownership interest in that station if such party also owns a radio station in the same market.

Under a typical JSA, two separately owned radio stations serving a common service area agree to function cooperatively in terms of
advertising sales only. Under such an arrangement, the licensee of one station sells the advertising time for its own account on the other licensees station, but does not provide any programming to the other licensees station. This
arrangement is also subject to ultimate control by the latter licensee. A party brokering the sales of a radio station pursuant to a JSA is considered to have an attributable ownership interest in that station if such party brokers the sale of more
than 15% percent of the stations advertising time per week.

FCC Media Ownership Limits

The FCCs rules on media ownership limit the number of media properties one entity can own or in which it can have an attributable ownership
interest. In 2003, the FCC adopted several new media ownership rules. Numerous parties appealed various aspects of the new rules and in June 2004, the Third Circuit affirmed some of the new rules and remanded others to the FCC for further
consideration. Although the FCC declined to seek further judicial review, other parties appealed the Third Circuit decision to the United States Supreme Court (Supreme Court) and in June 2005, the Supreme Court declined to review the case. Since the
Supreme Court declined to review the Third Circuit decision, the FCC was obligated to revisit its media ownership rules and on June 21, 2006, the FCC initiated a rulemaking proceeding to review its media ownership rules, including the rules
applicable to us. Public comments have been submitted regarding potential rule changes and the proceeding remains pending.

Local Radio
Limits and Radio Market Concentration Issues

The FCCs 2003 rules on local radio limits have been allowed to take effect but are
subject to further administrative review by the FCC in its 2006 rulemaking proceeding. These rules limit the number of radio stations overall and the number of radio stations in a broadcast service (AM or FM) that a single party may own in a local
market. In determining the size of a market, the rules consider both commercial and non-commercial stations and use an Arbitron-based definition of a local radio market. Our ownership groupings in Orlando and Tampa exceed the FCCs ownership
limits by one FM station in each market. While pre-2003 non-compliant ownership groupings, such as our groupings in Orlando and Tampa, can currently be retained by their owners, such groupings cannot be sold intact to third parties except third
party small businesses that qualify under FCC rules as an eligible entity. There currently are no rules limiting the number of radio stations that may be owned or controlled by one entity nationally.

The FCCs current local radio multiple ownership rule limits the number of radio stations that one entity may own in a local geographic market.
These limits are as follows:



| |  |  | In a radio market with 45 or more radio stations, a party may own, operate or control up to eight radio stations, not more than five of which are in the same
broadcast service (AM or FM);
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | In a radio market with between 30 and 44 (inclusive) radio stations, a party may own, operate or control up to seven radio stations, not more than four of which are
in the same broadcast service;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In a radio market with between 15 and 29 (inclusive) radio stations, a party may own, operate or control up to six radio stations, not more than four of which are
in the same broadcast service; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In a radio market with 14 or fewer radio stations, a party may own, operate or control up to five radio stations, not more than three of which are in the same
broadcast service, except that a party may not own, operate or control more than 50% of the stations in the market.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In
its 2006 rulemaking, the FCC requested comments on whether these limits should be retained or revised, and commenters have argued to both decrease and increase the number of stations any one party may own in a particular radio market.
Notwithstanding the limits contained in the FCCs local radio multiple ownership rule, the FCC has the authority to waive its rules to permit any person or entity to own, operate or control, or have an attributable ownership interest in a
number of radio broadcast stations in excess of the rules limits if the FCC determines that such ownership, operation, control or interest will result in an increase in the number of radio broadcast stations that are in operation.

In addition to the FCCs rules governing radio ownership, the Antitrust Division of the United States Department of Justice and the Federal Trade
Commission have the authority to determine that a particular transaction presents antitrust concerns. The Antitrust Division has, in some cases, obtained consent decrees requiring radio station divestitures in a particular market based on concerns
that the status quo constituted unacceptable concentration levels. The FCC also independently examines issues of market concentration when considering radio station acquisitions and may withhold approval of radio acquisitions if the Antitrust
Division has expressed concern regarding concentration levels in a particular market, even if the acquisitions comply with the FCCs local radio ownership rules.

Cross-Ownership Limits

Current FCC rules include two cross-ownership rules applicable to us. The
first rule limits cross-ownership of radio and television stations and the second rule limits the cross-ownership of newspapers and broadcast (television and radio) stations.

Radio/Television Cross-Ownership Rule.The FCCs radio/television cross-ownership rule permits the common ownership or control of more than
one radio station, whether AM, FM or both, and a television station in the same market based on the number of independently owned media voices in the local market.



| |  |  | In markets with at least 20 independently owned media voices, a single entity may own up to two television stations and six radio stations. Alternatively, such an
entity is permitted to own one television station and seven radio stations in the same market.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In a market that includes at least ten other independently owned media voices, a single entity may own one television station and up to four radio stations or, if
permitted under FCC rules dealing with local television ownership, two television stations and up to four radio stations.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Regardless of the number of media voices in a market, a single entity may own one television station and one radio station in any market and two television stations
and one radio station in markets where the FCCs rules permit common ownership of two television stations.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Waivers
of the radio/television cross-ownership rule will be granted only under the failed station test (i.e., the subject station has been off the air for at least four months or is currently involved in involuntary bankruptcy or insolvency
proceedings).

Our parent company, Cox Broadcasting, and our indirect parent, Cox Enterprises, have attributable ownership interests in
television stations located in:



| |  |  | Orlando, Florida (two stations);
| | - |  | --------------------------------



| |  |  | Charlotte, North Carolina (two stations);
| | - |  | -----------------------------------------



| |  |  | Johnstown, Pennsylvania;
| | - |  | ------------------------



| |  |  | Pittsburgh, Pennsylvania;
| | - |  | -------------------------



| |  |  | Dayton, Ohio;
| | - |  | -------------



| |  |  | Steubenville, Ohio;
| | - |  | -------------------



| |  |  | Atlanta, Georgia;
| | - |  | -----------------



| |  |  | San Francisco/San Jose, California (two stations);
| | - |  | --------------------------------------------------



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| |  |  | El Paso, Texas;
| | - |  | ---------------



| |  |  | Seattle, Washington; and
| | - |  | ------------------------



| |  |  | Reno, Nevada (two stations).
| | - |  | ----------------------------

Newspaper/Broadcast Cross-Ownership Rule.FCC rules prohibit the common ownership of a radio or television broadcast station and a daily newspaper in the same market. The FCC has granted a permanent waiver of the radio/newspaper
cross-ownership rule only in those circumstances in which the effect of applying the rule would be unduly harsh, (the newspaper is unable to sell the commonly owned station, the sale would be at an artificially depressed price or the
local community could not support a separately-owned newspaper and radio station). The FCC previously has granted only four permanent waivers of this rule. Our ownership of WALR-FM in Atlanta, Georgia, was granted pursuant to a temporary waiver and
is conditioned on the ultimate outcome of challenges to the FCCs media ownership rules.

Cox Enterprises has attributable ownership
interests in daily newspapers located in:



| |  |  | Grand Junction, Colorado;
| | - |  | -------------------------



| |  |  | West Palm Beach, Florida;
| | - |  | -------------------------



| |  |  | Atlanta, Georgia;
| | - |  | -----------------



| |  |  | Greenville, Rocky Mount and Elizabeth City, North Carolina;
| | - |  | -----------------------------------------------------------



| |  |  | Dayton, Hamilton, Middletown and Springfield, Ohio; and
| | - |  | -------------------------------------------------------



| |  |  | Austin, Longview, Lufkin, Waco, Nacogdoches and Marshall, Texas.
| | - |  | ----------------------------------------------------------------

Cox Enterprises has a non-attributable ownership interest in a daily newspaper located in Daytona Beach, Florida.

Unified Cross-Ownership Rule.In June 2003, the FCC eliminated its newspaper/broadcast and radio/television cross-ownership limits. In place of specific cross-ownership bans, the FCC adopted a unified rule, where cross-ownership of
newspapers, radio and television stations was permitted in large markets, prohibited in small markets, and limited in mid-sized markets. The elimination of the blanket newspaper/broadcast cross-ownership rule was approved by the Third Circuit, but
the court found that the FCC did not provide a sufficiently reasoned analysis of the specific limits contained in the unified rule. In its 2006 rulemaking proceeding the FCC has not proposed to adopt a new unified cross-ownership rule, although such
a rule may ultimately be adopted, but rather has asked for public comment on whether either or both cross-ownership rules should be eliminated or retained.

As stated above, the license renewal applications for WSRV-FM in Atlanta, filed in December 2003, and WHKO-FM and WHIO-AM in Dayton, filed in June 2004, remain pending due to the application by the FCC of its current
newspaper/broadcast cross-ownership rule while it reconsiders its cross-ownership limits. For more details, see License Renewal above.

Expansion of our broadcast operations on both a local and national level will continue to be subject to the FCCs ownership rules and any changes that ultimately may be adopted. Any relaxation of the ownership rules may increase the
level of competition to the extent that our competitors may have greater resources and thereby may be in a superior position to take advantage of such changes. Any restriction may also have an effect on us and our investors.

Programming and Operations

The
Communications Act requires broadcasters to serve the public interest. Licensees are required to present programming that is responsive to community problems, needs and interests and to maintain certain records demonstrating such
responsiveness. Stations also must follow various rules promulgated under the Communications Act that regulate, among other things, political advertising, equal employment opportunity outreach and record keeping, sponsorship identification, the
advertisement of contests and lotteries, obscene and indecent broadcasts and technical operations including limits on radio frequency radiation. Failure to observe these or other rules and policies can result in the imposition of various sanctions,
including monetary forfeitures, the grant of short-term (i.e.,less than the full-term) renewals or, for particularly egregious violations, the denial of a license renewal application or the revocation of a license.

Proposed Changes

The United States Congress and the
FCC continually consider new laws, regulations and policies regarding a wide variety of matters that could, directly or indirectly, affect our operations, ownership and profitability; result in the loss of audience share and advertising revenue; or
affect our ability to acquire additional radio broadcast stations or to finance such acquisitions. We can neither predict what matters might be considered nor judge in advance what impact, if any, the implementation of any of these proposals or
changes might have on our business.



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##### Table of Contents

Environmental

As the owner, lessee or operator of various real properties and facilities, we are subject to various federal, state and local environmental laws and regulations. Historically, compliance with these laws and regulations has not had a
material adverse effect on our business. There can be no assurance, however, that compliance with existing or new environmental laws and regulations will not require us to make significant expenditures of funds.

Seasonality

Seasonal revenue fluctuations are common
in the radio broadcasting industry and are due primarily to fluctuations in advertising expenditures. Our revenues and operating income are typically lowest in the first quarter.

Employees

As of December 31, 2006, we employed 1,443 full-time and 676 part-time employees. We
believe relations with our employees are satisfactory, and there are no collective bargaining agreements in effect for our employees.

We
employ several on-air personalities with large audiences in their respective markets. We enter into employment agreements with certain on-air personalities in order to protect our interests in these employee relationships.

Patents and Trademarks

We own numerous domestic
trademark registrations related to the business of our stations. We do not believe that any of our trademarks are material to our business or operations. We own no patents or patent applications.

Available Information

Our Internet address is
www.coxradio.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amended periodic reports are available free of charge through our Internet web site.

Forward-Looking Statements

This Form 10-K includes
forward-looking statements, which are statements that relate to our future plans, earnings, objectives, expectations, performance and similar projections, as well as any facts or assumptions underlying these statements or projections.
These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical results, results we anticipate or results expressed or implied by such forward-looking statements. These
risks and uncertainties include, among others, the factors described under Item 1A. Risk Factors below.

We undertake no
obligation to update any forward-looking statements or to release publicly the results of any revisions to forward-looking statements made in this Form 10-K to reflect events or circumstances after the date of this Form 10-K or to reflect the
occurrence of unanticipated events.



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

The following factors (in addition to others) could have a material and
adverse impact on our business:

A significant portion of our revenue has historically been derived from our operations in the Atlanta market.

A significant portion of our business historically has been conducted in the Atlanta market. Net revenues earned from radio stations
located in Atlanta represented 23%, 23% and 25% of total revenues for the years ended December 31, 2006, 2005 and 2004, respectively.

We may lose
audience share and advertising revenue to competing radio stations, satellite radio and other forms of media.

The radio broadcasting
industry is a highly competitive business. Our radio stations compete against other radio stations and other media (including new technologies and services that are being developed or introduced) for audience share and advertising revenue. Factors
that are material to a stations competitive position include management experience, the stations audience share and rank in its market, transmitter power, assigned frequency, audience characteristics, local program acceptance and the
number and characteristics of other stations in the market area. New technologies (such as satellite-delivered and portable digital audio players and hand-held programmable devices including iPods and cellular telephones) allow listeners to avoid
traditional commercial advertisements and offer superior sound quality as compared to terrestrial radio broadcasts. In addition, recent consolidation in the radio broadcasting industry



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##### Table of Contents

has resulted in major station groups packaging advertising inventory for sale to national advertisers, in competition with our business. Competition for
advertising dollars in our markets could lead to lower advertising rates as we attempt to retain customers or may cause us to lose customers to our competitors who offer lower rates that we are unable or unwilling to match. No assurance can be given
that any of our stations will be able to maintain or increase their current audience ratings or advertising revenue share.

Other variables may affect
our financial performance, such as loss in advertising revenue or fluctuations in operating costs.

Substantially all of our revenue
comes from advertising revenue. A decline in the level of business activity of our advertisers or cancellations or delays in purchases of advertising could adversely affect our results of operations, especially if we are unable to replace these
purchases. In addition, we may lose advertising revenue due to an unfavorable shift in population or other demographics which may cause us to lose advertising customers as people migrate to other markets.

Unfavorable fluctuations in operating costs, which we are unwilling or unable to pass through to our customers, may also affect our financial
performance.

Our acquisition strategy could be hampered by a lack of attractive opportunities or other risks associated with integrating the
operations, systems and management of the radio stations we acquire.

A principal component of our long-term business strategy is the
acquisition of additional radio stations. We intend to continue to evaluate the acquisition of additional radio stations or radio station groups. There can be no assurance that future acquisitions will be available on attractive terms. In addition,
there can be no assurance that any synergies or savings will be achieved as a result of any acquisitions, that the integration of new stations or management groups into our operations can be accomplished successfully or on a timely basis, that
stations acquired for their growth potential will in fact grow or that other aspects of our acquisition strategy can be implemented.

We must respond to
the rapid changes in technology, services and standards that characterize our industry in order to remain competitive.

The radio
broadcasting industry is subject to rapid technological change, evolving industry standards and the emergence of competition from new technologies and services. We cannot assure you that we will have the resources to acquire new technologies or to
introduce new services that could compete with these new technologies. Various new media technologies and services are being developed or introduced, including:



| |  |  | satellite-delivered digital audio radio service, which offers subscriber-based satellite radio services with numerous niche formats;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------



| |  |  | audio programming by cable systems, direct-broadcast satellite systems, personal communications systems, Internet content providers and other digital audio
broadcast formats;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In-band On-channelTMdigital radio, which provides multi-channel, multi-format digital radio services in the same bandwidth currently occupied by traditional AM and FM radio services; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | low-power FM radio, which could result in additional FM radio broadcast outlets.
| | - |  | --------------------------------------------------------------------------------

We cannot predict the effect, if any, that competition arising from new technologies or regulatory change may have on the radio broadcasting industry or
on our financial condition and results of operations.

Our business depends on maintaining our licenses with the FCC. We could be prevented from
operating a radio station if we fail to maintain its license.

The radio broadcasting industry is subject to extensive and changing
regulation. The Communications Act, and FCC rules and policies require FCC approval for transfers of control and assignments of FCC licenses. The filing of petitions or complaints against FCC licensees could result in the FCC delaying the grant of,
or refusing to grant, its consent to the assignment of licenses to or from an FCC licensee or the transfer of control of an FCC licensee. In certain circumstances, the Communications Act, and FCC rules and policies will operate to impose limitations
on alien ownership and voting of our common stock. There can be no assurance that there will be no changes in the current regulatory scheme, the imposition of additional regulations or the creation of new regulatory agencies, which changes could
restrict or curtail our ability to acquire, operate and dispose of stations or, in general, to compete profitably with other operators of radio and other media properties.

Each of our radio stations operates pursuant to one or more licenses issued by the FCC. Under FCC rules, radio licenses are granted for a term of eight
years.Our licenses expire at various times between the years 2011 and 2014.Although we will apply to renew these licenses, third parties may challenge our renewal applications. While we are not aware of facts or circumstances that
would prevent us



17



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from having our current licenses renewed, there can be no assurance that the licenses will be renewed or that renewals will not include conditions or
qualifications that could adversely affect our business and operations. Failure to obtain the renewal of any of our broadcast licenses or to obtain FCC approval for an assignment or transfer to us of a license in connection with a radio station
acquisition may have a material adverse effect on our business and operations. In addition, if we or any of our officers, directors or significant stockholders materially violates the FCCs rules and regulations or the Communications Act, is
convicted of a felony or is found to have engaged in unlawful anticompetitive conduct or fraud upon another government agency, the FCC may, in response to a petition from a third party or on its own initiative, in its discretion, commence a
proceeding to impose sanctions upon us which could involve the imposition of monetary fines, the revocation of our broadcast licenses or other sanctions. If the FCC were to issue an order denying a license renewal application or revoking a license,
we would be required to cease operating the applicable radio station only after we had exhausted all rights to administrative and judicial review without success.

There is significant uncertainty regarding the FCCs media ownership rules, and such rules could restrict our ability to acquire radio stations.

The radio broadcasting industry is subject to extensive and changing federal regulation. Among other things, the Communications Act and FCC rules and policies limit the number of broadcasting properties that any
person or entity may own (directly or by attribution) in any market and require FCC approval for transfers of control and assignments of licenses.

In June 2003, the FCC adopted several new media ownership rules (see generally Federal Regulation of Radio Broadcasting and FCC Media Ownership Limits in Item 1. Business). Numerous parties appealed various
aspects of the new rules and in June 2004, the Third Circuit affirmed some of the new rules and remanded others to the FCC for further consideration. Although the FCC declined to seek further judicial review, other parties appealed the Third Circuit
decision to the Supreme Court and in June 2005, the Supreme Court declined to review the case. Since the Supreme Court declined to review the Third Circuit decision the FCC was obligated to revisit its media ownership rules, and on June 21,
2006, the FCC initiated a rulemaking proceeding to review its media ownership rules, including the rules applicable to us. We cannot predict what effect, if any, revised FCC media ownership rules may have on our ability or the ability of our
competitors to acquire additional radio stations or on our ability to continue to hold the radio stations we currently own.

The FCC has increased
enforcement of its indecency rules against the broadcast industry.

The FCC has enhanced its enforcement efforts relating to the
regulation of indecency and has threatened to initiate license revocation proceedings against a broadcast licensee who commits a serious indecency violation. Legislation passed by Congress in 2006 dramatically increased the penalties for
broadcasting indecent programming and potentially subjects broadcasters to license revocation, renewal or qualification proceedings in the event that they broadcast indecent material. In addition, the FCCs heightened focus on the indecency
regulatory scheme, against the broadcast industry generally, has encouraged third parties to oppose broadcaster license renewal applications and applications for consent to acquire broadcast stations.

Our ability to generate revenue could be affected by economic recession.

We derive substantially all of our revenue from the sale of advertising time on our radio stations. Generally, advertising tends to decline during economic recessions or downturns. Furthermore, because a substantial
portion of our revenue is derived from local advertisers, our ability to generate advertising revenue in specific markets is directly affected by local or regional economic conditions.

A continued recession, or a downturn in the U.S. economy, or in the economy of any individual geographic market in which we own or operate stations,
could have a significant effect on our financial condition or results of operations.

The loss of key personnel could disrupt the management and
operations of our business.

Our business is managed by a small number of key management and operating personnel. In addition, some of
our on-air personnel have significant loyal audiences in their respective markets and are sometimes significantly responsible for the ranking of a station and the ability of a station to sell advertising. Our loss of one or more of these individuals
could have a material adverse effect on our business. We believe that our future success will depend in large part on our ability to attract and retain highly skilled and qualified personnel and to expand, train and manage our employee base. We have
entered into agreements with some of our personnel that include provisions restricting their ability to compete with us under specified circumstances.

Cox Enterprises can control matters on which our common stockholders may vote, and its interests may conflict with yours.

Cox Enterprises, through wholly owned subsidiaries, owns approximately 65% of our outstanding common stock and has approximately 95% of the voting power of Cox Radio. Accordingly, Cox Enterprises has sufficient voting power to elect all the
members of our board of directors and effect transactions without the approval of our public stockholders, except for those limited transactions that require a separate class vote. The interests of Cox Enterprises, other subsidiaries of which
operate businesses in other industries, including television broadcasting, broadband communications, auto auctions, Internet content development, newspapers and other print publications may from time to time diverge from our interests.



18



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In addition, from time to time, we enter into transactions with Cox Enterprises or its affiliates. For a
summary of certain material transactions with Cox Enterprises, see Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  Transactions with Affiliated Companies. Cox
Enterprises interests could differ from ours with respect to business dealings with Cox Enterprises, including potential acquisitions of businesses or properties and the issuance of additional securities. Our Audit Committee consists of
independent directors and addresses certain potential conflicts of interest and related party transactions that may arise between us and Cox Enterprises and its other affiliates. However, there can be no assurance that any conflicts of interest will
be resolved in our favor.

Anti-takeover and other provisions of our Certificate of Incorporation could delay or deter a change of control.

Inability of stockholders to call special stockholders meeting; Cox Enterprises right to act without a meeting.Our
certificate of incorporation provides that a special meeting of stockholders may be called only by our board of directors. The principal effect of this provision is to prevent stockholders from forcing a special meeting. In addition, our certificate
of incorporation provides that any action required by the Delaware general corporate law to be taken at any annual or special meeting of stockholders, and any action which may be taken at any annual or special meeting of stockholders, may be taken
without a meeting and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of record of shares of our outstanding stock having not less than the minimum number of votes necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were present and voted. However, if stockholder action is taken by written consent, we, in accordance with the rules and regulations of the SEC, will be required to send each
stockholder entitled to vote on the matter voted on, but whose consent was not solicited, a written information statement at least 20 calendar days prior to the earliest date on which the corporate action may be taken. Such information statement
will contain information substantially similar to that which would have been contained in a proxy statement complying with Schedule 14A of the Securities Exchange Act of 1934.

Procedures for stockholder proposal.Our certificate of incorporation provides that a stockholder must furnish written notice to our corporate
secretary of any nomination or business proposal to be brought before a stockholders meeting not less than 30 nor more than 60 days prior to the meeting as originally scheduled. In the event that less than 40 days public notice of a meeting is
given by us, a stockholder must furnish notice of a nomination or business proposal not later than the close of business on the tenth day following the mailing or the public disclosure of notice of the meeting date. These procedures prohibit last
minute attempts by any stockholder to nominate a director or present a business proposal at an annual stockholders meeting.

Foreign
ownership.Our certificate of incorporation restricts the ownership, voting and transfer of our capital stock, including the Class A common stock and the Class B common stock, in accordance with the Communications Act and the rules of the
FCC, to prohibit ownership of more than 25% of our outstanding capital stock (or more than 25% of the voting rights of our capital stock) by or for the account of aliens or corporations otherwise subject to domination or control by aliens. Our
certificate of incorporation also prohibits any transfer of our capital stock that would cause us to violate this prohibition. In addition, our certificate of incorporation authorizes our board of directors to adopt such provisions as it deems
necessary to enforce these prohibitions, including the inclusion of a legend regarding restrictions on foreign ownership of our capital stock on the certificates representing such capital stock. The Class A common stock certificates contain a
certification that must be executed by the transferee of any such certificate before transfers of the shares represented thereby may be made on our books. Such certification addresses whether such transferee, or any person or entity for whose
account such shares will be held, is an alien. In addition, our certificate of incorporation provides that we reserve the right to refuse to honor any transfer of our capital stock which, in the judgment of us or our transfer agent, would or might
constitute a violation of the Communications Act or the FCC rules and regulations.



|Item 1B. | Unresolved Staff Comments
|-------- | -------------------------

None.



|ITEM 2. | Properties
|------- | ----------

We lease corporate office space in Atlanta, Georgia. The types of
properties required to support each of our stations include offices, studios, transmitter sites and antenna sites. The transmitter sites and antenna sites generally are located so as to provide maximum market coverage.

We own transmitter and antenna sites in:



| |  |  | Atlanta, Georgia;
| | - |  | -----------------



| |  |  | Birmingham, Alabama;
| | - |  | --------------------



19



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##### Table of Contents

| |  |  | Bridgeport, New Haven and Stamford-Norwalk, Connecticut;
| | - |  | --------------------------------------------------------



| |  |  | Dayton, Ohio;
| | - |  | -------------



| |  |  | Greenville, South Carolina;
| | - |  | ---------------------------



| |  |  | Houston and San Antonio, Texas;
| | - |  | -------------------------------



| |  |  | Jacksonville, Orlando and Tampa, Florida;
| | - |  | -----------------------------------------



| |  |  | Long Island, New York;
| | - |  | ----------------------



| |  |  | Louisville, Kentucky; and
| | - |  | -------------------------



| |  |  | Tulsa, Oklahoma.
| | - |  | ----------------

We lease
transmitter and antenna sites in:



| |  |  | Atlanta, Georgia;
| | - |  | -----------------



| |  |  | Birmingham, Alabama;
| | - |  | --------------------



| |  |  | Bridgeport, New Haven and Stamford-Norwalk, Connecticut;
| | - |  | --------------------------------------------------------



| |  |  | Dayton, Ohio;
| | - |  | -------------



| |  |  | Greenville, South Carolina;
| | - |  | ---------------------------



| |  |  | Honolulu, Hawaii;
| | - |  | -----------------



| |  |  | Houston and San Antonio, Texas;
| | - |  | -------------------------------



| |  |  | Jacksonville, Miami, Orlando and Tampa, Florida;
| | - |  | ------------------------------------------------



| |  |  | Long Island, New York;
| | - |  | ----------------------



| |  |  | Louisville, Kentucky;
| | - |  | ---------------------



| |  |  | Richmond, Virginia; and
| | - |  | -----------------------



| |  |  | Tulsa, Oklahoma.
| | - |  | ----------------

We own studio and
office facilities in:



| |  |  | Birmingham, Alabama;
| | - |  | --------------------



| |  |  | Dayton, Ohio;
| | - |  | -------------



| |  |  | Miami and Orlando, Florida; and
| | - |  | -------------------------------



| |  |  | Long Island, New York.
| | - |  | ----------------------

We lease
studio and office facilities in:



| |  |  | Atlanta, Georgia;
| | - |  | -----------------



| |  |  | Birmingham, Alabama;
| | - |  | --------------------



| |  |  | Bridgeport, New Haven and Stamford-Norwalk, Connecticut;
| | - |  | --------------------------------------------------------



| |  |  | Dayton, Ohio;
| | - |  | -------------



| |  |  | Greenville, South Carolina;
| | - |  | ---------------------------



| |  |  | Honolulu, Hawaii;
| | - |  | -----------------



| |  |  | Houston and San Antonio, Texas;
| | - |  | -------------------------------



| |  |  | Long Island, New York;
| | - |  | ----------------------



| |  |  | Louisville, Kentucky;
| | - |  | ---------------------



| |  |  | Richmond, Virginia;
| | - |  | -------------------



| |  |  | Jacksonville and Tampa, Florida; and
| | - |  | ------------------------------------



| |  |  | Tulsa, Oklahoma.
| | - |  | ----------------

We generally
consider our facilities to be suitable and of adequate size for their current and intended purposes. We do not anticipate any difficulties in renewing any facility leases or in leasing additional space, if required.

We own substantially all of our other equipment, consisting principally of transmitting antennae, transmitters, studio equipment and general office
equipment. The towers, antennae and other transmission equipment used by our stations are generally in good condition, although opportunities to upgrade facilities are continuously reviewed.



|ITEM 3. | Legal Proceedings
|------- | -----------------

We are party to various legal proceedings that are ordinary and incidental
to our business. Management does not expect that any of these currently pending legal proceedings will have a material adverse impact on our consolidated financial position, consolidated results of operations or cash flows.



20



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##### Table of Contents

|ITEM 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

None.

PART II



|ITEM 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|------- | ------------------------------------------------------------------------------------------------------------

The information required by this Item with respect to the market and historical prices for our Class A common stock and dividend policy is incorporated by reference to the section entitled Shareholder
Information of our 2006 Annual Report to Shareholders. The information required by this Item with respect to securities authorized for issuance under equity compensation plans is incorporated by reference to our Proxy Statement for the 2007
Annual Meeting of Shareholders.

On August 29, 2005, we announced that our board of directors had authorized a repurchase program for
the purchase of up to $100.0 million of our Class A common stock. We may commence, suspend or terminate the repurchase program at any time, without any prior notice, depending upon market conditions and various other factors. Repurchased shares
are held in treasury, and the program does not have an expiration date. As of December 31, 2006, we had purchased approximately 6 million shares for an aggregate purchase price of approximately $84.8 million, including commissions and
fees, at an average price of $14.21 per share. We did not repurchase any shares of Class A common stock during the three-month period ended December 31, 2006.

The following graph compares, for the period beginning December 31, 2001 and ending on December 31, 2006, the cumulative total return on our Class A common stock to the cumulative total returns of the
Standard & Poors 500 Stock Index and of an index consisting of certain peer radio broadcasting companies with which we compete. The peer group index is comprised of the common stock of Clear Channel Communications Inc. and Emmis
Broadcasting Corporation and is weighted for the respective market capitalization of each company. The comparison assumes $100 was invested on December 31, 2001 in our Class A common stock and in each of the foregoing indices and that all
dividends were reinvested.

LOGO



|           |  |          |        |         |   |          |  |         |       |          |   |         |  |          |       |         |   |          |  |         |        |          |   |        |  |   |        |  |   |        |  |   |       
|---------- |  | -------- | ------ | ------- | - | -------- |  | ------- | ----- | -------- | - | ------- |  | -------- | ----- | ------- | - | -------- |  | ------- | ------ | -------- | - | ------ |  | - | ------ |  | - | ------ |  | - | ------
|           |  | 12/31/01 |        | 6/30/02 |   | 12/31/02 |  | 6/30/03 |       | 12/31/03 |   | 6/30/04 |  | 12/31/04 |       | 6/30/05 |   | 12/31/05 |  | 6/30/06 |        | 12/31/06
|CXR        |  | $        | 100.00 |         | $ | 94.58    |  | $       | 89.52 |          | $ | 90.70   |  | $        | 99.02 |         | $ | 68.21    |  | $       | 64.68  |          | $ | 61.81  |  | $ | 55.26  |  | $ | 56.59  |  | $ | 63.97 
|S&P500     |  | $        | 100.00 |         | $ | 86.22    |  | $       | 76.60 |          | $ | 84.88   |  | $        | 96.85 |         | $ | 99.37    |  | $       | 105.56 |          | $ | 103.77 |  | $ | 108.73 |  | $ | 110.64 |  | $ | 123.54
|Peer Group |  | $        | 100.00 |         | $ | 63.30    |  | $       | 73.54 |          | $ | 83.57   |  | $        | 92.40 |         | $ | 72.89    |  | $       | 66.07  |          | $ | 61.02  |  | $ | 62.15  |  | $ | 60.97  |  | $ | 69.45 



21



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##### Table of Contents

|ITEM 6. | Selected Consolidated Financial Data
|------- | ------------------------------------

The following selected financial data have been derived
from our consolidated financial statements. This data should be read in conjunction with Managements Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes
thereto included in this report.



|                                                                             |  |                                              |         |   |      |   |         |      |  |      |         |      |   |         |  |   |        
|---------------------------------------------------------------------------- |  | -------------------------------------------- | ------- | - | ---- | - | ------- | ---- |  | ---- | ------- | ---- | - | ------- |  | - | -------
|                                                                             |  | Year Ended December 31,                     
|                                                                             |  | 2006                                         |         |   | 2005 |   |         | 2004 |  | 2003 |         | 2002
|                                                                             |  | (Amounts in millions, except per share data)
|Statements of income data:                                                   |  |                                              |         |   |      |   |         |      |  |      |         |      |   |         |  |   |        
|Net revenues(1)                                                              |  | $                                            | 440.5   |   |      | $ | 437.9   |      |  | $    | 438.2   |      | $ | 425.9   |  | $ | 420.6  
|Cost of services (exclusive of depreciation and amortization shown below)(2) |  |                                              | 86.4    |   |      |   | 86.3    |      |  |      | 98.2    |      |   | 95.6    |  |   | 93.2   
|Selling, general and administrative                                          |  |                                              | 171.4   |   |      |   | 169.8   |      |  |      | 162.6   |      |   | 162.2   |  |   | 161.1  
|Corporate general and administrative                                         |  |                                              | 19.9    |   |      |   | 19.4    |      |  |      | 17.7    |      |   | 16.3    |  |   | 15.5   
|Depreciation and amortization                                                |  |                                              | 11.2    |   |      |   | 11.2    |      |  |      | 11.8    |      |   | 11.8    |  |   | 12.2   
|(Gain) Loss on loan guarantee(3)                                             |  |                                              |        |   |      |   | (0.1    | )    |  |      | 3.1     |      |   |        |  |   |       
|Impairment of intangible assets(4)                                           |  |                                              | 176.3   |   |      |   | 14.4    |      |  |      |        |      |   | 0.3     |  |   |       
|Other(5)                                                                     |  |                                              | 0.8     |   |      |   | 0.1     |      |  |      | 1.1     |      |   | 0.6     |  |   | 0.3    
|                                                                             |  |                                              |         |   |      |   |         |      |  |      |         |      |   |         |  |   |        
|Operating (loss) income                                                      |  |                                              | (25.5   | ) |      |   | 136.8   |      |  |      | 143.7   |      |   | 139.1   |  |   | 138.3  
|Interest expense                                                             |  |                                              | 25.3    |   |      |   | 27.4    |      |  |      | 30.4    |      |   | 33.6    |  |   | 39.7   
|Cumulative effect of accounting changes, net of tax(6)                       |  |                                              |        |   |      |   |        |      |  |      |        |      |   |        |  |   | 13.9   
|Net (loss) income(6)                                                         |  |                                              | (24.4   | ) |      |   | 61.3    |      |  |      | 68.0    |      |   | 66.6    |  |   | 45.9   
|Net (loss) income per common share  basic                                   |  |                                              | (0.25   | ) |      |   | 0.61    |      |  |      | 0.68    |      |   | 0.66    |  |   | 0.46   
|Net (loss) income per common share - diluted                                 |  |                                              | (0.25   | ) |      |   | 0.61    |      |  |      | 0.67    |      |   | 0.66    |  |   | 0.46   
|                                                                             |  |                                              |         |   |     
|Balance sheet data (end of period):                                          |  |                                              |         |   |      |   |         |      |  |      |         |      |   |         |  |   |        
|Cash and cash equivalents                                                    |  | $                                            | 4.4     |   |      | $ | 3.5     |      |  | $    | 3.2     |      | $ | 4.2     |  | $ | 4.7    
|Intangible assets, net(7)                                                    |  |                                              | 1,918.0 |   |      |   | 2,086.7 |      |  |      | 2,091.6 |      |   | 2,074.8 |  |   | 2,070.0
|Total assets                                                                 |  |                                              | 2,117.9 |   |      |   | 2,266.1 |      |  |      | 2,281.9 |      |   | 2,278.8 |  |   | 2,271.7
|Total debt (including amounts due to/from Cox Enterprises)                   |  |                                              | 378.0   |   |      |   | 414.9   |      |  |      | 468.3   |      |   | 528.5   |  |   | 611.5  

---

|(1) | Total revenues less advertising agency commissions. See Note 2 to the consolidated financial statements for our revenue recognition policy.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes programming and production expenses, which represents all costs of services (exclusive of depreciation and amortization).
|--- | ----------------------------------------------------------------------------------------------------------------------------------

|(3) | Includes a charge of $3.1 million related to a then-estimated loss on loan guarantee in 2004. Amounts recovered on the loan guarantee of $0.1 million are included in 2005.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Includes charges of $176.3 million, $14.4 million and $0.3 million related to write-downs of impaired intangible assets in 2006, 2005 and 2003, respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Other is comprised of (gains)/losses on sales of assets and (gains)/losses on sales of radio stations.
|--- | ------------------------------------------------------------------------------------------------------

|(6) | Net income for 2002 includes a charge, net of tax, of $13.9 million related to the cumulative effect of an accounting change resulting from adoption of Statement of Financial
Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Intangible assets include FCC licenses, goodwill and other intangible assets.
|--- | -----------------------------------------------------------------------------



|ITEM 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

General

We are a leading national radio broadcast company whose business is acquiring, developing and operating radio stations located
throughout the United States. Cox Enterprises indirectly owns approximately 65% of our common stock and has approximately 95% of the voting power of Cox Radio.

The primary source of our revenues is the sale of local and national advertising for broadcast on our radio stations. Historically, approximately 71% and 22% of our net revenues have been generated from local and
national advertising, respectively. In addition to the sale of advertising time for cash, our stations also exchange advertising time for goods, services or programming, which can be used by the stations in their business operations. The use of such
barter transactions is generally confined to promotional items or services for which we would otherwise have paid cash. Barter transactions for programming are used to supplement station program offerings. Advertising spots given up under these
arrangements are based on contractual terms. In addition, it is our general policy not to pre-empt advertising spots paid for in cash with advertising spots paid for in trade. Our most significant station operating expenses are employees
salaries and benefits, commissions, programming expenses and advertising and promotional expenditures.

Our revenues vary throughout the
year. As is typical in the radio broadcasting industry, our revenues and operating income are typically lowest in the first quarter. Our operating results in any period may be affected by the incurrence of advertising and promotional expenses that
do not necessarily produce commensurate revenues until the impact of the advertising and promotion is realized in future periods.



22



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##### Table of Contents

Critical Accounting Estimates

Use of Estimates

Our accounting and reporting policies are in accordance with accounting principles generally accepted in
the United States and conform to general practices within the radio broadcasting industry. An accounting estimate would be a critical accounting estimate for purposes of the disclosure in this report only if it meets two criteria. First, the
accounting estimate requires management to make assumptions about matters that are highly uncertain at the time the accounting estimate is made. Second, it must be the case that different estimates that management reasonably could have used for the
accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period-to-period, would have a material impact on the presentation of our financial condition, changes in financial condition
or results of operations. The estimates and assumptions we use are based on historical experience and other factors, which management believes to be reasonable under the circumstances. We evaluate our estimates on an on-going basis, including those
related to intangible assets, bad debts, contingencies and litigation, income taxes and fair value of financial instruments (as discussed in Quantitative and Qualitative Disclosure About Market Risk below). Actual results could differ
significantly from these estimates and assumptions and could have a material impact on the carrying value of assets and liabilities at the balance sheet dates and results of operations for the reporting periods.

We believe the following are the critical accounting estimates that require the most significant judgments and assumptions and are particularly
susceptible to a significant change in the preparation of the financial statements.

Impairment of Intangible Assets

Intangible assets consist primarily of FCC broadcast licenses, but also include goodwill and certain other intangible assets acquired in purchase business
combinations. Upon the adoption of SFAS No. 142, Goodwill and Other Intangible Assets, on January 1, 2002, we ceased amortization of goodwill and FCC licenses, which are indefinite-lived intangible assets. Other intangible
assets are amortized on a straight-line basis over the contractual lives of the assets.

We evaluate our FCC licenses for impairment
annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. FCC licenses are evaluated for impairment at the market level using the direct method. If the carrying amount of FCC licenses is
greater than their estimated fair value in a given market, the carrying amount of FCC licenses in that market is reduced to its estimated fair value. Based on our annual impairment test as of December 31, 2006, we recorded a pre-tax
impairment charge of $173.9 million ($106.8 million after-tax) to reduce the carrying value of our FCC licenses in the Birmingham, Greenville, Houston, Louisville and Richmond markets to their fair value.

We also evaluate goodwill in each of our reporting units (markets) for impairment annually, or more frequently if certain circumstances are present,
using the residual method. If the carrying amount of goodwill in a reporting unit is greater than its implied value, determined from the estimated fair value of that reporting unit, the carrying amount of goodwill in that reporting unit is
reduced to its estimated fair value. Based on our annual goodwill impairment test as of December 31, 2006, we recorded an impairment charge of $2.5 million to reduce the carrying value of goodwill in the Louisville market to its fair market
value.

We utilize independent appraisals in testing FCC licenses and goodwill for impairment. These appraisals principally use the
discounted cash flow methodology. This income approach consists of a quantitative model, which incorporates variables such as market advertising revenues, market revenue share projections, anticipated operating profit margins and various
discount rates. The variables used in the analysis reflect historical station and advertising market growth trends, as well as anticipated performance and market conditions. Multiples of operating cash flow are also considered. We
evaluate amortizing intangible assets for recoverability when circumstances indicate an impairment may have occurred, using an undiscounted cash flow methodology. If the future undiscounted cash flows for the intangible asset are less than net
book value, net book value is reduced to the estimated fair value.

Allowance for Doubtful Accounts

We evaluate the collectibility of our accounts and notes receivable based on a combination of factors. In circumstances where we are aware of a specific
partys inability to meet its financial obligations, we record a specific reserve to reduce the amounts recorded to what we believe will be collected. For all other parties, the evaluation considers the balance of aged receivables, the nature
and volume of the portfolio, specific problem accounts and notes receivable, and economic conditions that may affect the debtors ability to repay, and such other factors as, in our judgment, deserve recognition under existing economic
conditions. Accounts and notes receivable are charged-off to the allowance when, in our opinion, such receivables are deemed to be uncollectible. Subsequent recoveries, if any, are credited to the allowance. In addition, we consider the
customers creditworthiness prior to revenue recognition.

Contingencies and Litigation

On an on-going basis, we evaluate our exposures related to contingencies and litigation and record a liability when available information indicates that a
liability is probable and estimable. We also disclose significant matters that are reasonably possible to result in a loss or are probable but not estimable.



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Income Tax Estimates

The provision for income taxes is based on current period income, changes in deferred income tax assets and liabilities, changes in our operations in various jurisdictions, income tax rates and tax positions taken on
returns. We prepare and file tax returns based on our interpretation of tax laws and regulations and record estimates based on these judgments and interpretations. Significant judgment is required in assessing and estimating the application and
interpretation of complex tax laws and regulations. In the normal course of business, our filed tax returns are subject to examination by taxing authorities. These examinations could result in challenges to tax positions that we have taken. These
challenges could arise from a variety of tax issues such as the deductibility of certain expenses, the timing of the recognition of income and expense, allocations of income and expense between states, the tax basis of certain assets and the
taxation of acquisitions and disposals. Ultimately, the results of these challenges could require us to pay additional taxes and could also require the payment of interest assessments. We accrue a liability when we believe an assessment is probable.

Financial Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement
No. 109, Accounting for Income Taxes became effective for Cox Radio on January 1, 2007. FIN 48 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest benefit that is
greater than 50 percent likely of being realized upon ultimate settlement. The cumulative effect of applying FIN 48 is to be reported as an adjustment to the opening balance of retained earnings in the year of adoption. We are currently
finalizing our evaluation of the impact of adoption and have not yet determined the effect on our financial position or results of operations.

During 2006, we received a $3.7 million refund related to the conclusion of a federal income tax audit for the 2002-2003 tax years. Adjustments made during federal income tax audits for the 1998-2001 tax years gave rise to this refund.
There was no material income statement impact in the current year. The Internal Revenue Service has initiated a field examination for tax periods 2004 and 2005. Additionally, in connection with the conclusion of several state audits during 2006, we
paid $2.7 million and recorded a corresponding reduction to income tax expense of $6.1 million.

During 2004 and 2005, in connection with
the conclusion of federal income tax audits for the years 1998  2001, we paid approximately $27.1 million in taxes related to certain radio station transactions completed during the audit period. We had previously provided for the possibility
of this outcome. As a result of the audit, a reclassification between current and deferred tax liability and expense was made during 2004.

Results of
Operations

This discussion should be read in conjunction with our accompanying audited consolidated financial statements and notes
thereto. Results of operations represent the operations of the radio stations owned or operated by us, or for which we provide sales and marketing services, during the applicable periods.

Year Ended December 31, 2006 Compared with Year Ended December 31, 2005



|                   |  |                        |         |                  |   |          |  |   |          |   |  |      |   
|------------------ |  | ---------------------- | ------- | ---------------- | - | -------- |  | - | -------- | - |  | ---- | --
|                   |  | December 31,2006       |         | December 31,2005 |   | $ Change |  |   | % Change |  
|                   |  | (Amounts in thousands) |         |                  |   |         
|Net revenues:      |  |                        |         |                  |   |          |  |   |          |   |  |      |   
|Local              |  | $                      | 308,279 |                  | $ | 311,477  |  | $ | (3,198   | ) |  | (1.0 | %)
|National           |  |                        | 98,030  |                  |   | 95,910   |  |   | 2,120    |   |  | 2.2  | % 
|Other              |  |                        | 34,159  |                  |   | 30,543   |  |   | 3,616    |   |  | 11.8 | % 
|                   |  |                        |         |                  |   |          |  |   |          |   |  |      |   
|Total net revenues |  | $                      | 440,468 |                  | $ | 437,930  |  | $ | 2,538    |   |  | 0.6  | % 
|                   |  |                        |         |                  |   |          |  |   |          |   |  |      |   

Net revenues are gross revenues less agency commissions. Local revenues are comprised of
advertising sales made within a stations local market or region either directly with the advertiser or through the advertisers agency. National revenues represent sales made to advertisers or agencies who are purchasing advertising for
multiple markets; these sales are typically facilitated by our national representation firm, which serves as our sales agent in these transactions. Other revenues are comprised of Internet revenues, syndicated radio program revenues, network
revenues and revenues from community events and sponsorships.

Net revenues for 2006 were $440.5 million, up 0.6% from 2005. Local revenues
decreased 1.0% and national revenues increased 2.2%, each as compared to 2005. Other revenues increased 11.8% compared to 2005, primarily due to a 49.4% increase in Internet revenues during that same period. Our stations in Orlando, Tampa, Southern
Connecticut and Tulsa delivered solid growth during 2006. Those increases were offset by results for our stations in Richmond, Dayton and Louisville, where revenues were down for the year. Revenues in Atlanta, our largest market, were up 0.3% in
2006 as compared to 2005.



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##### Table of Contents

|                                                                          |  |                        |        |                  |        |          |   |          |  |     |  
|------------------------------------------------------------------------- |  | ---------------------- | ------ | ---------------- | ------ | -------- | - | -------- |  | --- | -
|                                                                          |  | December 31,2006       |        | December 31,2005 |        | $ Change |   | % Change | 
|                                                                          |  | (Amounts in thousands) |        |                  |       
|Cost of services (exclusive of depreciation and amortization shown below) |  | $                      | 86,440 |                  | 86,252 |          | $ | 188      |  | 0.2 | %

Cost of services is comprised of expenses incurred by our technical, news and programming
departments. Cost of services increased $0.2 million to $86.4 million, an increase of 0.2% as compared to 2005. For the year ended 2006, lower broadcast program rights related to our decision not to renew the Atlanta Hawks broadcasting agreement for
the 2005-2006 season were more than offset by increased programming and technical expenses, including an increase in programming salaries and research costs.



|                                             |  |                        |         |                  |   |          |  |          |       |  |     |  
|-------------------------------------------- |  | ---------------------- | ------- | ---------------- | - | -------- |  | -------- | ----- |  | --- | -
|                                             |  | December 31,2006       |         | December 31,2005 |   | $ Change |  | % Change |      
|                                             |  | (Amounts in thousands) |         |                  |  
|Selling, general and administrative expenses |  | $                      | 171,366 |                  | $ | 169,817  |  | $        | 1,549 |  | 0.9 | %

Selling, general and administrative expenses are comprised of expenses incurred by our sales,
promotion and general and administrative departments. Selling, general and administrative expenses increased $1.5 million to $171.4 million, or 0.9%, compared to 2005. This increase was primarily attributable to additional expenses related to
performance units and stock-based compensation awarded to employees in our sales, promotion and general and administrative departments under the LTIP in the first quarter of 2006.



|                                              |  |                        |         |                  |   |        |          |  |   |          |   |  |      |   
|--------------------------------------------- |  | ---------------------- | ------- | ---------------- | - | ------ | -------- |  | - | -------- | - |  | ---- | --
|                                              |  | December 31,2006       |         | December 31,2005 |   |        | $ Change |  |   | % Change |  
|                                              |  | (Amounts in thousands) |         |                  |   |       
|Corporate general and administrative expenses |  | $                      | 19,869  |                  | $ | 19,439 |          |  | $ | 430      |   |  | 2.2  | % 
|Depreciation and amortization                 |  |                        | 11,195  |                  |   | 11,245 |          |  |   | (50      | ) |  | (0.4 | )%
|Impairment of intangible assets               |  |                        | 176,333 |                  |   | 14,351 |          |  |   | 161,982  |   |  | *    |   
|Other operating expenses, net                 |  |                        | 794     |                  |   | (13    | )        |  |   | 807      |   |  | *    |   
|                                              |  |                        |         |                  |   |        |          |  |   |          |   |  |      |   

---

|* | Change was not statistically meaningful.
|- | ----------------------------------------

Corporate
general and administrative expenses increased $0.4 million to $19.9 million, an increase of 2.2% as compared to 2005, as a result of additional compensation expense related to performance units and stock-based compensation awarded to corporate
personnel under the LTIP in the first quarter of 2006.

During the fourth quarter of 2006, we recorded a $176.3 million impairment charge
for the write-off of intangible assets in accordance with SFAS No. 142. This non-cash write-down reflects charges to reduce the carrying value of intangible assets in our Birmingham, Greenville, Houston, Louisville and Richmond markets to their
fair market values.

During the fourth quarter of 2005, we recorded a $14.4 million impairment charge for the write-off of goodwill in
accordance with SFAS No. 142. This $14.4 million non-cash write-down reflects charges to reduce the carrying value of goodwill for the Birmingham market to its fair market value.

The changes in depreciation and amortization or other operating expenses, net were not material to our overall operating results or financial condition.



|                        |  |                        |         |   |                  |   |          |  |   |          |   |  |        |   
|----------------------- |  | ---------------------- | ------- | - | ---------------- | - | -------- |  | - | -------- | - |  | ------ | --
|                        |  | December 31,2006       |         |   | December 31,2005 |   | $ Change |  |   | % Change |  
|                        |  | (Amounts in thousands) |         |   |                  |  
|Operating (loss) income |  | $                      | (25,529 | ) |                  | $ | 136,839  |  | $ | (162,368 | ) |  | (118.7 | )%

Our operating loss for 2006 was $25.5 million, a decrease of $162.4 million compared to 2005, due
to the $176.3 million non-cash write-down of impaired intangible assets discussed above.



|                 |  |                        |        |                  |   |          |  |   |          |   |  |      |   
|---------------- |  | ---------------------- | ------ | ---------------- | - | -------- |  | - | -------- | - |  | ---- | --
|                 |  | December 31,2006       |        | December 31,2005 |   | $ Change |  |   | % Change |  
|                 |  | (Amounts in thousands) |        |                  |   |         
|Interest expense |  | $                      | 25,345 |                  | $ | 27,444   |  | $ | (2,099   | ) |  | (7.6 | )%

Interest expense during 2006 totaled $25.3 million, as compared to $27.4 million for 2005. This
decrease was the result of lower overall outstanding debt and a slightly lower overall average borrowing rate due to the repayment at maturity of the $100.0 million principal amount of our 6.375% notes in May 2005 and the repayment at maturity of
the $250.0 million principal amount of our 6.625% notes in February 2006. Both series of notes were repaid with proceeds from our revolving credit facility. The average rate on our credit facility was 5.9% during 2006 and 4.2% during 2005.



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##### Table of Contents

|                   |  |                        |         |   |                  |   |          |  |   |          |   |  |        |   
|------------------ |  | ---------------------- | ------- | - | ---------------- | - | -------- |  | - | -------- | - |  | ------ | --
|                   |  | December 31,2006       |         |   | December 31,2005 |   | $ Change |  |   | % Change |  
|                   |  | (Amounts in thousands) |         |   |                  |  
|Income taxes:      |  |                        |         |   |                  |   |          |  |   |          |   |  |        |   
|Current            |  | $                      | 25,535  |   |                  | $ | 27,435   |  | $ | (1,900   | ) |  | (6.9   | %)
|Deferred           |  |                        | (51,960 | ) |                  |   | 20,648   |  |   | (72,608  | ) |  | (351.6 | %)
|                   |  |                        |         |   |                  |   |          |  |   |          |   |  |        |   
|Total income taxes |  | $                      | (26,425 | ) |                  | $ | 48,083   |  | $ | (74,508  | ) |  | (155.0 | %)
|                   |  |                        |         |   |                  |   |          |  |   |          |   |  |        |   

Income tax decreased $74.5 million to a $26.4 million benefit in 2006. The change in income tax
expense was primarily attributable to a $67.1 million deferred income tax benefit resulting from the impairment of intangible assets discussed above, as well as changes in certain state effective tax rates and adjustments for the actual or expected
resolution of certain income tax audits. Our effective tax rates for 2006 and 2005 were 51.9% and 44.0%, respectively.



|                  |  |                        |         |   |                  |   |          |  |   |          |   |  |        |   
|----------------- |  | ---------------------- | ------- | - | ---------------- | - | -------- |  | - | -------- | - |  | ------ | --
|                  |  | December 31,2006       |         |   | December 31,2005 |   | $ Change |  |   | % Change |  
|                  |  | (Amounts in thousands) |         |   |                  |  
|Net (loss) income |  | $                      | (24,447 | ) |                  | $ | 61,273   |  | $ | (85,720  | ) |  | (139.9 | %)

Our net loss for 2006 was $24.4 million, compared to net income of $61.3 million for 2005, for the
reasons discussed above.

Year Ended December 31, 2005 Compared with Year Ended December 31, 2004



|                   |  |                        |         |                  |   |          |  |   |          |   |  |      |   
|------------------ |  | ---------------------- | ------- | ---------------- | - | -------- |  | - | -------- | - |  | ---- | --
|                   |  | December 31,2005       |         | December 31,2004 |   | $ Change |  |   | % Change |  
|                   |  | (Amounts in thousands) |         |                  |   |         
|Net revenues:      |  |                        |         |                  |   |          |  |   |          |   |  |      |   
|Local              |  | $                      | 311,477 |                  | $ | 310,595  |  | $ | 882      |   |  | 0.3  | % 
|National           |  |                        | 95,910  |                  |   | 98,417   |  |   | (2,507   | ) |  | (2.5 | %)
|Other              |  |                        | 30,543  |                  |   | 29,201   |  |   | 1,342    |   |  | 4.6  | % 
|                   |  |                        |         |                  |   |          |  |   |          |   |  |      |   
|Total net revenues |  | $                      | 437,930 |                  | $ | 438,213  |  | $ | (283     | ) |  | (0.1 | %)
|                   |  |                        |         |                  |   |          |  |   |          |   |  |      |   

Net revenues for 2005 decreased $0.3 million to $437.9 million, a 0.1% decrease compared to 2004.
Local revenues increased 0.3% while national revenues decreased 2.5% as compared to 2004. Our stations in Miami, Tampa, and San Antonio delivered solid growth during 2005. The revenue growth at these stations, however, was offset by results for our
stations in Atlanta, Richmond, Birmingham and Louisville where revenues were down for the year. In Atlanta, net revenues were down 6.7% for the year primarily as a result of the discontinuation of the Atlanta Braves broadcasting agreement in 2004.



|                                                                          |  |                        |        |                  |   |          |  |   |          |   |  |       |   
|------------------------------------------------------------------------- |  | ---------------------- | ------ | ---------------- | - | -------- |  | - | -------- | - |  | ----- | --
|                                                                          |  | December 31,2005       |        | December 31,2004 |   | $ Change |  |   | % Change |  
|                                                                          |  | (Amounts in thousands) |        |                  |   |         
|Cost of services (exclusive of depreciation and amortization shown below) |  | $                      | 86,252 |                  | $ | 98,219   |  | $ | (11,967  | ) |  | (12.2 | %)

As compared to 2004, cost of services decreased $12.0 million, or 12.2%, primarily due to the
discontinuation of the Atlanta Braves broadcasting agreement, which included costs of $13.2 million in 2004.



|                                             |  |                        |         |                  |   |          |  |          |       |  |     |  
|-------------------------------------------- |  | ---------------------- | ------- | ---------------- | - | -------- |  | -------- | ----- |  | --- | -
|                                             |  | December 31,2005       |         | December 31,2004 |   | $ Change |  | % Change |      
|                                             |  | (Amounts in thousands) |         |                  |  
|Selling, general and administrative expenses |  | $                      | 169,817 |                  | $ | 162,617  |  | $        | 7,200 |  | 4.4 | %

Selling, general and administrative expenses increased $7.2 million to $169.8 million, or 4.4%
compared to the prior year. This increase was primarily a result of additional compensation expense related to performance units awarded to employees in our sales, promotion and general and administrative departments under the LTIP in the first
quarter of 2005.



|                                              |  |                        |        |   |                  |   |          |  |   |          |   |  |       |   
|--------------------------------------------- |  | ---------------------- | ------ | - | ---------------- | - | -------- |  | - | -------- | - |  | ----- | --
|                                              |  | December 31,2005       |        |   | December 31,2004 |   | $ Change |  |   | % Change |  
|                                              |  | (Amounts in thousands) |        |   |                  |  
|Corporate general and administrative expenses |  | $                      | 19,439 |   |                  | $ | 17,676   |  | $ | 1,763    |   |  | 10.0  | % 
|Depreciation and amortization                 |  |                        | 11,245 |   |                  |   | 11,867   |  |   | (622     | ) |  | (5.2  | %)
|(Gain) Loss on loan guarantee                 |  |                        | (138   | ) |                  |   | 3,064    |  |   | (3,202   | ) |  | *     |   
|Impairment of intangible assets               |  |                        | 14,351 |   |                  |   |         |  |   | 14,351   |   |  | *     |   
|Other operating expenses, net                 |  |                        | 125    |   |                  |   | 1,093    |  |   | (968     | ) |  | (88.6 | %)

---

|* | Change was not statistically meaningful.
|- | ----------------------------------------



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##### Table of Contents

Corporate general and administrative expenses increased $1.8 million to $19.4 million, or 10.0% compared
to 2004, primarily as a result of additional compensation expense related to the issuance of performance units awarded to corporate personnel under the LTIP in the first quarter of 2005 and increased personnel and training costs.

On October 31, 2005, our Compensation Committee approved the acceleration of the vesting of all unvested stock options granted under the LTIP from
January 2001 through October 31, 2005. Unvested stock option awards with respect to approximately 4.7 million shares of Class A common stock were subject to this vesting acceleration. However, the Compensation Committee left the
exercise date and all other option terms unchanged. The purpose of accelerating the vesting of these options was to allow us to avoid recognition of compensation expense associated with these options in future periods as the exercise prices exceeded
the market value of the underlying stock on October 31, 2005. Incremental pre-tax expense of $12.1 million associated with the acceleration is reflected in the pro forma disclosure included in Note 2 to our consolidated financial statements.

During the third quarter of 2004, we recorded an accrual of $3.1 million related to an estimated loss on the Honolulu Broadcasting loan
guarantee. In January 2005, the loan guarantee was terminated, and we recorded amounts recovered on the loan guarantee of $0.1 million.

During the fourth quarter of 2005, we recorded a $14.4 million impairment charge for the write-off of goodwill in accordance with SFAS No. 142. This $14.4 million non-cash write-down reflects charges to reduce the carrying value of
goodwill for the Birmingham market to its fair market value.

The changes in depreciation and amortization or other operating expenses, net
were not material to our overall operating results or financial condition.



|                 |  |                        |         |                  |   |          |  |   |          |   |  |      |   
|---------------- |  | ---------------------- | ------- | ---------------- | - | -------- |  | - | -------- | - |  | ---- | --
|                 |  | December 31,2005       |         | December 31,2004 |   | $ Change |  |   | % Change |  
|                 |  | (Amounts in thousands) |         |                  |   |         
|Operating income |  | $                      | 136,839 |                  | $ | 143,677  |  | $ | (6,838   | ) |  | (4.8 | %)

Operating income for the year was $136.8 million, a decrease of $6.8 million compared to 2004, for
the reasons discussed above.



|                 |  |                        |        |                  |   |          |  |   |          |   |  |      |   
|---------------- |  | ---------------------- | ------ | ---------------- | - | -------- |  | - | -------- | - |  | ---- | --
|                 |  | December 31,2005       |        | December 31,2004 |   | $ Change |  |   | % Change |  
|                 |  | (Amounts in thousands) |        |                  |   |         
|Interest expense |  | $                      | 27,444 |                  | $ | 30,388   |  | $ | (2,944   | ) |  | (9.7 | %)

Interest expense during 2005 totaled $27.4 million, compared to $30.4 million for 2004. This
decrease was the result of lower overall outstanding debt, as well as a lower overall average borrowing rate due to the repayment in May 2005 at maturity of the $100.0 million principal amount of our 6.375% notes with proceeds from our five-year
revolving credit facility. The average interest rate on our credit facility was 4.2% during 2005 and 2.1% during 2004.



|                   |  |                        |        |                  |   |        |          |  |   |          |   |  |       |   
|------------------ |  | ---------------------- | ------ | ---------------- | - | ------ | -------- |  | - | -------- | - |  | ----- | --
|                   |  | December 31,2005       |        | December 31,2004 |   |        | $ Change |  |   | % Change |  
|                   |  | (Amounts in thousands) |        |                  |   |       
|Income taxes:      |  |                        |        |                  |   |        |          |  |   |          |   |  |       |   
|Current            |  | $                      | 27,435 |                  | $ | 45,772 |          |  | $ | (18,337  | ) |  | (40.1 | %)
|Deferred           |  |                        | 20,648 |                  |   | (836   | )        |  |   | 21,484   |   |  | *     |   
|                   |  |                        |        |                  |   |        |          |  |   |          |   |  |       |   
|Total income taxes |  | $                      | 48,083 |                  | $ | 44,936 |          |  | $ | 3,147    |   |  | 7.0   | % 
|                   |  |                        |        |                  |   |        |          |  |   |          |   |  |       |   

---

|* | Change was not statistically meaningful.
|- | ----------------------------------------

Income
tax expense increased approximately $3.1 million to $48.1 million in 2005. The increase in income tax expense was primarily attributable to the decrease in pre-tax income, offset by the nondeductible component of impaired goodwill. In connection
with the conclusion of federal income tax audits for the years 1998  2001, we paid approximately $27.1 million in taxes related to certain radio station transactions completed during the audit period. We had previously provided for the
possibility of this outcome. As a result of the audit, a reclassification between current and deferred tax liability and expense was made during 2004. Our effective tax rates for 2005 and 2004 were 44.0% and 39.8%, respectively.



|           |  |                        |        |                  |   |          |  |   |          |   |  |      |   
|---------- |  | ---------------------- | ------ | ---------------- | - | -------- |  | - | -------- | - |  | ---- | --
|           |  | December 31,2005       |        | December 31,2004 |   | $ Change |  |   | % Change |  
|           |  | (Amounts in thousands) |        |                  |   |         
|Net income |  | $                      | 61,273 |                  | $ | 67,966   |  | $ | (6,693   | ) |  | (9.8 | %)

Net income for 2005 was $61.3 million, compared to $68.0 million for 2004 for the reasons
discussed above.



27



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##### Table of Contents

Liquidity and Capital Resources

Sources and Uses of Liquidity

Primary sources of liquidity are cash provided by operations and cash
borrowed under our bank credit facility. In comparing 2006 to 2005, net cash provided by operating activities decreased $4.4 million primarily due to changes in working capital. In comparing 2005 to 2004, net cash provided by operating activities
increased $38.8 million primarily due to changes in working capital and to a $25.6 million income tax payment made in the prior year. This payment was made in connection with the conclusion of federal income tax audits for the years 1998 
2001, which resulted in total payments of $27.1 million (See Note 8 to the consolidated financial statements for further discussion).

Primary uses of liquidity include debt service (as discussed below), acquisitions, capital expenditures, stock repurchases and investment in signal upgrades. The following table summarizes our primary uses of cash for the past three years:



|                                   |  |                        |        |      |   |        |  |   |      
|---------------------------------- |  | ---------------------- | ------ | ---- | - | ------ |  | - | -----
|                                   |  | 2006                   |        | 2005 |   | 2004  
|                                   |  | (Amounts in thousands)
|Acquisitions                       |  | $                      | 7,688  |      | $ | 4,000  |  | $ | 681  
|Option to purchase radio stations  |  |                        | 5,000  |      |   | 2,000  |  |   |     
|Capital expenditures               |  |                        | 11,537 |      |   | 10,964 |  |   | 9,019
|Investment in signal upgrades      |  |                        | 5,631  |      |   | 2,127  |  |   | 7,680
|Repurchase of Class A common stock |  |                        | 45,227 |      |   | 39,620 |  |   |     

We have an effective shelf registration statement under which we may from time to time offer and
issue debentures, notes, bonds and other indebtedness and forward contracts in respect of any such indebtedness, shares of preferred stock, shares of Class A common stock, warrants, stock purchase contracts, stock purchase units and stock
purchase rights, and two financing trusts sponsored by us may also offer and issue preferred securities of the trusts for an original maximum aggregate offering amount of $300 million. Unless otherwise described in future prospectus supplements, we
intend to use the net proceeds from the sale of securities registered under this universal shelf registration statement for general corporate purposes, which may include additions to working capital, the repayment or redemption of existing
indebtedness and the financing of capital expenditures and acquisitions.

In addition, daily cash management needs have been funded through
intercompany advances from Cox Enterprises. Any borrowings from Cox Enterprises are due on demand, but typically repaid within 30 days. Cox Enterprises continues to perform day-to-day cash management services for us. Amounts due to and from Cox
Enterprises accrue interest at Cox Enterprises current commercial paper borrowing rate or a London Interbank Offered Rate (LIBOR) based rate (5.6% and 4.7% at December 31, 2006 and 2005, respectively), dependent upon our credit rating.
Cox Enterprises owed us approximately $2.0 million at December 31, 2006 and we owed Cox Enterprises approximately $9.9 million at December 31, 2005.

In September 2006, we consummated the acquisition of WOKV-FM (formerly WBGB-FM) serving the Jacksonville, Florida market for a purchase price of approximately $7.7 million. We funded the acquisition with cash on hand
and borrowings under our credit facility. The purchase price was allocated substantially to FCC licenses.

In January 2005, we paid $2
million for an option to purchase five radio stations for $60 million. For more information regarding this option, see Item 1. BusinessAcquisitions and Dispositions. We have sufficient capacity under our revolving credit facility
to pay the remaining purchase price for the stations.

Our future cash requirements are expected to include capital expenditures, principal
and interest payments on indebtedness and funds for acquisitions. We expect our operations to generate sufficient cash to meet our capital expenditure and debt service requirements. We expect capital expenditures to be between $12 million and $13
million for 2007. Additional cash requirements, including funds for acquisitions, will be funded from various sources, including proceeds from bank financing, intercompany advances from Cox Enterprises and, if or when appropriate, issuances of
securities.

Debt Service

On July 26, 2006, we replaced our then-existing credit facility with a new senior unsecured revolving credit facility with up to $600 million in total borrowing capacity. On July 26, 2006, we borrowed $420 million under the new
credit facility, of which $410 million was used to repay amounts outstanding under our old credit facility. As a result of our business operations, we may generate excess cash which, from time to time, is used to repay amounts outstanding under the
new revolving credit facility. The lending commitments under the new credit facility are scheduled to terminate on July 26, 2011. The interest rate for the new facility is, at our option:



| |  |  | the greater of the prime rate or the federal funds borrowing rate plus 0.5%;
| | - |  | ----------------------------------------------------------------------------



28



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| |  |  | LIBOR plus a spread based on the credit ratings of our senior long-term debt;
| | - |  | -----------------------------------------------------------------------------



| |  |  | the federal funds borrowing rate plus a spread based on the credit ratings of our senior long-term debt.
| | - |  | --------------------------------------------------------------------------------------------------------

The new credit facility includes commitment fees on the unused portion of the total amount available, which fees range from 0.070% to 0.225% depending on
the credit rating of our senior long-term debt. The new credit facility contains, among other provisions, specified leverage and interest coverage requirements, the terms of which are defined within the credit facility. At December 31, 2006, we
were in compliance with these covenants. The credit facility also contains customary events of default, including, but not limited to, failure to pay principal or interest, failure to pay or acceleration of other material debt, misrepresentation or
breach of warranty, violation of certain covenants and change of control.

At December 31, 2006, we had $380 million of outstanding
indebtedness under the new credit facility with $220 million available for borrowing. The interest rate applied to amounts due under the new credit facility was 6.0% at December 31, 2006. At December 31, 2005, we had approximately $155
million of outstanding indebtedness under the old facility with $345 million available. The interest rate applied to amounts due under the old credit facility was 5.1% at December 31, 2005. Since the interest rate was variable, the
recorded balance of the credit facilities approximates fair value. See Note 10 to the Consolidated Financial Statements for a discussion of our interest rate swap agreement.

In February 2006, we repaid the $250.0 million principal amount of our 6.625% notes at maturity using funds from our revolving credit facility.

In May 2005, we repaid the $100.0 million principal amount of our 6.375% notes at maturity using funds from our revolving credit facility.

Off-Balance Sheet Arrangements

Our
off-balance sheet arrangements consist primarily of lease commitments and contracts for sports programming and on-air personalities and the guarantee discussed below. We do not have any majority-owned subsidiaries that are not included in our
consolidated financial statements, nor do we have any interests in or relationships with any variable interest entities.

In February 2005,
we agreed to guarantee the borrowings of a third party of up to $5 million to enable that party to purchase two stations and assist us in a signal upgrade project for one of our stations. This guarantee expires in February 2008. If the signal
upgrade is approved by the FCC, then we are likely to purchase the stations and performance under the guarantee will not be necessary. If the signal upgrade is not approved, our guarantee will be extinguished either through sale of the stations or
through new financing arranged by the owner of the stations. We believe that while the value of the stations currently may be insufficient to repay the outstanding debt in full, any shortfall would be immaterial. At both December 31, 2006 and
2005, the carrying value of this guarantee was $0.4 million.

Summary Disclosures about Contractual Obligations

We also have various commitments under the following types of contracts: non-cancelable operating leases; capital leases; long-term debt; interest
payments on long-term debt; and other purchase commitments, including contracts for sports programming and on-air personalities. The aggregate minimum annual commitments associated with these contracts as of December 31, 2006 were as follows:



|                              |  |                        |         |      |   |               |  |               |        |            |   |         |  |   |       
|----------------------------- |  | ---------------------- | ------- | ---- | - | ------------- |  | ------------- | ------ | ---------- | - | ------- |  | - | ------
|                              |  | Payments Due by Period
|                              |  | Total                  |         | 2007 |   | 2008 and 2009 |  | 2010 and 2011 |        | After 2011
|                              |  | (Amounts in thousands)
|Operating leases              |  | $                      | 40,410  |      | $ | 6,774         |  | $             | 11,109 |            | $ | 8,356   |  | $ | 14,171
|Capital leases                |  |                        | 300     |      |   | 114           |  |               | 146    |            |   | 40      |  |   |      
|Long-term debt(1)             |  |                        | 380,000 |      |   |              |  |               |       |            |   | 380,000 |  |   |      
|Interest on long-term debt(2) |  |                        | 67,031  |      |   | 22,991        |  |               | 36,619 |            |   | 7,421   |  |   |      
|Purchase commitments          |  |                        | 90,493  |      |   | 48,029        |  |               | 35,325 |            |   | 5,674   |  |   | 1,465 
|                              |  |                        |         |      |   |               |  |               |        |            |   |         |  |   |       
|Total                         |  | $                      | 578,234 |      | $ | 77,908        |  | $             | 83,199 |            | $ | 401,491 |  | $ | 15,636
|                              |  |                        |         |      |   |               |  |               |        |            |   |         |  |   |       

---

|(1) | Consists of $380 million outstanding at December 31, 2006 under our credit facility and assumes this facility will be repaid and not refinanced at or prior to expiration in
2011.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | These amounts represent estimated future cash interest payments related to our credit facility based on the variable rate specified under our credit agreement, including the impact
of our interest rate swap agreement. Future interest payments could differ materially from amounts indicated in the table due to future operational and financing needs, market factors and other currently unanticipated events.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Impact of Inflation

The impact of inflation on our operations has not been significant to date. However, there can be no assurance that a high rate of inflation in the future would not have an adverse impact on our operating results.

Transactions with Affiliated Companies

We receive certain management services from, and have entered into certain transactions with, Cox Enterprises. Costs of the management services that are allocated to us are based on actual direct costs incurred or on Cox Enterprises
estimate of expenses relative to the management services provided to other subsidiaries of Cox Enterprises. We believe that these allocations were made on a reasonable basis, and that receiving these management services from Cox Enterprises creates
cost efficiencies; however, there has been no study or any attempt to obtain quotes from third parties to determine what the cost of obtaining such services from third parties would have been. The services and transactions described below have been
reviewed by our Audit Committee, which has determined that such services and transactions are fair and in our best interest.

We receive
day-to-day cash management services from Cox Enterprises, with settlements of outstanding balances between us and Cox Enterprises occurring periodically at market interest rates. As a part of these services, Cox Enterprises transfers funds to cover
our checks presented for payment and we record a book overdraft, which is classified as accounts payable in the accompanying balance sheets. Book overdrafts of $4.1 million and $5.4 million existed at December 31, 2006 and 2005, respectively,
as a result of our checks outstanding. The amounts due to or from Cox Enterprises are generally due on demand and represent the net balance of the intercompany transactions. The rate charged on intercompany borrowing is defined as Cox
Enterprises current commercial paper borrowing rate or a LIBOR based rate (5.6% and 4.7% at December 31, 2006 and 2005, respectively), dependent upon our credit rating. Cox Enterprises owed us $2.0 million at December 31, 2006 and we
owed Cox Enterprises approximately $9.9 million at December 31, 2005.

We receive certain management services from Cox Enterprises and
its wholly-owned subsidiary, Cox Broadcasting, including management and financial advisory services, legal, corporate, secretarial, tax, internal audit, risk management, purchasing and materials management, employee benefit (including pension plan)
administration, fleet, engineering and other support services. Expenses allocated for these services are included in corporate general and administrative expenses in the consolidated financial statements. We were allocated expenses for the years
ended December 31, 2006, 2005 and 2004 of approximately $3.2 million, $3.3 million and $3.4 million, respectively, related to these services.

In connection with these management services, we reimburse Cox Enterprises for payments made to third-party vendors for certain goods and services provided to us under arrangements made by Cox Enterprises on behalf of Cox Enterprises and
its affiliates, including Cox Radio. We believe such arrangements allow us to receive such goods and services at more attractive pricing than we would be able to secure separately. Such reimbursed expenditures include insurance premiums for coverage
through Cox Enterprises insurance program, which provides coverage for all of its affiliates, including Cox Radio. Rather than self-insuring these risks, Cox Enterprises purchases insurance for a fixed-premium cost from several insurance
companies, including an insurance company indirectly owned by descendants of Governor James M. Cox, the founder of Cox Enterprises, including James C. Kennedy, Chairman of our board of directors, and his sister, who each own 25%. This insurance
company is an insurer and re-insurer on various insurance policies purchased by Cox Enterprises, and it employs an independent consulting actuary to calculate the annual premiums for general/auto liability and workers compensation insurance based on
our loss experience consistent with insurance industry practice. Our portion of these insurance costs was approximately $0.7 million, $0.6 million and $0.5 million for the years ended December 31, 2006, 2005 and 2004, respectively.

Our employees participate in certain Cox Enterprises employee benefit plans, and we made payments to Cox Enterprises in 2006 for the costs incurred
because of such participation, including self-insured employee medical insurance costs of approximately $10.5 million, retiree medical payments of approximately $0.1 million, postemployment benefits of approximately $0.7 million and executive
pension plan payments of approximately $1.1 million. Costs incurred for these items in 2005 and 2004 were self-insured employee medical insurance costs of approximately $9.3 million and $9.0 million, respectively; retiree medical payments of
approximately $0.1 million and $0.1 million, respectively; postemployment benefits of approximately $0.7 million and $0.6 million, respectively; and executive pension plan payments of approximately $1.2 million and $1.1 million, respectively.

Our headquarters building is leased by Cox Enterprises from a partnership that in turn is indirectly owned by descendents of Governor
James M. Cox, the founder of Cox Enterprises, with an indirect 36% interest held in the aggregate by the children of James C. Kennedy, Chairman of our board of directors, and an indirect less than 3% interest held in the aggregate by
Mr. Kennedy, his mother and his sister. We pay rent and certain other occupancy costs to Cox Enterprises for space in Cox Enterprises corporate headquarters building. Rent and occupancy expense is allocated based on occupied space.
Related rent and occupancy expense was approximately $0.8 million, $0.7 million and $0.6 million for the years ended December 31, 2006, 2005 and 2004, respectively.



30



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Cox Search, Inc., a wholly-owned subsidiary of Cox Enterprises, from time to time purchases radio
advertising from our Atlanta radio stations at regular commercial rates. For the years ended December 31, 2006 and 2005 the amount purchased was $0.6 million and $0.3 million, respectively.

We have entered into lease agreements with Cox Broadcasting with respect to studio and tower site properties in Atlanta, Georgia, Dayton, Ohio and
Orlando, Florida that are used for our radio operations in those markets. The annual rental cost in the aggregate was approximately $0.7 million, $0.7 million and $0.6 million for the years ended December 31, 2006, 2005 and 2004, respectively.

Included in the amounts due from (to) Cox Enterprises are the following transactions:



|                                                     |  |                        |          |  
|---------------------------------------------------- |  | ---------------------- | -------- | -
|                                                     |  | (Amounts in thousands) |         
|                                                     | 
|Due from Cox Enterprises, December 31, 2003          |  | $                      | 6,284    |  
|                                                     |  |                        |          |  
|Cash transferred to Cox Enterprises                  |  |                        | 419,590  |  
|Acquisitions                                         |  |                        | (681     | )
|Payments on revolver                                 |  |                        | (60,000  | )
|Net operating expense allocations and reimbursements |  |                        | (358,620 | )
|                                                     |  |                        |          |  
|Due from Cox Enterprises, December 31, 2004          |  |                        | 6,573    |  
|                                                     |  |                        |          |  
|Cash transferred to Cox Enterprises                  |  |                        | 440,431  |  
|Acquisitions                                         |  |                        | (4,000   | )
|Borrowings on revolver                               |  |                        | 30,000   |  
|Repayment of 6.375% notes                            |  |                        | (100,000 | )
|Repurchase of Class A common stock                   |  |                        | (39,620  | )
|Net operating expense allocations and reimbursements |  |                        | (343,282 | )
|                                                     |  |                        |          |  
|Due to Cox Enterprises, December 31, 2005            |  |                        | (9,898   | )
|                                                     |  |                        |          |  
|Cash transferred to Cox Enterprises                  |  |                        | 433,612  |  
|Acquisitions                                         |  |                        | (7,688   | )
|Borrowings on revolver                               |  |                        | 225,000  |  
|Repayment of 6.625% notes                            |  |                        | (250,000 | )
|Repurchase of Class A common stock                   |  |                        | (45,227  | )
|Net operating expense allocations and reimbursements |  |                        | (343,819 | )
|                                                     |  |                        |          |  
|Due from Cox Enterprises, December 31, 2006          |  | $                      | 1,980    |  
|                                                     |  |                        |          |  

We have estimated that the carrying value of advances approximates fair value, given the
short-term nature of these advances.

New Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (FASB) issued FIN 48, which became effective for Cox Radio on January 1, 2007. FIN 48 prescribes a recognition threshold and a measurement attribute for the
financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.
The amount recognized is measured as the largest benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The cumulative effect of applying FIN 48 is to be reported as an adjustment to the opening balance of
retained earnings in the year of adoption. We are currently finalizing our evaluation of the impact of adoption and have not yet determined the effect on our financial position or results of operations.

In September 2006, the SEC issued Staff Accounting Bulletin (SAB) No. 108, Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements. SAB No. 108 provides guidance on how the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a current year misstatement. The
SEC staff believes that registrants should quantify errors using both a balance sheet and an income statement approach and evaluate whether either approach results in quantifying a misstatement that, when all relevant quantitative and qualitative
factors are considered, is material. SAB No. 108 was effective for fiscal years ending on or after November 15, 2006. The implementation of SAB No. 108 did not have a material impact on our financial position, results of operations or
cash flows.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 provides enhanced
guidance for using fair value to measure assets and liabilities. The statement defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and expands disclosures about fair value
measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those years. The adoption of SFAS No. 157 is not expected to have a material impact on our financial position,
results of operations or cash flows.

In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans. SFAS No. 158 requires an employer to: (a) recognize in its statement of financial position an asset for a plans overfunded status or a liability for a plans underfunded
status; (b) measure a plans assets and its obligations that determine its funded status as of the end of the employers fiscal year, with limited exceptions; and (c) recognize changes in the funded status of a defined benefit
post-retirement plan in the year in which the changes occur as a component of comprehensive income. The adoption of SFAS No. 158 will not have a material impact on our financial position, results of operations or cash flows because we do not
sponsor a defined benefit plan.



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##### Table of Contents

|ITEM 7A. | Quantitative and Qualitative Disclosure About Market Risk
|-------- | ---------------------------------------------------------

We are exposed to a number
of financial market risks in the ordinary course of business. We have examined exposures to these risks and concluded that none of the exposures in these areas are material to cash flows or earnings; however, our primary financial market risk
exposure pertains to changes in interest rates.

We have engaged in several strategies to manage these market risks. We currently have one
interest rate swap agreement for purposes of managing borrowing costs.

Pursuant to this interest rate swap agreement, we have exchanged
our floating rate interest obligations on $25 million in notional principal amount of debt for a fixed annual interest rate of 6.4%. This agreement matures on September 30, 2007. Concurrently with the adoption of SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities, in January 2001, we formally designated this agreement as a cash flow hedge as discussed in Note 10 to the consolidated financial statements. We are exposed to a credit loss
in the event of nonperformance by the counterparty to the interest rate swap agreement. However, we do not anticipate nonperformance by such counterparty, and no material loss would be expected in the event of the counterpartys nonperformance.
The estimated fair value of this swap agreement, based on current market rates, approximated a net payable of $0.2 million and $0.7 million at December 31, 2006 and 2005, respectively. The fair value of the swap agreement at
December 31, 2006 is included in other current liabilities according to the maturity date of the swap. The market risk for the interest rate swap is mitigated as the variable rate received is hedged to the variable rate paid on the credit
facility.

The estimated fair values of debt instruments are based on discounted cash flow analyses using our borrowing rates for similar
types of borrowing arrangements and dealer quotations. The revolving credit facilities and Cox Enterprises borrowings bear interest based on current market rates and, thus, approximate fair value. We are exposed to interest rate volatility
with respect to these variable rate debt instruments. If the LIBOR borrowing rates were to increase 1% above the current rates at December 31, 2006, our interest expense on the revolving credit facility would increase approximately $3.8 million
on an annual basis, including any interest expense associated with the use of derivative rate hedging instruments as described above.

With
respect to the interest rate swap agreement, we have estimated its fair value using available market information and valuation methodologies that we believe to be appropriate. Considerable judgment, however, is required in interpreting market data
to develop the estimate of fair value. Accordingly, the estimate presented above is not necessarily indicative of the amount that we would realize or pay in a current market exchange.



|ITEM 8. | Financial Statements and Supplementary Data
|------- | -------------------------------------------

MANAGEMENT REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial
reporting. Pursuant to the rules and regulations of the SEC, internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of
directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles
and includes those policies and procedures that:



| |  |  | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect transactions and dispositions relating to our assets;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles
generally accepted in the United States, and that receipts and expenditures are being made only in accordance with authorizations of our management and board of directors; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material
effect on the financial statements.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Management has evaluated the effectiveness of its internal control over financial
reporting as of December 31, 2006 based on the control criteria established in a report entitled Internal ControlIntegrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such
evaluation, we have concluded that our internal control over financial reporting is effective as of December 31, 2006.



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The registered independent public accounting firm of Deloitte & Touche LLP, as auditors of our
consolidated financial statements, has issued an attestation report on managements assessment of our internal control over financial reporting, which report is included herein.



|                                      |  |                                           
|------------------------------------- |  | ------------------------------------------
|/s/ Robert F. Neil                    |  | /s/ Neil O. Johnston                      
|Robert F. Neil                        |  | Neil O. Johnston                          
|President and Chief Executive Officer |  | Vice President and Chief Financial Officer

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Cox Radio, Inc.:

We have audited managements assessment, included in the accompanying Management Report on Internal Control over Financial Reporting, that Cox Radio, Inc. and subsidiaries (the Company) maintained effective internal control
over financial reporting as of December 31, 2006, based on criteria established in Internal ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. The Companys
management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on
managements assessment and an opinion on the effectiveness of the Companys internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating managements assessment,
testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A companys internal control over financial reporting is a process designed by, or under the supervision of, the companys
principal executive and principal financial officers, or persons performing similar functions, and effected by the companys board of directors, management and other personnel to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors
of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to
future periods are subject to the risk that the controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, managements assessment that the Company maintained effective internal control over financial reporting as of December 31,
2006, is fairly stated, in all material respects, based on the criteria established in Internal ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the
Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on the criteria established in Internal ControlIntegrated Frameworkissued by the Committee of
Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of December 31, 2006 and 2005, the related consolidated statements of income, shareholders equity, and cash flows for each of the three years in
the period ended December 31, 2006, and the financial statement schedule listed in the Index at Item 15, and our report dated March 13, 2007 expressed an unqualified opinion on those financial statements and financial statement
schedule.



|                         
|-------------------------
|/s/ DELOITTE & TOUCHE LLP
|                         
|Atlanta, Georgia         
|March 13, 2007           



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Cox Radio, Inc.:

We have audited the accompanying consolidated balance sheets of Cox Radio, Inc. and subsidiaries (the Company) as of December 31, 2006 and 2005, and the related consolidated statements of income, shareholders equity,
and cash flows for each of the three years in the period ended December 31, 2006. Our audits also included the financial statement schedule listed in the Index at Item 15. These consolidated financial statements and financial
statement schedule are the responsibility of the Companys management. Our responsibility is to express an opinion on the consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2006 and 2005, and its results of operations and cash flows for each of the three years in the period ended December 31, 2006, in conformity with accounting principles generally accepted
in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information
set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the effectiveness of the Companys internal control over financial reporting as of December 31, 2006, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission, and our report dated March 13, 2007 expressed an unqualified opinion on managements assessment of the effectiveness of the Companys internal control over financial reporting and an
unqualified opinion on the effectiveness of the Companys internal control over financial reporting.



|                         
|-------------------------
|/s/ DELOITTE & TOUCHE LLP
|Atlanta, Georgia         
|March 13, 2007           



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COX RADIO, INC.

CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                                                           |  |                                           |           |   |      |   |           |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------- | --------- | - | ---- | - | --------- | -
|                                                                                                                                                                                                           |  | December 31,                              |          
|                                                                                                                                                                                                           |  | 2006                                      |           |   | 2005 |  
|                                                                                                                                                                                                           |  | (Amounts in thousands, except share data) |          
|ASSETS                                                                                                                                                                                                     |  |                                           |           |   |      |   |           |  
|Current assets:                                                                                                                                                                                            |  |                                           |           |   |      |   |           |  
|Cash and cash equivalents                                                                                                                                                                                  |  | $                                         | 4,381     |   |      | $ | 3,455     |  
|Accounts and notes receivable, less allowance for doubtful accounts of $2,983 and $3,190, respectively                                                                                                     |  |                                           | 85,660    |   |      |   | 83,388    |  
|Prepaid expenses and other current assets                                                                                                                                                                  |  |                                           | 5,254     |   |      |   | 6,026     |  
|Amounts due from Cox Enterprises                                                                                                                                                                           |  |                                           | 1,980     |   |      |   |          |  
|                                                                                                                                                                                                           |  |                                           |           |   |      |   |           |  
|Total current assets                                                                                                                                                                                       |  |                                           | 97,275    |   |      |   | 92,869    |  
|Property and equipment, net                                                                                                                                                                                |  |                                           | 74,334    |   |      |   | 74,025    |  
|FCC licenses and other intangible assets, net                                                                                                                                                              |  |                                           | 1,702,442 |   |      |   | 1,868,739 |  
|Goodwill                                                                                                                                                                                                   |  |                                           | 215,584   |   |      |   | 217,921   |  
|Other assets                                                                                                                                                                                               |  |                                           | 28,282    |   |      |   | 12,510    |  
|                                                                                                                                                                                                           |  |                                           |           |   |      |   |           |  
|Total assets                                                                                                                                                                                               |  | $                                         | 2,117,917 |   |      | $ | 2,266,064 |  
|                                                                                                                                                                                                           |  |                                           |           |   |      |   |           |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                                                       |  |                                           |           |   |      |   |           |  
|Current liabilities:                                                                                                                                                                                       |  |                                           |           |   |      |   |           |  
|Accounts payable and accrued expenses                                                                                                                                                                      |  | $                                         | 27,987    |   |      | $ | 26,664    |  
|Accrued salaries and wages                                                                                                                                                                                 |  |                                           | 2,507     |   |      |   | 2,699     |  
|Accrued interest                                                                                                                                                                                           |  |                                           | 1,195     |   |      |   | 6,969     |  
|Income taxes payable                                                                                                                                                                                       |  |                                           | 1,819     |   |      |   | 1,625     |  
|Amounts due to Cox Enterprises                                                                                                                                                                             |  |                                           |          |   |      |   | 9,898     |  
|Other current liabilities                                                                                                                                                                                  |  |                                           | 3,910     |   |      |   | 3,890     |  
|                                                                                                                                                                                                           |  |                                           |           |   |      |   |           |  
|Total current liabilities                                                                                                                                                                                  |  |                                           | 37,418    |   |      |   | 51,745    |  
|Long-term debt, less current portion                                                                                                                                                                       |  |                                           | 380,000   |   |      |   | 404,988   |  
|Deferred income taxes                                                                                                                                                                                      |  |                                           | 468,082   |   |      |   | 520,040   |  
|Other long-term liabilities                                                                                                                                                                                |  |                                           | 14,378    |   |      |   | 8,631     |  
|                                                                                                                                                                                                           |  |                                           |           |   |      |   |           |  
|Total liabilities                                                                                                                                                                                          |  |                                           | 899,878   |   |      |   | 985,404   |  
|                                                                                                                                                                                                           |  |                                           |           |   |      |   |           |  
|Commitments and contingencies (Note 9)                                                                                                                                                                     |  |                                           |           |   |      |   |           |  
|Shareholders equity:                                                                                                                                                                                      |  |                                           |           |   |      |   |           |  
|Preferred stock, $0.33 par value: 15,000,000 shares authorized, none outstanding                                                                                                                           |  |                                           |          |   |      |   |          |  
|Class A common stock, $0.33 par value; 210,000,000 shares authorized; 42,918,759 and 42,189,547 shares issued and 36,818,888 and
39,383,476 shares outstanding at December 31, 2006 and 2005, respectively |  |                                           | 14,163    |   |      |   | 13,923    |  
|Class B common stock, $0.33 par value; 135,000,000 shares authorized; 58,733,016 shares issued and outstanding at December 31, 2006 and
2005                                                               |  |                                           | 19,382    |   |      |   | 19,382    |  
|Additional paid-in capital                                                                                                                                                                                 |  |                                           | 640,298   |   |      |   | 635,650   |  
|Unearned stock-based compensation                                                                                                                                                                          |  |                                           |          |   |      |   | (2,032    | )
|Accumulated other comprehensive income, net of tax                                                                                                                                                         |  |                                           | 368       |   |      |   | 235       |  
|Retained earnings                                                                                                                                                                                          |  |                                           | 630,521   |   |      |   | 654,968   |  
|                                                                                                                                                                                                           |  |                                           |           |   |      |   |           |  
|                                                                                                                                                                                                           |  |                                           | 1,304,732 |   |      |   | 1,322,126 |  
|Less: Class A common stock held in treasury (6,099,871 and 2,806,071 shares at cost at December 31, 2006 and 2005,
respectively)                                                                           |  |                                           | (86,693   | ) |      |   | (41,466   | )
|                                                                                                                                                                                                           |  |                                           |           |   |      |   |           |  
|Total shareholders equity                                                                                                                                                                                 |  |                                           | 1,218,039 |   |      |   | 1,280,660 |  
|                                                                                                                                                                                                           |  |                                           |           |   |      |   |           |  
|Total liabilities and shareholders equity                                                                                                                                                                 |  | $                                         | 2,117,917 |   |      | $ | 2,266,064 |  
|                                                                                                                                                                                                           |  |                                           |           |   |      |   |           |  

See notes to consolidated financial statements.



35



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COX RADIO, INC.

CONSOLIDATED STATEMENTS OF INCOME



|                                                                          |  |                                               |         |   |      |   |         |      |  |   |         |  
|------------------------------------------------------------------------- |  | --------------------------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                          |  | Year Ended December 31,                       |        
|                                                                          |  | 2006                                          |         |   | 2005 |   |         | 2004 | 
|                                                                          |  | (Amounts in thousands, except per share data) |        
|Net revenues:                                                             |  |                                               |         |   |      |   |         |      |  |   |         |  
|Local                                                                     |  | $                                             | 308,279 |   |      | $ | 311,477 |      |  | $ | 310,595 |  
|National                                                                  |  |                                               | 98,030  |   |      |   | 95,910  |      |  |   | 98,417  |  
|Other                                                                     |  |                                               | 34,159  |   |      |   | 30,543  |      |  |   | 29,201  |  
|                                                                          |  |                                               |         |   |      |   |         |      |  |   |         |  
|Total net revenues                                                        |  |                                               | 440,468 |   |      |   | 437,930 |      |  |   | 438,213 |  
|Operating expenses:                                                       |  |                                               |         |   |      |   |         |      |  |   |         |  
|Cost of services (exclusive of depreciation and amortization shown below) |  |                                               | 86,440  |   |      |   | 86,252  |      |  |   | 98,219  |  
|Selling, general and administrative                                       |  |                                               | 171,366 |   |      |   | 169,817 |      |  |   | 162,617 |  
|Corporate general and administrative                                      |  |                                               | 19,869  |   |      |   | 19,439  |      |  |   | 17,676  |  
|Depreciation and amortization                                             |  |                                               | 11,195  |   |      |   | 11,245  |      |  |   | 11,867  |  
|(Gain) loss on loan guarantee                                             |  |                                               |        |   |      |   | (138    | )    |  |   | 3,064   |  
|Impairment of intangible assets                                           |  |                                               | 176,333 |   |      |   | 14,351  |      |  |   |        |  
|Other operating expenses, net                                             |  |                                               | 794     |   |      |   | 125     |      |  |   | 1,093   |  
|                                                                          |  |                                               |         |   |      |   |         |      |  |   |         |  
|Operating (loss) income                                                   |  |                                               | (25,529 | ) |      |   | 136,839 |      |  |   | 143,677 |  
|Other income (expense):                                                   |  |                                               |         |   |      |   |         |      |  |   |         |  
|Interest expense                                                          |  |                                               | (25,345 | ) |      |   | (27,444 | )    |  |   | (30,388 | )
|Other, net                                                                |  |                                               | 2       |   |      |   | (39     | )    |  |   | (387    | )
|                                                                          |  |                                               |         |   |      |   |         |      |  |   |         |  
|(Loss) income before income taxes                                         |  |                                               | (50,872 | ) |      |   | 109,356 |      |  |   | 112,902 |  
|                                                                          |  |                                               |         |   |      |   |         |      |  |   |         |  
|Current income tax expense                                                |  |                                               | 25,535  |   |      |   | 27,435  |      |  |   | 45,772  |  
|Deferred income tax (benefit) expense                                     |  |                                               | (51,960 | ) |      |   | 20,648  |      |  |   | (836    | )
|                                                                          |  |                                               |         |   |      |   |         |      |  |   |         |  
|Total income tax (benefit) expense                                        |  |                                               | (26,425 | ) |      |   | 48,083  |      |  |   | 44,936  |  
|                                                                          |  |                                               |         |   |      |   |         |      |  |   |         |  
|Net (loss) income                                                         |  | $                                             | (24,447 | ) |      | $ | 61,273  |      |  | $ | 67,966  |  
|                                                                          |  |                                               |         |   |      |   |         |      |  |   |         |  
|Net (loss) income per share  basic                                       |  |                                               |         |   |      |   |         |      |  |   |         |  
|Net (loss) income per common share                                        |  | $                                             | (0.25   | ) |      | $ | 0.61    |      |  | $ | 0.68    |  
|                                                                          |  |                                               |         |   |      |   |         |      |  |   |         |  
|Net (loss) income per share  diluted                                     |  |                                               |         |   |      |   |         |      |  |   |         |  
|Net (loss) income per common share                                        |  | $                                             | (0.25   | ) |      | $ | 0.61    |      |  | $ | 0.67    |  
|                                                                          |  |                                               |         |   |      |   |         |      |  |   |         |  
|                                                                          |  |                                               |        
|Weighted average common shares outstanding  basic                        |  |                                               | 96,012  |   |      |   | 100,165 |      |  |   | 100,552 |  
|Weighted average common shares outstanding  diluted                      |  |                                               | 96,012  |   |      |   | 100,430 |      |  |   | 100,758 |  

See notes to consolidated financial statements.



36



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##### Table of Contents

COX RADIO, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY



|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|----------------------------------------------------------------------------------------------------------- |  | ---------------------- |  | -------------------- | ------ | ------------------------- | ------ | ------ | ----------------------- | ------ |  | --------------------------------------------- | ------- | ------ | ----------------- | ------ | ------ | -------------- | ----- | - | ------ | - |  | - | ------- | - |  | ----- |  | - | ------- | - |  | - | --------- | -
|                                                                                                            |  | Class A Common Stock   |  | Class B Common Stock |        | AdditionalPaid-in Capital |        |        | Unearned Comp- ensation |        |  | AccumulatedOther Compre-hensive (Loss) Income |         |        | Retained Earnings |        |        | Treasury Stock |       |   |        |  
|                                                                                                            |  | Shares                 |  | Amount               |        | Shares                    |        | Amount |                         |        |  |                                               |         | Shares |                   | Amount |        |                | Total |  
|                                                                                                            |  | (Amounts in thousands) | 
|Balance at December 31, 2003                                                                                |  | 41,718                 |  | $                    | 13,767 |                           | 58,733 |        | $                       | 19,382 |  | $                                             | 626,499 |        |                   | $      |       |                |       | $ | (1,863 | ) |  | $ | 525,729 |   |  | 128   |  | $ | (1,846  | ) |  | $ | 1,181,668 |  
|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Comprehensive income:                                                                                       |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Net income                                                                                                  |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        |       |                |       |   |       |   |  |   | 67,966  |   |  |      |  |   |        |   |  |   | 67,966    |  
|Unrealized gain on interest rate swaps                                                                      |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        |       |                |       |   | 1,226  |   |  |   |        |   |  |      |  |   |        |   |  |   | 1,226     |  
|Reclassification to earnings of transition adjustments                                                      |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        |       |                |       |   | 102    |   |  |   |        |   |  |      |  |   |        |   |  |   | 102       |  
|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Comprehensive income                                                                                        |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   | 69,294    |  
|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Unearned stock-based compensation                                                                           |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        | (2,734 | )              |       |   |       |   |  |   |        |   |  |      |  |   |        |   |  |   | (2,734    | )
|Amortization of unearned stock-based compensation                                                           |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        | 431    |                |       |   |       |   |  |   |        |   |  |      |  |   |        |   |  |   | 431       |  
|Issuance of Class A common stock related to incentive plans, includes tax benefit of $1.9 million           |  | 388                    |  |                      | 128    |                           |       |        |                         |       |  |                                               | 8,886   |        |                   |        |       |                |       |   |       |   |  |   |        |   |  |      |  |   |        |   |  |   | 9,014     |  
|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Balance at December 31, 2004                                                                                |  | 42,106                 |  |                      | 13,895 |                           | 58,733 |        |                         | 19,382 |  |                                               | 635,385 |        |                   |        | (2,303 | )              |       |   | (535   | ) |  |   | 593,695 |   |  | 128   |  |   | (1,846  | ) |  |   | 1,257,673 |  
|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Comprehensive income:                                                                                       |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Net income                                                                                                  |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        |       |                |       |   |       |   |  |   | 61,273  |   |  |      |  |   |        |   |  |   | 61,273    |  
|Unrealized gain on interest rate swaps                                                                      |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        |       |                |       |   | 714    |   |  |   |        |   |  |      |  |   |        |   |  |   | 714       |  
|Reclassification to earnings of transition adjustments                                                      |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        |       |                |       |   | 56     |   |  |   |        |   |  |      |  |   |        |   |  |   | 56        |  
|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Comprehensive income                                                                                        |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   | 62,043    |  
|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Unearned stock-based compensation                                                                           |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        | (149   | )              |       |   |       |   |  |   |        |   |  |      |  |   |        |   |  |   | (149      | )
|Amortization of unearned stock-based compensation                                                           |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        | 420    |                |       |   |       |   |  |   |        |   |  |      |  |   |        |   |  |   | 420       |  
|Repurchase of Class A common stock                                                                          |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        |       |                |       |   |       |   |  |   |        |   |  | 2,678 |  |   | (39,620 | ) |  |   | (39,620   | )
|Issuance of Class A common stock related to incentive plans, includes tax benefit of less than $0.1 million |  | 84                     |  |                      | 28     |                           |       |        |                         |       |  |                                               | 265     |        |                   |        |       |                |       |   |       |   |  |   |        |   |  |      |  |   |        |   |  |   | 293       |  
|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Balance at December 31, 2005                                                                                |  | 42,190                 |  |                      | 13,923 |                           | 58,733 |        |                         | 19,382 |  |                                               | 635,650 |        |                   |        | (2,032 | )              |       |   | 235    |   |  |   | 654,968 |   |  | 2,806 |  |   | (41,466 | ) |  |   | 1,280,660 |  
|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Comprehensive income:                                                                                       |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Net loss                                                                                                    |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        |       |                |       |   |       |   |  |   | (24,447 | ) |  |      |  |   |        |   |  |   | (24,447   | )
|Unrealized gain on interest rate swaps                                                                      |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        |       |                |       |   | 77     |   |  |   |        |   |  |      |  |   |        |   |  |   | 77        |  
|Reclassification to earnings of transition adjustments                                                      |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        |       |                |       |   | 56     |   |  |   |        |   |  |      |  |   |        |   |  |   | 56        |  
|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Comprehensive income                                                                                        |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   | (24,314   | )
|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Unearned stock-based compensation                                                                           |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               | (2,032  | )      |                   |        | 2,032  |                |       |   |       |   |  |   |        |   |  |      |  |   |        |   |  |   |          |  
|Stock-based compensation expense                                                                            |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               | 1,567   |        |                   |        |       |                |       |   |       |   |  |   |        |   |  |      |  |   |        |   |  |   | 1,567     |  
|Repurchase of Class A common stock                                                                          |  |                       |  |                      |       |                           |       |        |                         |       |  |                                               |        |        |                   |        |       |                |       |   |       |   |  |   |        |   |  | 3,294 |  |   | (45,227 | ) |  |   | (45,227   | )
|Issuance of Class A common stock related to incentive plans, includes tax benefit of $0.8 million           |  | 729                    |  |                      | 240    |                           |       |        |                         |       |  |                                               | 5,113   |        |                   |        |       |                |       |   |       |   |  |   |        |   |  |      |  |   |        |   |  |   | 5,353     |  
|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  
|Balance at December 31, 2006                                                                                |  | 42,919                 |  | $                    | 14,163 |                           | 58,733 |        | $                       | 19,382 |  | $                                             | 640,298 |        |                   | $      |       |                |       | $ | 368    |   |  | $ | 630,521 |   |  | 6,100 |  | $ | (86,693 | ) |  | $ | 1,218,039 |  
|                                                                                                            |  |                        |  |                      |        |                           |        |        |                         |        |  |                                               |         |        |                   |        |        |                |       |   |        |   |  |   |         |   |  |       |  |   |         |   |  |   |           |  

See notes to consolidated financial statements.



37



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##### Table of Contents

COX RADIO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                     |  |                         |          |   |      |   |          |      |  |   |         |  
|------------------------------------------------------------------------------------ |  | ----------------------- | -------- | - | ---- | - | -------- | ---- |  | - | ------- | -
|                                                                                     |  | Year Ended December 31, |         
|                                                                                     |  | 2006                    |          |   | 2005 |   |          | 2004 | 
|                                                                                     |  | (Amounts in thousands)  |         
|Cash flows from operating activities:                                                |  |                         |          |   |      |   |          |      |  |   |         |  
|Net (loss) income                                                                    |  | $                       | (24,447  | ) |      | $ | 61,273   |      |  | $ | 67,966  |  
|Items not requiring cash:                                                            |  |                         |          |   |      |   |          |      |  |   |         |  
|Depreciation and amortization                                                        |  |                         | 11,195   |   |      |   | 11,245   |      |  |   | 11,867  |  
|Deferred income taxes                                                                |  |                         | (51,960  | ) |      |   | 20,648   |      |  |   | (836    | )
|Compensation expense related to long-term incentive plans                            |  |                         | 4,618    |   |      |   | 3,066    |      |  |   | 431     |  
|Other                                                                                |  |                         | 662      |   |      |   | 692      |      |  |   | 2,182   |  
|(Gain) loss on loan guarantee                                                        |  |                         |         |   |      |   | (138     | )    |  |   | 3,064   |  
|Impairment of intangible assets                                                      |  |                         | 176,333  |   |      |   | 14,351   |      |  |   |        |  
|Changes in assets and liabilities (net of effects of acquisitions and dispositions): |  |                         |          |   |      |   |          |      |  |   |         |  
|(Increase) decrease in accounts receivable                                           |  |                         | (2,272   | ) |      |   | 678      |      |  |   | 450     |  
|(Decrease) increase in accounts payable and accrued expenses                         |  |                         | (2,849   | ) |      |   | 1,378    |      |  |   | (3,147  | )
|(Decrease) increase in accrued salaries and wages                                    |  |                         | (192     | ) |      |   | 190      |      |  |   | (1,630  | )
|(Decrease) increase in accrued interest                                              |  |                         | (5,774   | ) |      |   | (599     | )    |  |   | 338     |  
|Increase (decrease) in income taxes payable                                          |  |                         | 194      |   |      |   | (2,517   | )    |  |   | (6,795  | )
|Other, net                                                                           |  |                         | 3,463    |   |      |   | 3,143    |      |  |   | (1,133  | )
|                                                                                     |  |                         |          |   |      |   |          |      |  |   |         |  
|Net cash provided by operating activities                                            |  |                         | 108,971  |   |      |   | 113,410  |      |  |   | 72,757  |  
|                                                                                     |  |                         |          |   |      |   |          |      |  |   |         |  
|Cash flows from investing activities:                                                |  |                         |          |   |      |   |          |      |  |   |         |  
|Capital expenditures                                                                 |  |                         | (11,537  | ) |      |   | (10,964  | )    |  |   | (9,019  | )
|Acquisitions and related expenses, net of cash acquired                              |  |                         | (7,688   | ) |      |   | (4,000   | )    |  |   | (681    | )
|Option to purchase radio stations                                                    |  |                         | (5,000   | ) |      |   | (2,000   | )    |  |   |        |  
|Investment in signal upgrades                                                        |  |                         | (5,631   | ) |      |   | (2,127   | )    |  |   | (7,680  | )
|Proceeds from sales of assets                                                        |  |                         | 46       |   |      |   | 187      |      |  |   | 128     |  
|Other, net                                                                           |  |                         | (220     | ) |      |   | 147      |      |  |   | (741    | )
|                                                                                     |  |                         |          |   |      |   |          |      |  |   |         |  
|Net cash used in investing activities                                                |  |                         | (30,030  | ) |      |   | (18,757  | )    |  |   | (17,993 | )
|                                                                                     |  |                         |          |   |      |   |          |      |  |   |         |  
|Cash flows from financing activities:                                                |  |                         |          |   |      |   |          |      |  |   |         |  
|Net borrowings (repayments) of revolving credit facilities                           |  |                         | 225,000  |   |      |   | 30,000   |      |  |   | (60,000 | )
|Repayment of 6.625% and 6.375% notes, respectively                                   |  |                         | (250,000 | ) |      |   | (100,000 | )    |  |   |        |  
|Cash paid for loss on loan guarantee                                                 |  |                         |         |   |      |   | (2,926   | )    |  |   |        |  
|Proceeds from issuances of stock related to stock-based compensation plans           |  |                         | 4,528    |   |      |   | 135      |      |  |   | 4,401   |  
|Tax benefit of stock options exercised                                               |  |                         | 824      |   |      |   | 9        |      |  |   | 1,880   |  
|Repurchase of Class A common stock                                                   |  |                         | (45,227  | ) |      |   | (39,620  | )    |  |   |        |  
|(Decrease) increase in book overdrafts                                               |  |                         | (1,262   | ) |      |   | 1,503    |      |  |   | (992    | )
|Payment of debt issuance costs                                                       |  |                         |         |   |      |   |         |      |  |   | (736    | )
|(Decrease) increase in amounts due to Cox Enterprises, net                           |  |                         | (11,878  | ) |      |   | 16,471   |      |  |   | (289    | )
|                                                                                     |  |                         |          |   |      |   |          |      |  |   |         |  
|Net cash used in financing activities                                                |  |                         | (78,015  | ) |      |   | (94,428  | )    |  |   | (55,736 | )
|                                                                                     |  |                         |          |   |      |   |          |      |  |   |         |  
|Net increase (decrease) in cash and cash equivalents                                 |  |                         | 926      |   |      |   | 225      |      |  |   | (972    | )
|Cash and cash equivalents at beginning of year                                       |  |                         | 3,455    |   |      |   | 3,230    |      |  |   | 4,202   |  
|                                                                                     |  |                         |          |   |      |   |          |      |  |   |         |  
|Cash and cash equivalents at end of year                                             |  | $                       | 4,381    |   |      | $ | 3,455    |      |  | $ | 3,230   |  
|                                                                                     |  |                         |          |   |      |   |          |      |  |   |         |  

See notes to consolidated financial statements.



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COX RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Basis of Presentation

Cox Radio is a leading national radio broadcasting company whose business, which constitutes one reportable segment, is devoted to acquiring, developing
and operating radio stations located throughout the United States. Cox Enterprises, Inc. (Cox Enterprises) indirectly owns approximately 65% of the common stock of Cox Radio and has approximately 95% of the voting power of Cox Radio.

The consolidated financial statements of Cox Radio represent the operations of the radio broadcasting stations owned or operated by Cox Radio. All
significant intercompany accounts have been eliminated in the consolidated financial statements of Cox Radio.

The historical financial
statements do not necessarily reflect the results of operations or financial position that would have existed had Cox Radio not been a majority-owned indirect subsidiary of Cox Enterprises.

2. Summary of Significant Accounting Policies

Cash Equivalents

Cox Radio considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The
carrying value of these investments approximates fair value.

Revenue Recognition

Cox Radio recognizes revenues when the following conditions are met: persuasive evidence of an arrangement exists; delivery has occurred or services have
been rendered; the price is fixed or determinable; and collectibility is reasonably assured. These criteria are generally met for advertising revenue at the time an advertisement is broadcast. Advertising revenue is recorded net of advertising
agency commissions. Agency commissions, when applicable, are calculated based on a stated percentage applied to gross revenues. Cox Radio records an allowance for doubtful accounts based on historical information, analysis of credit memo data and
any other relevant factors.

Internet revenue is recognized as ads are run over the Internet. Non-traditional event revenue is recognized
when the event occurs.

Barter Arrangements

Barter transactions are recorded at the estimated fair value of the products or services received. Revenue from barter transactions is recognized when commercials are broadcast. Products or services are recorded when the products or
services are received. If commercials are broadcast before the receipt of products or services, a barter receivable is recorded. If products or services are received before the broadcast of commercials, a barter payable is recorded.

Corporate General and Administrative Expenses

Corporate general and administrative expenses consist of corporate overhead costs not specifically allocable to any of Cox Radios individual stations.

Advertising Expenses

Advertising expenses are expensed as incurred. Advertising expenses for the
years ended December 31, 2006, 2005 and 2004 were $8.4 million, $7.4 million and $6.9 million, respectively.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. Depreciation is computed principally using the straight-line
method at rates based upon estimated useful lives of 5 to 40 years for buildings and building improvements, 5 to 25 years for broadcast equipment, 7 to 10 years for furniture and fixtures and 2 to 5 years for computers, software and other equipment.



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Expenditures for maintenance and repairs are charged to operating expense as incurred. At the time of
retirements, sales or other dispositions of property, the original cost and related accumulated depreciation are written off.

Web Site Development
Costs

Web site development activities include planning, design and development of graphics and content for new web sites and operation
of existing sites. Cox Radio accounts for costs associated with such activities in accordance with the Emerging Issues Task Force (EITF) Issue No. 00-2, Accounting for Web Site Development Costs. Under this guidance, costs incurred that
involve providing additional functions and features to the web site should be capitalized. Costs associated with website planning, maintenance, content development and training should be expensed as incurred. Capitalized costs are generally
amortized over two years.

Intangible Assets

Intangible assets consist primarily of Federal Communications Commission (FCC) broadcast licenses, but also include goodwill and certain other intangible assets acquired in purchase business combinations. Upon the adoption of Statement
of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, on January 1, 2002, Cox Radio ceased amortization of goodwill and FCC licenses, which are indefinite-lived intangible assets. Other
intangible assets are amortized on a straight-line basis over the contractual lives of the assets.

Cox Radio evaluates its FCC licenses
for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. FCC licenses are evaluated for impairment at the market level using the direct method. If the carrying amount of
FCC licenses is greater than their estimated fair value in a given market, the carrying amount of FCC licenses in that market is reduced to its estimated fair value. Cox Radio also evaluates goodwill in each of its reporting units (markets) for
impairment annually, or more frequently if certain circumstances are present, using the residual method. If the carrying amount of goodwill in a reporting unit is greater than its implied value of goodwill, determined from the estimated fair
value of the reporting unit, the carrying amount of goodwill in that reporting unit is reduced to its estimated fair value.

Cox Radio
utilizes independent appraisals in testing FCC licenses and goodwill for impairment. These appraisals principally use the discounted cash flow methodology. This income approach consists of a quantitative model, which incorporates variables
such as market advertising revenues, market revenue share projections, anticipated operating profit margins and various discount rates. The variables used in the analysis reflect historical station and advertising market growth trends, as well
as anticipated performance and market conditions. Multiples of operating cash flow are also considered. Cox Radio evaluates amortizing intangible assets for recoverability when circumstances indicate an impairment may have occurred, using
an undiscounted cash flow methodology. If the future undiscounted cash flows for the intangible asset are less than net book value, net book value is reduced to the estimated fair value.

Other Assets

Other assets consist primarily of
investments in signal upgrades. Signal upgrades represent Cox Radios process of enhancing selected stations signal strength. Upon completion of each signal upgrade, Cox Radio reclassifies the costs incurred for the upgrade to FCC
licenses. The amount reclassified is validated based upon an independent appraisal of the FCC license after the upgrade is completed.

Impairment of
Long-Lived Assets

Cox Radio accounts for long-lived assets in accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. Long-lived assets are required to be reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, with any impairment losses being reported
in the period in which the recognition criteria are first applied based on the fair value of the asset. Cox Radio assesses the recoverability based on a review of estimated undiscounted cash flows. Long-lived assets to be disposed of are required to
be reported at the lower of carrying amount or fair value less cost to sell.

Income Taxes

Cox Radio provides for income taxes using the liability method in accordance with SFAS No. 109, Accounting for Income Taxes. SFAS
No. 109 requires an asset and liability based approach in accounting for income taxes. Deferred income taxes reflect the net tax effect on future years of temporary differences between the carrying amount of assets and liabilities for financial
statement and income tax purposes. Cox Radio evaluates its effective tax rates regularly and adjusts rates when appropriate based on currently available information relative to statutory rates, apportionment factors and the applicable taxable income
in the jurisdictions in which Cox Radio operates, among other factors.



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Pension and Postretirement Benefits

Cox Enterprises generally provides defined pension benefits to eligible Cox Radio employees based on years of service and compensation during those years. Cox Enterprises also provides certain health care and life
insurance benefits to eligible Cox Radio employees and retirees. Expenses related to these plans are allocated to Cox Radio through the intercompany account. The amount of the allocation is generally based on actuarial determinations of the effect
of Cox Radio employees participation in the Cox Enterprises plans. Prior to January 1, 2007, only retirees and employees of Cox Radio who were employed on or before December 31, 1996 were eligible to participate in these plans. On
December 14, 2006, the Cox Radio Board of Directors approved expanded participation so that, effective January 1, 2007, all remaining eligible employees of Cox Radio will participate in both the pension plan and post-retirement health care
plan on a prospective basis.

Incentive Compensation Plans

In 2005, Cox Radios Long-Term Incentive Plan (LTIP) consisted of a mix of stock options and performance awards to selected officers and senior executives. Performance awards are designed to increase in value
based on Cox Radios operating performance and are denominated as a number of units which are multiplied by the percentage increase in certain pre-established financial metrics over a five-year period. Performance awards vest 60% in the third
year, 80% in the fourth year, and 100% in the fifth year from the date of grant. Cox Radio recognizes compensation expense related to the performance awards over the appropriate vesting period based on the amount that is expected to be paid upon
vesting of the awards. Performance awards will be paid out in cash or, for certain employees, in Cox Radio stock, which will remain subject to restrictions on resale or transfer as long as the recipient is employed by Cox Radio or one of its
affiliates.

In 2006, Cox Radio implemented a new long-term award format that consists of a mix of performance awards (as described above)
and restricted stock. Awards of restricted stock fully vest five years after the date of grant and are subject to a risk of forfeiture until the vesting date. Cox Radio recognizes compensation expense related to the restricted stock awards over the
five-year vesting period.

During the year ended December 31, 2006, Cox Radio had three stock-based employee compensation plans, the
LTIP and two Employee Stock Purchase Plans (each an ESPP). The 2004 ESPP terminated during the first quarter of 2006, and shares were issued under this plan effective March 31, 2006. In July 2006, payroll deductions began for employees
participating in the 2006 ESPP. Prior to January 1, 2006, Cox Radio would have accounted for these plans under the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees (APB 25), and related interpretations, as permitted by SFAS No. 123 Accounting for Stock-Based Compensation (Statement 123). With the exception of restricted stock issued under the LTIP, no stock-based employee
compensation cost was recognized in the Consolidated Statements of Income for the three-months and year ended December 31, 2005 as all options granted under those plans had either an exercise price equal to the market value of the underlying
Class A common stock on the date of grant or, in the case of the 2004 ESPP, were issued in connection with a non-compensatory plan. Effective January 1, 2006, Cox Radio adopted the fair value recognition provisions of SFAS No. 123
(revised 2004), Share Based Payment (SFAS No. 123R), using the modified-prospective transition method. This transition method, discussed in further detail below, does not require results for prior periods to be restated.

Under the modified-prospective transition method, compensation cost recognized during the period of adoption should include: (a) compensation
cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of Statement 123; and (b) compensation cost for all
share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123R. On October 31, 2005, the Compensation Committee of the Board of Directors
approved the acceleration of the vesting of all unvested stock options granted from January 2001 through October 31, 2005. Unvested stock option awards with respect to approximately 4.7 million shares of Class A common stock were
subject to this vesting acceleration. However, the Compensation Committee left the exercise date of these options, and all other terms of the awards, unchanged. The purpose of accelerating the vesting of these options was to allow Cox Radio to avoid
recognition of compensation expense associated with these options in future periods as the exercise prices exceeded the market value of the underlying stock on the date of acceleration. Therefore, incremental compensation expense recognized in the
Consolidated Statements of Income for the three-months and year ended December 31, 2006, as a result of the adoption of SFAS No. 123R, relates only to the two ESPPs as no new share-based payment awards, with the exception of restricted
stock awards, have been granted subsequent to January 1, 2006. As indicated above, restricted stock awards were required to be expensed prior to the adoption of SFAS No. 123R. As a result of the adoption of SFAS No. 123R on
January 1, 2006, Cox Radios income before income taxes was $0.1 million and $0.2 million lower for the three-month period and year ended December 31, 2006, respectively, than if Cox Radio had continued to account for share-based
compensation under APB 25.

SFAS No. 123R also requires the benefits of tax deductions in excess of recognized stock-based
compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as previously required. For the three-month period and year ended December 31, 2006, there were tax benefits of $0.1 million and $0.8 million,
respectively, resulting from tax deductions in excess of the related stock-based compensation cost.



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Had compensation cost for Cox Radios stock-based compensation plans been determined based on the
fair value at the grant or enrollment dates in accordance with the fair value provisions of Statement 123, Cox Radios net income and net income per share for the years ended December 31, 2005 and 2004 would have been the pro forma amounts
indicated below. Actual results for the year ended December 31, 2006 have been determined in accordance with the fair value provisions of SFAS No. 123R and, therefore, pro forma results for such period are not necessary.



|                                                                                                                                            |  |                                               |         |   |      |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------- | ------- | - | ---- | - | ------ | -
|                                                                                                                                            |  | Year Ended December 31,                       |        
|                                                                                                                                            |  | 2005                                          |         |   | 2004 |  
|                                                                                                                                            |  | (Amounts in thousands, except per share data) |        
|Net income, as reported                                                                                                                     |  | $                                             | 61,273  |   |      | $ | 67,966 |  
|Add: Amortization of unearned compensation related to restricted stock                                                                      |  |                                               | 257     |   |      |   | 259    |  
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax
effects |  |                                               | (13,782 | ) |      |   | (6,314 | )
|                                                                                                                                            |  |                                               |         |   |      |   |        |  
|Pro forma net income                                                                                                                        |  | $                                             | 47,748  |   |      | $ | 61,911 |  
|                                                                                                                                            |  |                                               |         |   |      |   |        |  
|Earnings per share:                                                                                                                         |  |                                               |         |   |      |   |        |  
|Basic  as reported                                                                                                                         |  | $                                             | 0.61    |   |      | $ | 0.68   |  
|                                                                                                                                            |  |                                               |         |   |      |   |        |  
|Basic  pro forma                                                                                                                           |  | $                                             | 0.48    |   |      | $ | 0.62   |  
|                                                                                                                                            |  |                                               |         |   |      |   |        |  
|Diluted  as reported                                                                                                                       |  | $                                             | 0.61    |   |      | $ | 0.67   |  
|                                                                                                                                            |  |                                               |         |   |      |   |        |  
|Diluted  pro forma                                                                                                                         |  | $                                             | 0.48    |   |      | $ | 0.61   |  
|                                                                                                                                            |  |                                               |         |   |      |   |        |  

Pro forma results for the year ended December 31, 2005 include approximately $12.1 million
related to the acceleration of the vesting of all of Cox Radios unvested out of the money stock options granted under its LTIP from January 2001 through October 31, 2005. See Note 12 for further discussion.

Concentration of Risk

A significant portion of Cox
Radios business historically has been conducted in the Atlanta market. Net revenues earned from radio stations located in Atlanta represented 23%, 23% and 25% of total revenues for the years ended December 31, 2006, 2005 and 2004,
respectively.

Use of Estimates

The
preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

In June 2006, the
Financial Accounting Standards Board (FASB) issued Financial Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No. 109, Accounting for Income Taxes, which is effective
for Cox Radio as of January 1, 2007. FIN 48 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those
benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest benefit that is greater than 50 percent likely of being realized upon
ultimate settlement. The cumulative effect of applying FIN 48 is to be reported as an adjustment to the opening balance of retained earnings in the year of adoption. Cox Radio is currently finalizing its evaluation of the impact of adoption and
has not yet determined the effect on Cox Radios financial position or results of operations.

In September 2006, the SEC issued Staff
Accounting Bulletin (SAB) No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. SAB No. 108 provides guidance on how the effects of the carryover or
reversal of prior year misstatements should be considered in quantifying a current year misstatement. The SEC staff believes that registrants should quantify errors using both a balance sheet and an income statement approach and evaluate whether



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either approach results in quantifying a misstatement that, when all relevant quantitative and qualitative factors are considered, is material. SAB
No. 108 was effective for fiscal years ending on or after November 15, 2006. The implementation of SAB No. 108 did not have a material impact on Cox Radios financial position, results of operations or cash flows.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 provides enhanced guidance for using fair
value to measure assets and liabilities. The statement defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 is
effective for fiscal years beginning after November 15, 2007 and interim periods within those years. The adoption of SFAS No. 157 is not expected to have a material impact on Cox Radios financial position, results of operations or
cash flows.

In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other
Postretirement Plans. SFAS No. 158 requires an employer to: (a) recognize in its statement of financial position an asset for a plans overfunded status or a liability for a plans underfunded status; (b) measure a
plans assets and its obligations that determine its funded status as of the end of the employers fiscal year, with limited exceptions; and (c) recognize changes in the funded status of a defined benefit post-retirement plan in the
year in which the changes occur as a component of comprehensive income. The adoption of SFAS No. 158 will not have a material impact on Cox Radios financial position, results of operations or cash flows because Cox Radio does not sponsor
a defined benefit plan.

Reclassifications

Certain prior year amounts have been reclassified for comparative purposes.

3. Earnings per Common Share and Capital Structure



|                                                                       |  |                                              |         |   |      |   |         |  |   |        
|---------------------------------------------------------------------- |  | -------------------------------------------- | ------- | - | ---- | - | ------- |  | - | -------
|                                                                       |  | Year Ended December 31,                     
|                                                                       |  | 2006                                         |         |   | 2005 |   | 2004   
|                                                                       |  | (Amounts in thousands, except pershare data)
|Net (loss) income                                                      |  | $                                            | (24,447 | ) |      | $ | 61,273  |  | $ | 67,966 
|                                                                       |  |                                              |        
|Earnings Per Share  BasicWeighted-average common shares outstanding   |  |                                              | 96,012  |   |      |   | 100,165 |  |   | 100,552
|                                                                       |  |                                              |         |   |      |   |         |  |   |        
|Net (loss) income per common share  basic                             |  | $                                            | (0.25   | ) |      | $ | 0.61    |  | $ | 0.68   
|                                                                       |  |                                              |         |   |      |   |         |  |   |        
|Earnings Per Share  DilutedWeighted-average common shares outstanding |  |                                              | 96,012  |   |      |   | 100,165 |  |   | 100,552
|Effect of dilutive securities:                                         |  |                                              |         |   |      |   |         |  |   |        
|                                                                       |  |                                              |        
|Long-Term Incentive Plan                                               |  |                                              |        |   |      |   | 227     |  |   | 155    
|Employee Stock Purchase Plan                                           |  |                                              |        |   |      |   | 38      |  |   | 51     
|                                                                       |  |                                              |         |   |      |   |         |  |   |        
|Shares applicable to earnings per share  diluted                      |  |                                              | 96,012  |   |      |   | 100,430 |  |   | 100,758
|                                                                       |  |                                              |         |   |      |   |         |  |   |        
|Net (loss) income per common share  diluted                           |  | $                                            | (0.25   | ) |      | $ | 0.61    |  | $ | 0.67   
|                                                                       |  |                                              |         |   |      |   |         |  |   |        

For the year ended December 31, 2006, 6.9 million stock options, 0.5 million shares
of restricted stock and 0.2 million ESPP purchase rights were excluded from the computation of net loss per common share  diluted because their inclusion would have been anti-dilutive. Cox Radio excluded 6.6 million and
5.9 million stock options from the computation of net income per common share diluted for the years ended December 31, 2005 and 2004, respectively, because to include them would have been anti-dilutive.

4. Acquisitions and Dispositions of Businesses

Historically, Cox Radio has actively managed its portfolio of radio stations through selected acquisitions, dispositions and exchanges, as well as through the use of local marketing agreements, or LMAs, and joint sales agreements, or JSAs.
Under an LMA or a JSA, the company operating a station provides programming or sales and marketing or a combination of such services on behalf of the owner of a station. The broadcast revenues and operating expenses of stations operated by Cox Radio
under LMAs and JSAs have been included in Cox Radios operations since the respective effective dates of such agreements. All acquisitions discussed below have been accounted for using the purchase method. As such, the results of operations of
the acquired stations have been included in the results of operations from the date of acquisition. Specific transactions entered into by Cox Radio during the past three years through February 15, 2007 are discussed below.

In September 2006, Cox Radio consummated the acquisition of WOKV-FM (formerly WBGB-FM) serving the Jacksonville, Florida market for a purchase price of
approximately $7.7 million. The purchase price was allocated substantially to FCC licenses.



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In January 2005, Cox Radio paid $2 million for an option to purchase five radio stations for $60 million.
In October 2006, the related agreement was amended to extend the period within which Cox Radio could exercise its option to purchase the stations by approximately one month, to January 31, 2008. In consideration for granting Cox Radio an
exclusive three-year option, the option agreement provides the sellers a right that is exercisable at two distinct times during the option term to provide notice requiring Cox Radio to elect whether or not to purchase the stations. While these
rights are called put rights under the agreement, exercise of these rights by the sellers does not obligate Cox Radio to purchase the stations. Rather, upon receiving notice from the sellers, if Cox Radio elects to not purchase the stations at that
time, it must pay $5 million to the sellers. If Cox Radio elects to acquire the stations at any time during the term of the agreement, the initial $2 million payment and any amounts previously paid by Cox will be applied to the purchase price of the
stations. During July 2006, the sellers exercised their first put right, and Cox Radio paid the $5 million put refusal payment. Based on the facts and circumstances, Cox Radio determined that the sellers exercise of their second put right,
which is exercisable in July 2007, was probable and therefore accrued the $5 million second put refusal payment at June 30, 2006.

In
August 2004, Cox Radio entered into an agreement with Salem Communications to acquire KRTR-AM (formerly KHNR-AM) and KKNE-AM (formerly KHCM-AM) serving the Honolulu, Hawaii market. As part of this transaction, Cox Radio exercised its option to
acquire KGMZ-FM from Honolulu Broadcasting and exchanged the assets of KGMZ-FM for the two AM stations, valued at $4.0 million. This transaction closed in January 2005, and the loan guarantee of $6.6 million was terminated. Cox Radio recognized an
aggregate loss on loan guarantee of $2.9 million related to this transaction.

5. Investments

iBiquity Digital Corporation - Cox Radio holds shares of common stock of iBiquity Digital Corporation (formerly USA Digital Radio, Inc.), a
developer of digital radio broadcasting technology, that Cox Radio originally acquired for a total purchase price of $2.5 million. Cox Radio accounts for this investment, included in other assets in the accompanying balance sheets, under the cost
method. This investment is evaluated for impairment on an annual basis or as the circumstances dictate. No impairment has been recorded to date.

6.
Property and Equipment



|                                    |  |                        |         |   |      |   |         |  
|----------------------------------- |  | ---------------------- | ------- | - | ---- | - | ------- | -
|                                    |  | December 31,           |        
|                                    |  | 2006                   |         |   | 2005 |  
|                                    |  | (Amounts in thousands) |        
|Land                                |  | $                      | 8,161   |   |      | $ | 8,125   |  
|Buildings and building improvements |  |                        | 32,093  |   |      |   | 31,099  |  
|Broadcast equipment                 |  |                        | 108,069 |   |      |   | 107,930 |  
|Construction in progress            |  |                        | 5,104   |   |      |   | 2,215   |  
|                                    |  |                        |         |   |      |   |         |  
|Property and equipment, at cost     |  |                        | 153,427 |   |      |   | 149,369 |  
|Less accumulated depreciation       |  |                        | (79,093 | ) |      |   | (75,344 | )
|                                    |  |                        |         |   |      |   |         |  
|Net property and equipment          |  | $                      | 74,334  |   |      | $ | 74,025  |  
|                                    |  |                        |         |   |      |   |         |  

7. Goodwill and Other Intangible Assets

Cox Radio accounts for goodwill and intangible assets in accordance with SFAS No. 142, which requires that goodwill and certain intangible assets,
including FCC licenses, not be amortized but instead be tested for impairment at least annually. Cox Radios annual impairment testing date is December 31st.

During the first quarter of 2007, Cox Radio performed its annual tests for impairment and recorded an impairment charge of $173.9 million to reduce the carrying value of FCC licenses at the Birmingham, Greenville,
Houston, Louisville and Richmond markets to their estimated fair value. This non-cash charge was recorded in the fourth quarter and is reflected in the Consolidated Statement of Income for the year ended December 31, 2006. Additionally, as a
result of the impairment test, Cox Radio recorded a goodwill impairment charge of $2.5 million in the fourth quarter as reflected in the Consolidated Statement of Income for the year ended December 31, 2006. The $2.5 million reflects charges to
reduce the carrying value of goodwill at the Louisville market to its estimated fair value.

During the first quarter of 2006, Cox Radio
performed its annual tests for impairment and no impairment of FCC licenses was indicated. However, as a result of the impairment test, Cox Radio recorded a goodwill impairment charge of $14.4 million in the fourth quarter as reflected in the
Consolidated Statement of Income for the year ended December 31, 2005. The $14.4 million reflects charges to reduce the carrying value of goodwill at the Birmingham market to its estimated fair value.

During 2005, Cox Radio determined that approximately $209 million of FCC licenses had been misclassified as goodwill in its consolidated balance sheet at
December 31, 2004. Accordingly, the December 31, 2004 consolidated balance sheet presented herein reflects the reclassification of $209 million from goodwill to FCC licenses.



44



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##### Table of Contents

The following table reflects the components of intangible assets for the periods indicated:



|                                              |  |                        |           |                         |   |                    |  |   |          
|--------------------------------------------- |  | ---------------------- | --------- | ----------------------- | - | ------------------ |  | - | ---------
|                                              |  | Gross Carrying Value   |           | AccumulatedAmortization |   | Net Carrying Value
|                                              |  | (Amounts in thousands)
|December 31, 2006                             |  |                        |           |                         |   |                    |  |   |          
|FCC licenses and other intangible assets, net |  | $                      | 1,703,019 |                         | $ | 577                |  | $ | 1,702,442
|Goodwill                                      |  |                        | 215,584   |                         |   |                   |  |   | 215,584  
|                                              |  |                        |          
|December 31, 2005                             |  |                        |           |                         |   |                    |  |   |          
|FCC licenses and other intangible assets, net |  | $                      | 1,869,300 |                         | $ | 561                |  | $ | 1,868,739
|Goodwill                                      |  |                        | 217,921   |                         |   |                   |  |   | 217,921  

Amortization expense for each of the years ended December 31, 2006 and 2005 was less than
$0.1 million. Amortization expense for each of the next five years is not expected to be material. Total amortizable intangible assets are immaterial.

In September 2006, Cox Radio consummated the acquisition of WOKV-FM (formerly WBGB-FM) serving the Jacksonville, Florida market for a purchase price of approximately $7.7 million. The purchase price was allocated
substantially to FCC licenses.

During 2005, Cox Radio completed the acquisition of KRTR-AM (formerly KHNR-AM) and KKNE-AM (formerly
KHCM-AM) in Honolulu, Hawaii and, in connection therewith, classified $3.8 million into FCC licenses and less than $0.1 million into goodwill.

During 2005, Cox Radio completed a signal upgrade for WBHJ-FM in Birmingham, Alabama and, in connection therewith, reclassified $5.5 million from other assets to FCC licenses.

During 2004, Cox Radio completed a signal upgrade for WPYO-FM in Orlando, Florida and, in connection therewith, reclassified $2.4 million from other
assets to FCC licenses.

During 2004, Cox Radio completed signal upgrades for WALR-FM in Atlanta, Georgia and, in connection therewith,
reclassified $6.6 million from other assets to FCC licenses, and for WODL-FM in Birmingham, Alabama and, in connection therewith, reclassified $7.8 million from other assets to FCC licenses.

8. Income Taxes

Income tax expense (benefit) is
summarized as follows:



|                                   |  |                         |         |   |      |   |        |  |   |        |  
|---------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------ |  | - | ------ | -
|                                   |  | Year Ended December 31, |        
|                                   |  | 2006                    |         |   | 2005 |   | 2004   | 
|                                   |  | (Amounts in thousands)  |        
|Current:                           |  |                         |         |   |      |   |        |  |   |        |  
|Federal                            |  | $                       | 28,246  |   |      | $ | 22,612 |  | $ | 33,822 |  
|State                              |  |                         | (2,711  | ) |      |   | 4,823  |  |   | 11,950 |  
|                                   |  |                         |         |   |      |   |        |  |   |        |  
|Total current                      |  |                         | 25,535  |   |      |   | 27,435 |  |   | 45,772 |  
|                                   |  |                         |         |   |      |   |        |  |   |        |  
|                                   |  |                         |        
|Deferred:                          |  |                         |         |   |      |   |        |  |   |        |  
|Federal                            |  |                         | (38,995 | ) |      |   | 16,968 |  |   | 1,407  |  
|State                              |  |                         | (12,965 | ) |      |   | 3,680  |  |   | (2,243 | )
|                                   |  |                         |         |   |      |   |        |  |   |        |  
|Total deferred                     |  |                         | (51,960 | ) |      |   | 20,648 |  |   | (836   | )
|                                   |  |                         |         |   |      |   |        |  |   |        |  
|Total income tax (benefit) expense |  | $                       | (26,425 | ) |      | $ | 48,083 |  | $ | 44,936 |  
|                                   |  |                         |         |   |      |   |        |  |   |        |  

The tax effects of significant temporary differences, which comprise the net deferred tax
liabilities, are as follows:



|                                              |  |                        |          |   |      |   |          |  
|--------------------------------------------- |  | ---------------------- | -------- | - | ---- | - | -------- | -
|                                              |  | December 31,           |         
|                                              |  | 2006                   |          |   | 2005 |  
|                                              |  | (Amounts in thousands) |         
|Current deferred tax assets:                  |  |                        |          |   |      |   |          |  
|Provision for doubtful accounts               |  | $                      | 1,151    |   |      | $ | 1,242    |  
|                                              |  |                        |          |   |      |   |          |  
|Total net current assets                      |  | $                      | 1,151    |   |      | $ | 1,242    |  
|                                              |  |                        |          |   |      |   |          |  
|                                              |  |                       
|Noncurrent deferred tax assets (liabilities): |  |                        |          |   |      |   |          |  
|Property and equipment                        |  | $                      | (6,509   | ) |      | $ | (8,003   | )
|Intangibles                                   |  |                        | (468,384 | ) |      |   | (515,805 | )
|Employee compensation and benefits            |  |                        | 5,102    |   |      |   | 2,311    |  
|Other                                         |  |                        | 1,709    |   |      |   | 1,457    |  
|                                              |  |                        |          |   |      |   |          |  
|Total net noncurrent liabilities              |  |                        | (468,082 | ) |      |   | (520,040 | )
|                                              |  |                        |          |   |      |   |          |  
|Net deferred tax liabilities                  |  | $                      | (466,931 | ) |      | $ | (518,798 | )
|                                              |  |                        |          |   |      |   |          |  

Income tax (benefit) expense computed using the federal statutory rates is reconciled to the
reported income tax provisions as follows:



|                                                                                        |  |                         |         |   |      |   |        |      |  |   |        |  
|--------------------------------------------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                        |  | Year Ended December 31, |        
|                                                                                        |  | 2006                    |         |   | 2005 |   |        | 2004 | 
|                                                                                        |  | (Amounts in thousands)  |        
|Federal statutory income tax rate                                                       |  |                         | 35      | % |      |   | 35     | %    |  |   | 35     | %
|Computed tax (benefit) expense at federal statutory rates on income before income taxes |  | $                       | (17,806 | ) |      | $ | 38,275 |      |  | $ | 39,516 |  
|State income taxes (net of federal tax benefit)                                         |  |                         | (6,175  | ) |      |   | 5,218  |      |  |   | 8,182  |  
|Change in estimated effective state tax rates                                           |  |                         | (4,014  | ) |      |   | 309    |      |  |   | (1,872 | )
|Impairment of intangible assets                                                         |  |                         | 859     |   |      |   | 4,162  |      |  |   |       |  
|Other, net                                                                              |  |                         | 711     |   |      |   | 119    |      |  |   | (890   | )
|                                                                                        |  |                         |         |   |      |   |        |      |  |   |        |  
|Income tax (benefit) expense                                                            |  | $                       | (26,425 | ) |      | $ | 48,083 |      |  | $ | 44,936 |  
|                                                                                        |  |                         |         |   |      |   |        |      |  |   |        |  



45



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##### Table of Contents

Income tax expense decreased $74.5 million to a $26.4 million benefit in 2006. The change in income tax
expense was primarily attributable to a $67.1 million deferred income tax benefit resulting from the impairment of intangibles assets discussed above, as well as changes in certain state effective tax rates and adjustments for the actual or expected
resolution of certain income tax audits. Cox Radios effective tax rates for 2006 and 2005 were 51.9% and 44.0%, respectively. The tax benefit for 2006 reflects an income tax rate significantly higher than the federal statutory rate due in part
to the current tax impact of adjustments and settlements with various state taxing jurisdictions, the deferred tax impact of changes in state income tax laws and the relatively nominal pre-tax income.

Each year, Cox Radio analyzes its effective rate for deferred state income tax purposes. The appropriate rate is determined based on the states in which
Cox Radio currently operates and the relative statutory rates, apportionment factors and taxable income applicable to those states. Accordingly, adjustments of approximately $(4.0) million, $0.3 million and $1.9 million were recorded in 2006, 2005
and 2004, respectively.

During 2006, Cox Radio received a $3.7 million refund related to the conclusion of a federal income tax audit for
the 2002-2003 tax years. Adjustments made during federal income tax audits for the 1998-2001 tax years gave rise to this refund. There was no material income statement impact in the current year. The Internal Revenue Services (IRS) has initiated a
field examination for tax periods 2004 and 2005. Additionally, during 2006, Cox Radio concluded several state audits through which it paid $2.7 million and recorded a corresponding reduction to income tax expense of $6.1 million.

During 2004 and 2005, in connection with the conclusion of federal income tax audits for the years 1998  2001, Cox Radio paid approximately $27.1
million in taxes related to certain radio station transactions completed during the audit period. Cox Radio had previously provided for the possibility of this outcome. As a result of the audit, a reclassification between current and deferred tax
liability and expense was made during 2004.

In the normal course of business, Cox Radios tax returns are subject to examination by
various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities. Cox Radio accrues a liability when it believes that an assessment is probable. In June 2006, the FASB issued FIN 48, which
is effective for Cox Radio as of January 1, 2007. FIN 48 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For
those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest benefit that is greater than 50 percent likely of being realized
upon ultimate settlement. The cumulative effect of applying FIN 48 is to be reported as an adjustment to the opening balance of retained earnings in the year of adoption. Cox Radio is currently finalizing its evaluation of the impact of
adoption and has not yet determined the effect on its financial position or results of operations.

9. Long-Term Debt, Commitments and Contingencies

Cox Radios debt at December 31, 2006 and 2005 consisted of the following:



|                                              |  |                        |         |      |   |        
|--------------------------------------------- |  | ---------------------- | ------- | ---- | - | -------
|                                              |  | 2006                   |         | 2005
|                                              |  | (Amounts in thousands)
|6.625% notes payable, due in February 2006(1) |  | $                      |        |      | $ | 249,988
|Revolving credit facility                     |  |                        | 380,000 |      |   | 155,000
|                                              |  |                        |         |      |   |        
|Total long-term debt                          |  |                        | 380,000 |      |   | 404,988
|Less current portion                          |  |                        |        |      |   |       
|                                              |  |                        |         |      |   |        
|Total long-term debt, less current portion    |  | $                      | 380,000 |      | $ | 404,988
|                                              |  |                        |         |      |   |        

---

|(1) | At December 31, 2005, the estimated aggregate fair value of the 6.625% notes was approximately $250.6 million based on quoted market prices. The 6.625% notes due
February 15, 2006 were excluded from current liabilities because Cox Radio refinanced this obligation on a long-term basis under its credit facility, which had unused capacity of $345 million as of December 31, 2005.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In July 2006, Cox Radio replaced its then existing $500 million, five-year unsecured revolving credit facility with a $600
million five-year unsecured revolving credit facility. The interest rate for the new facility is, at Cox Radios option:



| |  |  | the greater of the prime rate or the federal funds borrowing rate plus 0.5%;
| | - |  | ----------------------------------------------------------------------------



46



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##### Table of Contents

| |  |  | the London Interbank Offered Rate (LIBOR) plus a spread based on the credit ratings of Cox Radios senior long-term debt;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | the federal funds borrowing rate plus a spread based on the credit ratings of Cox Radios senior long-term debt.
| | - |  | ----------------------------------------------------------------------------------------------------------------

The new credit facility includes commitment fees on the unused portion of the total amount available, which fees range from 0.070% to 0.225% depending on
the credit rating of Cox Radios senior long-term debt. The new credit facility contains, among other provisions, specified leverage and interest coverage requirements, the terms of which are defined within the credit facility. At
December 31, 2006, Cox Radio was in compliance with these covenants. The credit facility also contains customary events of default, including, but not limited to, failure to pay principal or interest, failure to pay or acceleration of other
material debt, misrepresentation or breach of warranty, violation of certain covenants and change of control.

At December 31, 2006,
Cox Radio had $380 million of outstanding indebtedness under the new credit facility with $220 million available for borrowing. The interest rate applied to amounts due under the new credit facility was 6.0% at December 31, 2006. At
December 31, 2005, Cox Radio had approximately $155 million of outstanding indebtedness under the old facility with $345 million available for borrowing. The interest rate applied to amounts due under the old credit facility was 5.1% at
December 31, 2005. Since the interest rate under each credit facility was variable, the recorded balance of each credit facility approximated fair value. See Note 10 for a discussion of Cox Radios interest rate swap agreement.

In February 2005, Cox Radio agreed to guarantee the borrowings of a third party of up to $5 million to enable that party to purchase two stations and
assist Cox Radio in a signal upgrade project for one of its stations. This guarantee expires in February 2008. If the Cox Radio signal upgrade is approved by the FCC, then Cox Radio is likely to purchase the stations and performance under the
guarantee will not be necessary. If the signal upgrade is not approved, Cox Radios guarantee will be extinguished either through sale of the stations or through new financing arranged by the owner of the stations. Cox Radio believes that while
the value of the stations currently may be insufficient to repay the outstanding debt in full, any shortfall would be immaterial. At both December 31, 2006 and 2005, the carrying value of this guarantee was $0.4 million.

In January 2005, Cox Radio paid $2 million for an option to purchase five radio stations for $60 million. In October 2006, the related agreement was
amended to extend the period within which Cox Radio could exercise its option to purchase the stations by approximately one month, to January 31, 2008. In consideration for granting Cox Radio an exclusive three-year option, the option agreement
provides the sellers a right that is exercisable at two distinct times during the option term to provide notice requiring Cox Radio to elect whether or not to purchase the stations. While these rights are called put rights under the agreement,
exercise of these rights by the sellers does not obligate Cox Radio to purchase the stations. Rather, upon receiving notice from the sellers, if Cox Radio elects to not purchase the stations at that time, it must pay $5 million to the sellers. If
Cox Radio elects to acquire the stations at any time during the term of the agreement, the initial $2 million payment and any amounts previously paid by Cox Radio will be applied to the purchase price of the stations. During July 2006, the sellers
exercised their first put right, and Cox Radio paid the $5 million put refusal payment. Based on the facts and circumstances, Cox Radio determined that the sellers exercise of their second put right, which is exercisable in July 2007, was
probable and therefore accrued the $5 million second put refusal payment at June 30, 2006.

Cox Radio has an effective shelf
registration statement under which Cox Radio may from time to time offer and issue debentures, notes, bonds and other indebtedness and forward contracts in respect of any such indebtedness, shares of preferred stock, shares of Class A common
stock, warrants, stock purchase contracts, stock purchase units and stock purchase rights, and two financing trusts sponsored by Cox Radio may also offer and issue preferred securities of the trusts for an original maximum aggregate offering amount
of up to $300 million. Unless otherwise described in future prospectus supplements, Cox Radio intends to use the net proceeds from the sale of securities registered under this universal shelf registration statement for general corporate purposes,
which may include additions to working capital, the repayment or redemption of existing indebtedness and the financing of capital expenditures and acquisitions.

Cox Radio is a party to various legal proceedings that are ordinary and incidental to its business. Management does not expect that any of these currently pending legal proceedings will have a material adverse impact
on Cox Radios consolidated financial position, consolidated results of operations or cash flows.

Each of Cox Radios radio
stations operates pursuant to one or more licenses issued by the FCC that have a maximum term of eight years prior to renewal. Cox Radios FCC broadcast licenses expire at various times from 2011 to 2014. Although Cox Radio may apply to renew
its FCC broadcast licenses, third parties may challenge Cox Radios renewal applications. Cox Radio is not aware of any facts or circumstances that would prevent it from having its current licenses renewed. Since becoming a public company in
1996, the FCC has not denied any of Cox Radios license renewal applications.

Cox Radio leases land, office facilities and various
items of equipment. Rental expense under operating leases amounted to $10.0 million in 2006 and $10.4 million in 2005 and 2004.



47



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##### Table of Contents

Cox Radio also has various commitments under the following types of contracts: non-cancelable operating
leases; long-term debt; interest payments on long-term debt; and other purchase commitments, including contracts for sports programming and on-air personalities. The aggregate minimum annual commitments associated with these contracts as of
December 31, 2006 were as follows:



|                              |  |                        |         |      |   |               |  |               |        |            |   |         |  |   |       
|----------------------------- |  | ---------------------- | ------- | ---- | - | ------------- |  | ------------- | ------ | ---------- | - | ------- |  | - | ------
|                              |  | Payments Due by Period
|                              |  | Total                  |         | 2007 |   | 2008 and 2009 |  | 2010 and 2011 |        | After 2011
|                              |  | (Amounts in thousands)
|Operating leases              |  | $                      | 40,410  |      | $ | 6,774         |  | $             | 11,109 |            | $ | 8,356   |  | $ | 14,171
|Capital leases                |  |                        | 300     |      |   | 114           |  |               | 146    |            |   | 40      |  |   |      
|Long-term debt(1)             |  |                        | 380,000 |      |   |              |  |               |       |            |   | 380,000 |  |   |      
|Interest on long-term debt(2) |  |                        | 67,031  |      |   | 22,991        |  |               | 36,619 |            |   | 7,421   |  |   |      
|Purchase commitments          |  |                        | 90,493  |      |   | 48,029        |  |               | 35,325 |            |   | 5,674   |  |   | 1,465 
|                              |  |                        |         |      |   |               |  |               |        |            |   |         |  |   |       
|Total                         |  | $                      | 578,234 |      | $ | 77,908        |  | $             | 83,199 |            | $ | 401,491 |  | $ | 15,636
|                              |  |                        |         |      |   |               |  |               |        |            |   |         |  |   |       

---

|(1) | Consists of $380 million outstanding at December 31, 2006 under the credit facility and assumes this facility will be repaid and not refinanced at or prior to expiration in
2011.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | These amounts represent estimated future cash interest payments related to the credit facility based on the variable rate specified under its credit agreement, including the impact
of our interest rate swap agreement. Future interest payments could differ materially from amounts indicated in the table due to future operational and financing needs, market factors and other currently unanticipated events.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10. Derivative Instruments and Hedging Activities

Cox Radio is exposed to fluctuations in interest rates. Cox Radio actively monitors these fluctuations and uses derivative instruments from time to time to manage such risk. In accordance with its risk management
strategy, Cox Radio uses derivative instruments only for the purpose of managing risk associated with an asset, liability, committed transaction or probable forecasted transaction that is identified by management. Cox Radios use of derivative
instruments may result in short-term gains or losses and may increase volatility in its earnings.

At December 31, 2006, Cox Radio had
a single interest rate swap agreement with a $25 million notional principal amount, an annual fixed rate of 6.4% and a September 30, 2007 maturity date outstanding. This agreement is used to manage Cox Radios exposure to the variability
of future cash flows related to certain of its floating rate interest obligations that may result due to changes in interest rates. The counterparty to this interest rate swap agreement is a major financial institution. Cox Radio is exposed to
credit loss in the event of nonperformance by this counterparty. However, Cox Radio does not anticipate nonperformance by this counterparty. The estimated fair value of the swap agreement, based on current market rates, approximated a net payable of
$0.2 million and $0.7 million at December 31, 2006 and 2005, respectively. The fair value of the swap agreement at December 31, 2006 is included in other current liabilities according to the maturity date of the swap.

Under SFAS No. 133, as amended, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 137,
Accounting for Derivative Instruments and Hedging ActivitiesDeferral of the Effective Date of SFAS No. 133, SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, and SFAS
No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, the accounting for changes in the fair values of derivative instruments at each new measurement date is dependent upon their intended use. The
effective portion of changes in the fair values of derivative instruments designated as hedges of forecasted transactions, referred to as cash flow hedges, are deferred and recorded as a component of accumulated other comprehensive income until the
hedged forecasted transactions occur and are recognized in earnings. The ineffective portion of changes in the fair values of derivative instruments designated as cash flow hedges are immediately reclassified to earnings. The differential paid or
received on the interest rate swap agreement is recognized as an adjustment to interest expense. Cox Radios interest rate swap agreement qualifies as a cash flow hedge.

During the year ended December 31, 2006, changes in fair value of the interest rate swap agreement resulted in a $0.4 million credit to interest
expense, before related tax effects, due to the ineffectiveness of this cash flow hedge. For the years ended December 31, 2005 and 2004, there was no ineffective portion related to the changes in fair values of the interest rate swap
agreements. There were no amounts excluded from the measure of effectiveness for any of the periods. The balance of $0.4 million recorded in accumulated other comprehensive income at December 31, 2006 is expected to be reclassified into future
earnings, contemporaneously with and offsetting changes in interest expense on certain of Cox Radios floating rate interest obligations. The estimated amount to be reclassified into future earnings as interest expense over the nine months
ending September 30, 2007 is less than $0.1 million, before related income tax effects. The actual amount that will be reclassified to future earnings over the next nine months, until maturity, may vary from this amount as a result of changes
in market conditions related to interest rates.

11. Retirement Plans

Eligible Cox Radio employees participate in the funded, noncontributory defined benefit pension plan of Cox Enterprises and certain key employees participate in an unfunded, non-qualified supplemental pension plan.
The plans call for benefits to be paid to eligible employees at retirement based primarily upon years of service with Cox Radio or affiliated companies and compensation rates during those years. Cox Enterprises uses a measurement date of
December 31 for its pension and postretirement benefit plans.



48



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##### Table of Contents

Weighted-Average Assumptions

The following table sets forth the weighted-average assumptions used to determine benefit obligations:



|                              |  |                   |   |  |                   |   |  |                 |   |  |               |  
|----------------------------- |  | ----------------- | - |  | ----------------- | - |  | --------------- | - |  | ------------- | -
|                              |  | December 31, 2006 |   |  | December 31, 2005 |  
|                              |  | PensionBenefits   |   |  | OtherBenefits     |   |  | PensionBenefits |   |  | OtherBenefits |  
|Discount rate                 |  | 6.00              | % |  | 6.00              | % |  | 5.75            | % |  | 5.75          | %
|Rate of compensation increase |  | 5.30              | % |  | 5.30              | % |  | 4.00            | % |  | 4.00          | %

The following table sets forth the weighted-average assumptions used to determine net periodic
benefit cost:



|                                         |  |                         |   |  |               |   |  |                 |   |  |               |   |  |                 |   |  |               |  
|---------------------------------------- |  | ----------------------- | - |  | ------------- | - |  | --------------- | - |  | ------------- | - |  | --------------- | - |  | ------------- | -
|                                         |  | Year ended December 31, |  
|                                         |  | 2006                    |   |  | 2005          |   |  | 2004            |  
|                                         |  | PensionBenefits         |   |  | OtherBenefits |   |  | PensionBenefits |   |  | OtherBenefits |   |  | PensionBenefits |   |  | OtherBenefits |  
|Discount rate                            |  | 5.75                    | % |  | 5.75          | % |  | 6.00            | % |  | 5.75          | % |  | 6.25            | % |  | 6.25          | %
|Rate of compensation increase            |  | 5.30                    | % |  | 5.30          | % |  | 4.25            | % |  | 4.00          | % |  | 4.00            | % |  | N/A           |  
|Expected long-term return on plan assets |  | 9.00                    | % |  | 9.00          | % |  | 9.00            | % |  | 9.00          | % |  | 9.00            | % |  | 9.00          | %

Cox Enterprises Pension Plan

The following table sets forth certain information attributable to Cox Radio employees participation in the Cox Enterprises pension plans:



|                                                |  |                        |        |                   |   |              |  |                |        |  |   |       
|----------------------------------------------- |  | ---------------------- | ------ | ----------------- | - | ------------ |  | -------------- | ------ |  | - | ------
|                                                |  | December 31, 2006      |        | December 31, 2005
|                                                |  | Funded Plans           |        | Unfunded Plans    |   | Funded Plans |  | Unfunded Plans
|                                                |  | (Amounts in thousands)
|Actuarial present value of benefit obligations: |  |                        |        |                   |   |              |  |                |        |  |   |       
|Vested benefits                                 |  | $                      | 35,062 |                   | $ | 7,179        |  | $              | 33,453 |  | $ | 6,344 
|Nonvested benefits                              |  |                        | 1,158  |                   |   | 363          |  |                | 1,036  |  |   | 416   
|                                                |  |                        |        |                   |   |              |  |                |        |  |   |       
|Accumulated benefit obligations                 |  | $                      | 36,220 |                   | $ | 7,542        |  | $              | 34,489 |  | $ | 6,760 
|                                                |  |                        |        |                   |   |              |  |                |        |  |   |       
|Projected benefit obligations                   |  | $                      | 39,725 |                   | $ | 10,274       |  | $              | 37,910 |  | $ | 10,613
|                                                |  |                        |        |                   |   |              |  |                |        |  |   |       

Pension expense allocated to Cox Radio related to the plans was $1.1 million, $1.2 million and
$1.1 million for the years ended December 31, 2006, 2005 and 2004, respectively.

Prior to January 1, 2007, only retirees and
employees of Cox Radio who were employed on or before December 31, 1996 were eligible to participate in the defined benefit pension plan. In December 2006, the Cox Radio Board of Directors approved expanded participation in the plan so that,
effective January 1, 2007, all remaining eligible employees will participate in both the pension plan and post-retirement health care plan on a prospective basis.

Cox Enterprises Postretirement Benefits

Cox Enterprises provides certain health care and life
insurance benefits to substantially all retirees of Cox Enterprises and certain of its subsidiaries, including Cox Radio. Cox Radios actuarial present value of accumulated postretirement benefit obligations at December 31, 2006 and 2005
was $5.2 million and $5.5 million, respectively.

The funded status of the portion of the plan providing postretirement benefits covering
the employees of Cox Radio is not determinable. The actuarial present value of postretirement benefit obligations for the postretirement benefits plan of Cox Enterprises exceeded the fair value of assets held in the plan at December 31, 2006
and 2005.



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For the postretirement welfare plan, the assumed health care cost trend rate for retirees is 9.0% (10.0%
in 2005). This rate is assumed to decrease gradually to 5.0% by year 2011 and remain level thereafter. Increasing the assumed health care cost trend rate by one percentage point would have resulted in an increase in the Cox Enterprises plans
actuarial present value of benefit obligations of approximately 2.0% and an increase in the aggregate of the service cost and interest cost components of the net periodic postretirement benefit cost of approximately 1.0% for 2006. Decreasing the
assumed health care cost trend rate by one percentage point would have resulted in a decrease in the Cox Enterprises plans actuarial present value of benefit obligations of approximately 1.8% and a decrease in the aggregate of the service cost
and interest cost components of the net periodic postretirement benefit cost of approximately 0.9% for 2006.

Prior to January 1,
2007, only retirees and employees of Cox Radio who were employed on or before December 31, 1996 were eligible to participate in the post-retirement healthcare plan. In December 2006, the Cox Radio Board of Directors approved expanded
participation in the plan so that, effective January 1, 2007, all remaining eligible employees will participate in both the pension plan and post-retirement health care plan on a prospective basis.

Cox Enterprises Savings and Investment Plan

In
addition, substantially all of Cox Radios employees are eligible to participate in the savings and investment plan of Cox Enterprises. Cox Radio offers a $0.50 match on each dollar of employee contributions up to 6%, for a maximum match of 3%
of eligible wages. Cox Radios expense under the plan was $2.4 million, $2.3 million and $2.1 million for the years ended December 31, 2006, 2005 and 2004, respectively.

Other Retirement Plans

Certain Cox Radio employees, whose savings and investment plan contributions
are at the IRS maximum or are restricted in order to pass the IRS nondiscrimination test, were eligible to participate in Cox Enterprises non-qualified savings restoration plan through December 31, 2004. Under the terms of this plan, Cox
Radio matched a discretionary contribution amount no greater than 50% of employee contributions to both the savings and investment and restoration plans up to a specified maximum percentage of the employees eligible compensation. Effective
January 1, 2005, Cox Radio established a separate non-qualified savings restoration plan covering the Cox Radio employees who previously participated in the Cox Enterprises plan. The provisions of the Cox Radio non-qualified savings restoration
plan are substantially similar to the features of the Cox Enterprises plan. Cox Radios expense under the non-qualified savings restoration plan was not material to the financial statements for any period presented.

12. Stock-Based Compensation Plans

During the year
ended December 31, 2006, Cox Radio had three stock-based employee compensation plans, the LTIP and two ESPPs. The 2004 ESPP terminated during the first quarter of 2006 and shares were issued under this plan effective March 31, 2006. In
July 2006, payroll deductions began for employees participating in the new 2006 ESPP. As discussed in Note 2, prior to January 1, 2006, Cox Radio would have accounted for these plans under the recognition and measurement provisions of APB 25
and related interpretations. Effective January 1, 2006, Cox Radio adopted the fair value recognition provisions of SFAS No. 123R using the modified-prospective transition method. The compensation cost charged against income for those plans
was $0.4 million and $1.6 million for the three-months and year ended December 31, 2006, respectively, and $0.1 million and $0.4 million for the three-months and year ended December 31, 2005, respectively. The total income tax benefit
recognized in the income statement for share-based compensation arrangements was $0.1 million and $0.5 million for the three-months and year ended December 31, 2006, respectively, and $0.1 million and $0.2 million for the three-months and year
ended December 31, 2005, respectively. Total cash received from options exercised during the years ended December 31, 2006 and 2005 was $3.4 million and $0.1 million, respectively. Specific information regarding each plan is presented
below.

Cox Radio Employee Stock Purchase Plans

During 2006, Cox Radio adopted the 2006 ESPP under which Cox Radio is authorized to issue purchase rights totaling 500,000 shares of Class A common stock. The 2006 ESPP has four alternate entry dates: July 1,
2006, January 1, 2007, July 1, 2007 and January 1, 2008. Employees are eligible to participate in the 2006 ESPP as of the first entry date on which they are employed and regularly scheduled to work at least 20 hours per
week. Under the terms of the 2006 ESPP, the purchase price is the lesser of 85% of the fair market value of the Class A common stock on the grant date (the initial purchase price) or 90% of the fair market value of the Class A common stock
on June 30, 2008, the end of the 2006 ESPP. The initial purchase price was set at $10.97 and $13.69 for the first and second entry dates, respectively. Purchase rights totaling 159,201 shares and 5,888 shares of Class A common stock were
issued under the 2006 ESPP with respect to the first and second entry dates, respectively. Employees are allowed to purchase the shares via payroll deduction through June 30, 2008, at which time shares will be issued to the remaining 2006 ESPP
participants. During 2006, 170 shares were issued under the 2006 ESPP due to cancellation of employees participation or termination of employment.



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During 2004, Cox Radio adopted the 2004 ESPP under which Cox Radio was authorized to issue purchase
rights totaling 600,000 shares of Class A common stock. The 2004 ESPP had four alternate entry dates: April 1, 2004, October 1, 2004, April 1, 2005, and October 1, 2005. Employees were eligible to participate in
the 2004 ESPP as of the first entry date on which they were employed and were regularly scheduled to work at least 20 hours per week. Under the terms of the 2004 ESPP, the purchase price is the lesser of 85% of the fair market value of the
Class A common stock on the grant date (the initial purchase price) or 90% of the fair market value of the Class A common stock on March 31, 2006, the end of the 2004 ESPP. The initial purchase price was set at $20.85, $14.83, $13.55
and $13.59 for the first, second, third, and fourth entry dates, respectively. Purchase rights totaling 148,783 shares, 8,311 shares, 4,747 shares and 1,280 shares of Class A common stock were issued under the 2004 ESPP with respect to the
first, second, third, and fourth entry dates, respectively. Employees were allowed to purchase the shares via payroll deduction through March 31, 2006, at which time 153,124 shares were issued to the remaining 2004 ESPP participants. During
2006, 2005 and 2004, 187, 497 and 200 shares, respectively, were issued under the 2004 ESPP due to cancellation of employees participation or termination of employment.

The fair value of the employees purchase rights granted under the 2006 ESPP and the 2004 ESPP was determined using the Black-Scholes model with the
following assumptions as of the enrollment dates listed below:



|                                |  |                  |           |   |             |   |           |  
|------------------------------- |  | ---------------- | --------- | - | ----------- | - | --------- | -
|                                |  | November 1, 2006 |           |   | May 1, 2006 |  
|Risk-free interest rate         |  |                  | 4.85      | % |             |   | 5.16      | %
|Expected life                   |  |                  | 1.5 years |   |             |   | 2.0 years |  
|Expected stock price volatility |  |                  | 24.00     | % |             |   | 22.50     | %
|Expected dividend yield         |  |                  | n/a       |   |             |   | n/a       |  
|Fair value at enrollment date   |  | $                | 4.52      |   |             | $ | 4.22      |  



|                                |  |                |           |   |                  |   |           |                |  |   |                  |   |  |   |           |  
|------------------------------- |  | -------------- | --------- | - | ---------------- | - | --------- | -------------- |  | - | ---------------- | - |  | - | --------- | -
|                                |  | August 1, 2005 |           |   | February 1, 2005 |   |           | August 1, 2004 |  |   | January 15, 2004 |  
|Risk-free interest rate         |  |                | 3.77      | % |                  |   | 3.35      | %              |  |   | 2.20             | % |  |   | 1.61      | %
|Expected life                   |  |                | 0.5 years |   |                  |   | 1.0 years |                |  |   | 1.5 years        |   |  |   | 2.0 years |  
|Expected stock price volatility |  |                | 22.47     | % |                  |   | 25.59     | %              |  |   | 32.90            | % |  |   | 33.15     | %
|Expected dividend yield         |  |                | n/a       |   |                  |   | n/a       |                |  |   | n/a              |   |  |   | n/a       |  
|Fair value at enrollment date   |  | $              | 2.49      |   |                  | $ | 4.36      |                |  | $ | 3.79             |   |  | $ | 5.93      |  

Cox Radio Amended and Restated Long-Term Incentive Plan

Pursuant to the LTIP, executive officers and certain employees of Cox Radio who have been selected as participants are eligible to receive awards of
various forms of equity-based incentive compensation, including stock options, stock appreciation rights, stock bonuses, restricted stock awards, performance-based restricted stock awards, performance shares and awards consisting of combinations of
such incentives. Cox Radio has reserved 13,200,000 shares of Class A common stock for issuance under the LTIP.

Subject to the maximum
shares reserved under the LTIP, no individual may receive a stock option covering more than 500,000 shares of Class A common stock in any year nor be granted more than 250,000 shares of Class A common stock, in any combination of
performance awards, restricted stock or other stock-based awards that are subject to performance criteria in any year. The maximum payout for any individual for a performance award paid in cash is 300% of his or her base salary as of the beginning
of the year of the performance award payment.

Awards of performance-based restricted stock are dependent upon the achievement of
pre-established performance criteria. Once granted, performance-based restricted stock awards normally become 100% vested five years after the date of grant. As long as the recipient is employed by Cox Radio or its affiliates, 60% of the shares
obtained through performance-based restricted stock awards will remain restricted from resale or transfer.

Options granted under the LTIP
normally vest 60% after three years from the date of grant, 80% after four years from the date of grant and 100% after five years from the date of grant and expire ten years from the date of grant. An accelerated vesting schedule has been provided
such that the options become fully vested if the market value of the shares exceeds the exercise price by 140% for ten consecutive trading days. On October 31, 2005, the Compensation Committee of the Board of Directors approved the acceleration
of the vesting of all of Cox Radios unvested out of the money stock options granted under its LTIP from January 2001 through October 31, 2005. However, the Compensation Committee left the exercise date and all other terms of
the awards unchanged. The purpose of accelerating the vesting of these options was to allow Cox Radio to avoid recognition of compensation expense associated with these options in future periods as the exercise prices exceeded the market value of
the underlying stock on October 31, 2005.

The fair value of stock options granted during 2005 and 2004 (there were no options granted
during 2006) was estimated on the date of grant using the Black-Scholes model with the following assumptions:



|                                |  |            |         |   |      |   |         |  
|------------------------------- |  | ---------- | ------- | - | ---- | - | ------- | -
|                                |  | Grant Date |        
|                                |  | 2005       |         |   | 2004 |  
|Risk-free interest rate         |  |            | 4.33    | % |      |   | 3.15    | %
|Expected life                   |  |            | 6 years |   |      |   | 6 years |  
|Expected stock price volatility |  |            | 25.58   | % |      |   | 33.15   | %
|Expected dividend yield         |  |            | n/a     |   |      |   | n/a     |  
|Fair value at grant date        |  | $          | 5.92    |   |      | $ | 8.10    |  



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Expected volatility noted above is based on the closing monthly stock prices for the most recent 36
months prior to grant. Cox Radio uses historical data to estimate option exercise and employee termination within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for
valuation purposes. The expected term represents the period of time that options granted are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant with maturity corresponding to the
expected term of option.

A summary of the status of Cox Radios stock options granted under the LTIP as of December 31, 2006 and
changes during the year is presented below:



|                                 |  |           |   |  |                                 |       |                                          |           |                          |   |        
|-------------------------------- |  | --------- | - |  | ------------------------------- | ----- | ---------------------------------------- | --------- | ------------------------ | - | -------
|                                 |  | Shares    |   |  | Weighted Average Exercise Price |       | WeightedAverageRemainingContractual Life |           | AggregateIntrinsic Value
|Outstanding at beginning of year |  | 7,263,875 |   |  | $                               | 21.18 |                                          |           |                          |   |        
|Granted                          |  |          |   |  |                                 |      |                                          |           |                          |   |        
|Exercised                        |  | (315,948  | ) |  |                                 | 8.47  |                                          |           |                          |   |        
|Forfeited                        |  | (421,003  | ) |  |                                 | 21.31 |                                          |           |                          |   |        
|                                 |  |           |   |  |                                 |       |                                          |           |                          |   |        
|Outstanding at end of year       |  | 6,526,924 |   |  | $                               | 21.78 |                                          | 5.8 years |                          | $ | 591,884
|                                 |  |           |   |  |                                 |       |                                          |           |                          |   |        
|Options exercisable at year-end  |  | 3,591,792 |   |  | $                               | 23.34 |                                          | 4.6 years |                          | $ | 591,884
|                                 |  |           |   |  |                                 |       |                                          |           |                          |   |        

The weighted-average grant date fair value of options granted during 2005 and 2004 was $5.92 and
$8.10, respectively. There were no options granted during 2006. The total intrinsic value of options exercised during the years ended December 31, 2006, 2005 and 2004, was $2.1 million, less than $0.1 million and $0.5 million, respectively.

A summary of the status of Cox Radios restricted stock granted under the LTIP as of December 31, 2006, and changes during the
year then ended is presented below:



|                                       |  |         |   |  |                                       |      
|-------------------------------------- |  | ------- | - |  | ------------------------------------- | -----
|                                       |  | Shares  |   |  | Weighted Average Grant-DateFair
Value
|Restricted shares at beginning of year |  | 205,556 |   |  | $                                     | 19.79
|Granted                                |  | 279,511 |   |  |                                       | 13.17
|Vested                                 |  | (7,872  | ) |  |                                       | 21.92
|Forfeited                              |  | (19,728 | ) |  |                                       | 16.87
|                                       |  |         |   |  |                                       |      
|Restricted shares at end of year       |  | 457,467 |   |  | $                                     | 15.83
|                                       |  |         |   |  |                                       |      

As of December 31, 2006, there was $3.3 million of total unrecognized compensation cost
related to restricted stock compensation arrangements. This cost is expected to be recognized over a weighted-average period of 3.5 years, as the awards vest. The total fair value of shares vested during the year ended December 31, 2006 was
$0.1 million. The total fair value of shares vested during each of the years ended December 31, 2005 and 2004 was less than $0.1 million.

13.
Transactions with Affiliated Companies

Cox Radio receives certain management services from, and has entered into certain transactions
with, Cox Enterprises. Costs of the management services that are allocated to Cox Radio are based on actual direct costs incurred or on Cox Enterprises estimate of expenses relative to the management services provided to other subsidiaries of
Cox Enterprises. Cox Radio believes that these allocations were made on a reasonable basis and that receiving these management services from Cox Enterprises creates cost efficiencies, however, there has been no study or any attempt to obtain quotes
from third parties to determine what the cost of obtaining such management services from third parties would have been. The management services and transactions described below have been reviewed by Cox Radios Audit Committee, which has
determined that such management services and transactions are fair and in the best interest of Cox Radio.

Cox Radio receives day-to-day
cash management services from Cox Enterprises, with settlements of outstanding balances between Cox Radio and Cox Enterprises occurring periodically at market interest rates. As a part of these services, Cox Enterprises transfers funds to cover Cox
Radios checks presented for payment and Cox Radio records a book overdraft, which is classified as accounts payable in the accompanying balance sheets. Book overdrafts of $4.1 million and $5.4 million existed at December 31, 2006 and
2005,



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respectively, as a result of Cox Radios checks outstanding. The amounts due to or from Cox Enterprises are generally due on demand and represent the
net balance of the intercompany transactions. Amounts due to and from Cox Enterprises accrue interest at Cox Enterprises current commercial paper borrowing rate or a LIBOR based rate (5.6% and 4.7% at December 31, 2006 and 2005,
respectively), dependent upon Cox Radios credit rating. Cox Enterprises owed Cox Radio approximately $2.0 million at December 31, 2006 and Cox Radio owed Cox Enterprises approximately $9.9 million at December 31, 2005.

Cox Radio receives certain management services from Cox Enterprises and its wholly-owned subsidiary, Cox Broadcasting, including management and financial
advisory services, legal, corporate secretarial, tax, internal audit, risk management, purchasing and materials management, employee benefit (including pension plan) administration, fleet, engineering and other support services. Expenses allocated
for these services are included in corporate general and administrative expenses in the Consolidated Statements of Income. Cox Radio was allocated expenses for the years ended December 31, 2006, 2005 and 2004 of approximately $3.2 million, $3.3
million and $3.4 million, respectively, related to these services.

In connection with these management services, Cox Radio reimburses Cox
Enterprises for payments made to third-party vendors for certain goods and services provided to Cox Radio under arrangements made by Cox Enterprises on behalf of Cox Enterprises and its affiliates, including Cox Radio. Cox Radio believes such
arrangements result in Cox Radio receiving such goods and services at more attractive pricing than Cox Radio would be able to secure separately. Such reimbursed expenditures include insurance premiums for coverage through Cox Enterprises
insurance program, which provides coverage for all of its affiliates, including Cox Radio. Rather than self-insuring these risks, Cox Enterprises purchases insurance for a fixed-premium cost from several insurance companies, including an insurance
company indirectly owned by descendants of Governor James M. Cox, the founder of Cox Enterprises, including James C. Kennedy, Chairman of Cox Radios Board of Directors, and his sister, who each own 25%. This insurance company is an insurer and
re-insurer on various insurance policies purchased by Cox Enterprises, and it employs an independent consulting actuary to calculate the annual premiums for general/auto liability and workers compensation insurance based on Cox Radios loss
experience, consistent with insurance industry practice. Cox Radios portion of these insurance costs was approximately $0.7 million, $0.6 million and $0.5 million for the years ended December 31, 2006, 2005 and 2004, respectively.

Cox Radios employees participate in certain Cox Enterprises employee benefit plans, and Cox Radio made payments to Cox Enterprises
in 2006 for the costs incurred because of such participation, including self-insured employee medical insurance costs of approximately $10.5 million, retiree medical payments of approximately $0.1 million, postemployment benefits of approximately
$0.7 million and executive pension plan payments of approximately $1.1 million. Costs incurred for these items in 2005 and 2004 were self-insured employee medical insurance costs of approximately $9.3 million and $9.0 million, respectively; retiree
medical payments of approximately $0.1 million and $0.1 million, respectively; postemployment benefits of approximately $0.7 million and $0.6 million, respectively; and executive pension plan payments of approximately $1.2 million and $1.1 million,
respectively.

Cox Radios headquarters building is leased by Cox Enterprises from a partnership that in turn is indirectly owned by
descendents of Governor James M. Cox, the founder of Cox Enterprises, with an indirect 36% interest held in the aggregate by the children of James C. Kennedy, Chairman of Cox Radios Board of Directors, and an indirect less than 3% interest
held in the aggregate by Mr. Kennedy, his mother and his sister. Cox Radio pays rent and certain other occupancy costs to Cox Enterprises for space in Cox Enterprises corporate headquarters building. Rent and occupancy expense is
allocated based on occupied space. Related rent and occupancy expense was approximately $0.8 million, $0.7 million and $0.6 million for the years ended December 31, 2006, 2005 and 2004, respectively.

Cox Radio has entered into lease agreements with Cox Broadcasting with respect to studio and tower site properties in Atlanta, Georgia, Dayton, Ohio and
Orlando, Florida that are used for Cox Radios radio operations in those markets. The annual rental cost in the aggregate was approximately $0.7 million, $0.7 million and $0.6 million for the years ended December 31, 2006, 2005 and 2004,
respectively.

Cox Radio has estimated that the carrying value of advances approximates fair value, given the short-term nature of these
advances.

Included in the amounts due from (to) Cox Enterprises are the following transactions:



|                                                     |  |                        |          |  
|---------------------------------------------------- |  | ---------------------- | -------- | -
|                                                     |  | (Amounts in thousands) |         
|Due from Cox Enterprises, December 31, 2003          |  | $                      | 6,284    |  
|                                                     |  |                        |          |  
|Cash transferred to Cox Enterprises                  |  |                        | 419,590  |  
|Acquisitions                                         |  |                        | (681     | )
|Payments on revolver                                 |  |                        | (60,000  | )
|Net operating expense allocations and reimbursements |  |                        | (358,620 | )
|                                                     |  |                        |          |  
|                                                     | 
|Due from Cox Enterprises, December 31, 2004          |  |                        | 6,573    |  
|                                                     |  |                        |          |  
|Cash transferred to Cox Enterprises                  |  |                        | 440,431  |  
|Acquisitions                                         |  |                        | (4,000   | )
|Borrowings on revolver                               |  |                        | 30,000   |  
|Repayment of 6.375% notes                            |  |                        | (100,000 | )
|Repurchase of Class A common stock                   |  |                        | (39,620  | )
|Net operating expense allocations and reimbursements |  |                        | (343,282 | )
|                                                     | 
|Due to Cox Enterprises, December 31, 2005            |  |                        | (9,898   | )
|                                                     |  |                        |          |  
|Cash transferred to Cox Enterprises                  |  |                        | 433,612  |  
|Acquisitions                                         |  |                        | (7,688   | )
|Borrowings on revolver                               |  |                        | 225,000  |  
|Repayment of 6.625% notes                            |  |                        | (250,000 | )
|Repurchase of Class A common stock                   |  |                        | (45,227  | )
|Net operating expense allocations and reimbursements |  |                        | (343,819 | )
|                                                     |  |                        |          |  
|Due from Cox Enterprises, December 31, 2006          |  | $                      | 1,980    |  
|                                                     |  |                        |          |  



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Cox Search, Inc., a wholly-owned subsidiary of Cox Enterprises, from time to time purchases radio
advertising from Cox Radios Atlanta radio stations at regular commercial rates. For the years ended December 31, 2006 and 2005, the amount purchased was $0.6 million and $0.3 million, respectively.

14. Supplemental Cash Flow Information



|                                  |  |                        |        |      |   |        |  |   |       
|--------------------------------- |  | ---------------------- | ------ | ---- | - | ------ |  | - | ------
|                                  |  | 2006                   |        | 2005 |   | 2004  
|                                  |  | (Amounts in thousands)
|Additional cash flow information: |  |                        |        |      |   |        |  |   |       
|Cash paid for interest            |  | $                      | 31,132 |      | $ | 28,087 |  | $ | 30,055
|Cash paid for income taxes        |  |                        | 24,517 |      |   | 29,942 |  |   | 51,463

15. Unaudited Quarterly Financial Information

The following table sets forth selected quarterly financial information for Cox Radio. This information is derived from Cox Radios unaudited
financial statements included in its Form 10-Q filings and includes, in Cox Radios opinion, only normal and recurring adjustments that it considers necessary for a fair presentation of the results for such periods. The operating results for
any quarter are not necessarily indicative of results for that year or any future period.



|                                                                          |  |                                               |        |   |             |   |             |  |             |         |  |   |          |  
|------------------------------------------------------------------------- |  | --------------------------------------------- | ------ | - | ----------- | - | ----------- |  | ----------- | ------- |  | - | -------- | -
|                                                                          |  | 1st Quarter                                   |        |   | 2nd Quarter |   | 3rd Quarter |  | 4th Quarter |        
|                                                                          |  | (Amounts in thousands, except per share data) |       
|2006 Net revenues                                                         |  | $                                             | 97,606 |   |             | $ | 117,151     |  | $           | 112,663 |  | $ | 113,048  |  
|Cost of services (exclusive of depreciation and amortization shown below) |  |                                               | 21,016 |   |             |   | 20,956      |  |             | 22,011  |  |   | 22,457   |  
|Selling, general and administrative                                       |  |                                               | 39,320 |   |             |   | 47,623      |  |             | 41,925  |  |   | 42,498   |  
|Corporate general and administrative expenses                             |  |                                               | 5,140  |   |             |   | 5,495       |  |             | 5,079   |  |   | 4,155    |  
|Depreciation and amortization                                             |  |                                               | 2,642  |   |             |   | 2,666       |  |             | 2,716   |  |   | 3,171    |  
|Impairment of intangible assets(1)                                        |  |                                               |       |   |             |   |            |  |             |        |  |   | 176,333  |  
|Other operating expenses, net                                             |  |                                               | 79     |   |             |   | 271         |  |             | 18      |  |   | 426      |  
|                                                                          |  |                                               |        |   |             |   |             |  |             |         |  |   |          |  
|Operating income (loss)                                                   |  | $                                             | 29,409 |   |             | $ | 40,140      |  | $           | 40,914  |  | $ | (135,992 | )
|Net income (loss)                                                         |  |                                               | 13,983 |   |             |   | 25,668      |  |             | 23,951  |  |   | (88,049  | )
|                                                                          |  |                                               |        |  
|Net income (loss) per common share  basic                                |  | $                                             | 0.14   |   |             | $ | 0.27        |  | $           | 0.25    |  | $ | (0.93    | )
|Net income (loss) per common share  diluted                              |  |                                               | 0.14   |   |             |   | 0.27        |  |             | 0.25    |  |   | (0.93    | )
|                                                                          |  |                                               |        |  
|2005 Net revenues                                                         |  | $                                             | 98,569 |   |             | $ | 117,253     |  | $           | 113,235 |  | $ | 108,873  |  
|Cost of services (exclusive of depreciation and amortization shown below) |  |                                               | 22,341 |   |             |   | 20,546      |  |             | 21,331  |  |   | 22,034   |  
|Selling, general and administrative                                       |  |                                               | 39,292 |   |             |   | 46,648      |  |             | 41,415  |  |   | 42,462   |  
|Corporate general and administrative expenses                             |  |                                               | 4,707  |   |             |   | 5,043       |  |             | 5,124   |  |   | 4,565    |  
|Depreciation and amortization                                             |  |                                               | 2,848  |   |             |   | 2,853       |  |             | 2,811   |  |   | 2,733    |  
|Impairment of intangible assets(2)                                        |  |                                               |       |   |             |   |            |  |             |        |  |   | 14,351   |  
|Other operating expenses, net                                             |  |                                               | (140   | ) |             |   | 14          |  |             | 56      |  |   | 57       |  
|                                                                          |  |                                               |        |   |             |   |             |  |             |         |  |   |          |  
|Operating income                                                          |  | $                                             | 29,521 |   |             | $ | 42,149      |  | $           | 42,498  |  | $ | 22,671   |  
|Net income                                                                |  |                                               | 13,765 |   |             |   | 20,594      |  |             | 21,457  |  |   | 5,457    |  
|                                                                          |  |                                               |        |  
|Net income per common share  basic                                       |  | $                                             | 0.14   |   |             | $ | 0.20        |  | $           | 0.21    |  | $ | 0.06     |  
|Net income per common share  diluted                                     |  |                                               | 0.14   |   |             |   | 0.20        |  |             | 0.21    |  |   | 0.05     |  

---

|(1) | A charge of $176.3 million ($109.2 million after-tax or $1.15 per diluted share) related to write-down of impaired intangible assets.
|--- | -------------------------------------------------------------------------------------------------------------------------------------

|(2) | A charge of $14.4 million ($13.4 million after-tax or $0.14 per diluted share) related to write-down of impaired goodwill.
|--- | --------------------------------------------------------------------------------------------------------------------------



|ITEM 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|------- | ------------------------------------------------------------------------------------

None.



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|ITEM 9A. | Controls and Procedures
|-------- | -----------------------

Evaluation of Controls and Procedures

The Chief Executive Officer and the Chief Financial Officer of Cox Radio (its principal executive officer and principal financial officer, respectively)
have concluded, based on their evaluation as of December 31, 2006, the end of the fiscal quarter to which this report relates, that Cox Radios disclosure controls and procedures: are effective to ensure that information required to be
disclosed by Cox Radio in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms; and include
controls and procedures designed to ensure that information required to be disclosed by Cox Radio in such reports is accumulated and communicated to Cox Radios management, including the Chief Executive Officer and the Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosure. Cox Radios disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching Cox Radios desired disclosure objectives and are
effective in reaching that level of reasonable assurance.

Changes in Internal Controls

There were no changes in Cox Radios internal control over financial reporting during the period covered by this report that materially affected, or
were reasonably likely to materially affect, Cox Radios internal control over financial reporting.

Managements Report on Internal Control
Over Financial Reporting

Managements report on internal control over financial reporting and the attestation report of Cox
Radios independent auditors are included in Cox Radios financial statements under the captions entitled Managements Report on Internal Control Over Financial Reporting and Report of Independent Registered Public
Accounting Firm and are incorporated herein by this reference.



|ITEM 9B. | Other Information
|-------- | -----------------

None.

PART III



|ITEM 10. | Directors and Executive Officers
|-------- | --------------------------------

The information required by this Item is
incorporated by reference to Cox Radios Proxy Statement for the 2007 Annual Meeting of Shareholders.

Cox Radios Class A
common stock is listed on the New York Stock Exchange (NYSE). The NYSE requires the Chief Executive Officer of each listed company to certify to the NYSE annually, after the companys annual meeting of stockholders, that his or her company is
in compliance with the NYSEs corporate governance listing standards. In accordance with the NYSEs procedures, on May 4, 2006, Robert F. Neil, Cox Radios President and Chief Executive Officer, certified to the NYSE that he was
unaware of any violation of the NYSEs corporate governance listing standards. Additionally, as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 2006, Cox Radio has filed the certifications of its Chief
Executive Officer and Chief Financial Officer required under Section 302 of the Sarbanes-Oxley Act of 2002 to be filed with the Securities and Exchange Commission regarding the quality of Cox Radios public disclosure.



|ITEM 11. | Executive Compensation
|-------- | ----------------------

The information required by this Item is incorporated by
reference to Cox Radios Proxy Statement for the 2007 Annual Meeting of Shareholders.



|ITEM 12. | Security Ownership of Certain Beneficial Owners and Management
|-------- | --------------------------------------------------------------

The information
required by this Item is incorporated by reference to Cox Radios Proxy Statement for the 2007 Annual Meeting of Shareholders.



|ITEM 13. | Certain Relationships and Related Transactions
|-------- | ----------------------------------------------

The information required by this Item
is incorporated by reference to Cox Radios Proxy Statement for the 2007 Annual Meeting of Shareholders.



55



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##### Table of Contents

|ITEM 14. | Principal Accountant Fees and Services
|-------- | --------------------------------------

The information required by this Item is
incorporated by reference to Cox Radios Proxy Statement for the 2007 Annual Meeting of Shareholders.

PART IV



|ITEM 15. | Exhibits, Financial Statement Schedules
|-------- | ---------------------------------------



| | (a) | Documents incorporated by reference or filed with this report:
| | --- | --------------------------------------------------------------



| | (1) | Audited Consolidated Balance Sheets as of December 31, 2006 and 2005 and Consolidated Statements of Operations, Shareholders Equity and Cash Flows for each of the three
years in the period ended December 31, 2006 (filed under Item 8 of this Report); and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Schedule II  Valuation and qualifying accounts.
| | --- | ------------------------------------------------



| | (3) | Exhibits required to be filed by Item 601 of Regulation S-K:
| | --- | ------------------------------------------------------------

Listed below are the exhibits, which are incorporated by reference or filed as part of this report (according to the number assigned to them in Item 601 of Regulation S-K):



|               |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-------------- |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  |   |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(1)3.1         |  |  |  | Amended and Restated Certificate of Incorporation of Cox Radio, Inc.                                                                                                                                                                                                                                                                                                                                                                                                
|(2)3.2         |  |  |  | Certificate of Amendment of Certificate of Incorporation of Cox Radio, Inc.                                                                                                                                                                                                                                                                                                                                                                                         
|(3)3.3         |  |  |  | Amended and Restated Bylaws of Cox Radio, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                      
|(4)4.1         |  |  |  | Indenture dated as of May 26, 1998 by and among Cox Radio, Inc. The Bank of New York, WSB, Inc. and WHIO, Inc.                                                                                                                                                                                                                                                                                                                                                      
|(5)4.2         |  |  |  | First Supplemental Indenture dated as of February 1, 1999 by and among The Bank of New York, Cox Radio, Inc. and CXR Holdings, Inc.                                                                                                                                                                                                                                                                                                                                 
|(6)4.3         |  |  |  | Agreement of Resignation, Appointment and Acceptance, effective March 1, 2005, by and among Cox Radio, Inc., The Bank of New York and the Bank of New York Trust Company, N.A.                                                                                                                                                                                                                                                                                      
|(7)4.4         |  |  |  | Form of Specimen Class A common stock certificate.                                                                                                                                                                                                                                                                                                                                                                                                                  
|(8)10.1        |  |  |  | Credit Agreement dated as of July 26, 2006 among Cox Radio, Inc., the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Lehman Commercial Paper Inc. and Citibank, N.A.,
as Syndication Agents, Wachovia Capital Markets, LLC and Bank of Tokyo-Mitsubishi UFJ Trust Company as Documentation Agents and JP Morgan Securities, Inc., Lehman Brothers Inc. and Citigroup Global Markets, Inc. as Joint Lead Arrangers and Joint
Bookrunners.
|(9)10.2        |  |  |  | Revolving Promissory Notes, dated December 4, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                 
|(10)10.3       |  |  |  | Cox Radio, Inc. Third Amended and Restated Long-Term Incentive Plan (management contract or compensation plan).                                                                                                                                                                                                                                                                                                                                                     
|(11)10.4       |  |  |  | Forms of Award Agreements under Amended and Restated Long-Term Incentive Plan (management contract or compensation plan).                                                                                                                                                                                                                                                                                                                                           
|(12)10.6       |  |  |  | Cox Radio, Inc. Restricted Stock Plan for Non-Employee Directors (management contract or compensation plan).                                                                                                                                                                                                                                                                                                                                                        
|(13)10.7       |  |  |  | Form of Notice of Grant under Restricted Stock Plan for Non-Employee Directors (management contract or compensation plan).                                                                                                                                                                                                                                                                                                                                          
|(14)10.8       |  |  |  | Cox Radio, Inc. Savings Plus Restoration Plan (management contract or compensation plan).                                                                                                                                                                                                                                                                                                                                                                           
|(15)10.9       |  |  |  | Consulting Agreement dated as of November 7, 2006 between Cox Radio, Inc. and Richard A. Ferguson (management contract or compensation plan).                                                                                                                                                                                                                                                                                                                       
|10.10          |  |  |  | Cox Executive Supplemental Plan, as amended (management contract or compensation plan).                                                                                                                                                                                                                                                                                                                                                                             
|10.11          |  |  |  | Cox Enterprises, Inc. Executive Savings Plus Restoration Plan, as amended (management contract or compensation plan).                                                                                                                                                                                                                                                                                                                                               
|13.1           |  |  |  | Portions of the 2006 Annual Report to Shareholders (expressly incorporated by reference in Part II, Item 5 of this report).                                                                                                                                                                                                                                                                                                                                         



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|     |  |   |  |                                                                                                                                        
|---- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------
|21.1 |  |  |  | Subsidiaries of Cox Radio, Inc.                                                                                                        
|23.1 |  |  |  | Consent of Deloitte & Touche LLP.                                                                                                      
|24.1 |  |  |  | Power of Attorney set forth on the signature page of this report.                                                                      
|31.1 |  |  |  | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.                            
|31.2 |  |  |  | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.                            
|32.1 |  |  |  | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934.

---

|(1) | Incorporated by reference to Exhibit 3.1 of Cox Radios Registration Statement on Form S-1 (File No. 333-08737).
|--- | ----------------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to Exhibit 3.2 of Cox Radios Form 8-A/A filed on February 15, 2002.
|--- | ----------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to Exhibit 3.2 of Cox Radios Registration Statement on Form S-1 (File No. 333-08737).
|--- | ----------------------------------------------------------------------------------------------------------------

|(4) | Incorporated by reference to Exhibit 4.4 of Cox Radios Report on Form 10-Q for the period ended June 30, 1998 (global notes representing Cox Radios senior unsecured
non-convertible debt have not been filed or incorporated by reference in accordance with Item 601(b)(4)(iii) of Regulation S-K, and Cox Radio agrees to furnish copies of such instruments to the Securities and Exchange Commission upon request).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Incorporated by reference to Exhibit 4.2 of Cox Radios Report on Form 10-Q for the period ended March 31, 1999.
|--- | ----------------------------------------------------------------------------------------------------------------

|(6) | Incorporated by reference to Exhibit 4.3 of Cox Radios Registration Statement on Form S-3 (SEC File No. 333-124114).
|--- | ---------------------------------------------------------------------------------------------------------------------

|(7) | Incorporated by reference to Exhibit 4.1 of Cox Radios Report on Form 8-A/A dated February 15, 2002.
|--- | -----------------------------------------------------------------------------------------------------

|(8) | Incorporated by reference to Exhibit 10.1 of Cox Radios Current Report on Form 8-K dated July 26, 2006 and filed July 31, 2006.
|--- | --------------------------------------------------------------------------------------------------------------------------------

|(9) | Incorporated by reference to Exhibit 10.8 of Cox Radios Report on Form 10-K for the year ended December 31, 2003.
|--- | ------------------------------------------------------------------------------------------------------------------

|(10) | Incorporated by reference to Exhibit 10.2 of Cox Radios Report on Form 10-Q for the period ended March 31, 2005.
|---- | -----------------------------------------------------------------------------------------------------------------

|(11) | Incorporated by reference to Exhibit 10.3 of Cox Radios Report on Form 10-Q for the period ended March 31, 2005.
|---- | -----------------------------------------------------------------------------------------------------------------

|(12) | Incorporated by reference to Exhibit 10.11 of Cox Radios Registration Statement on Form S-1 (File No. 333-08737).
|---- | ------------------------------------------------------------------------------------------------------------------

|(13) | Incorporated by reference to Exhibit 10.6 of Cox Radios Report on Form 10-K for the year ended December 31, 2004.
|---- | ------------------------------------------------------------------------------------------------------------------

|(14) | Incorporated by reference to Exhibit 10.1 of Cox Radios Current Report on Form 8-K dated December 7, 2004 and filed January 28, 2005.
|---- | --------------------------------------------------------------------------------------------------------------------------------------

|(15) | Incorporated by reference to Exhibit 10.2 of Cox Radios Report on Form 10-Q for the period ended September 30, 2006.
|---- | ---------------------------------------------------------------------------------------------------------------------



57



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
Cox Radio, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



Cox Radio, Inc.By:

/s/ ROBERT F. NEILRobert F. NeilPresident and Chief Executive Officer


Date: March 13, 2007

POWER OF ATTORNEY

Cox Radio, Inc., a Delaware corporation, and each person whose signature appears
below, constitutes and appoints Robert F. Neil and Neil O. Johnston, and either of them, with full power to act without the other, such persons true and lawful attorneys-in-fact, with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign this Annual Report on Form 10-K and any and all amendments to such Annual Report on Form 10-K and other documents in connection therewith, and to file the same and all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them, full power and authority to do and perform each and every act and thing necessary or desirable to be
done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, thereby ratifying and confirming all that said attorneys-in-fact, or any of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of Cox Radio, Inc. and in the capacities and on the dates indicated.



|                        |  |                                                                |  |               
|----------------------- |  | -------------------------------------------------------------- |  | --------------
|Signature               |  | Title                                                          |  | Date          
|                        |  |                                                               
|                        |  | Chairman of the Board of Directors                             |  |               
|James C. Kennedy        |  |                                                                |  |               
|                        |  |                                                               
|/s/ ROBERT F. NEIL      |  | President and Chief Executive Officer;                         |  | March 13, 2007
|Robert F. Neil          |  | Director (principal executive officer)                         |  |               
|                        |  |                                                               
|/s/ NEIL O. JOHNSTON    |  | Vice-President and Chief Financial Officer                     |  | March 13, 2007
|Neil O. Johnston        |  | (principal accounting officer and principal financial officer) |  |               
|                        |  |                                                               
|/s/ JUANITA P. BARANCO  |  | Director                                                       |  | March 13, 2007
|Juanita P. Baranco      |  |                                                                |  |               
|                        |  |                                                               
|                        |  | Director                                                       |  |               
|G. Dennis Berry         |  |                                                                |  |               
|                        |  |                                                               
|/s/ JIMMY W. HAYES      |  | Director                                                       |  | March 13, 2007
|Jimmy W. Hayes          |  |                                                                |  |               
|                        |  |                                                               
|                        |  | Director                                                       |  |               
|Paul M. Hughes          |  |                                                                |  |               
|                        |  |                                                               
|/s/ MARC W. MORGAN      |  | Director                                                       |  | March 13, 2007
|Marc W. Morgan          |  |                                                                |  |               
|                        |  |                                                               
|/s/ NICHOLAS D. TRIGONY |  | Director                                                       |  | March 13, 2007
|Nicholas D. Trigony     |  |                                                                |  |               



58



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SCHEDULE II

COX RADIO, INC.

VALUATION AND QUALIFYING ACCOUNTS

Allowance for Doubtful Accounts



|                                     |  |                                 |       |                               |   |                             |  |            |       |                            |   |       |  |   |      
|------------------------------------ |  | ------------------------------- | ----- | ----------------------------- | - | --------------------------- |  | ---------- | ----- | -------------------------- | - | ----- |  | - | -----
|For the FiscalYears EndedDecember 31 |  | BalanceAs of Beginningof Period |       | Assumed inBusinessCombination |   | Charges toCosts andExpenses |  | Deductions |       | Balance As ofEnd of Period
|(Amounts in thousands)              
|2006                                 |  | $                               | 3,190 |                               | $ |                            |  | $          | 913   |                            | $ | 1,119 |  | $ | 2,984
|2005                                 |  |                                 | 3,843 |                               |   |                            |  |            | 1,000 |                            |   | 1,653 |  |   | 3,190
|2004                                 |  |                                 | 4,229 |                               |   |                            |  |            | 2,869 |                            |   | 3,255 |  |   | 3,843