##### Table of Contents









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) OFTHE SECURITIES EXCHANGE ACT OF 1934
|    
|     |  | For the fiscal year ended December 31,
    2002                                        
|    
|[  ] |  | 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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(COX RADIO INC. LOGO)

(Exact name of Registrant as specified in its
charter)


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



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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


Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past 90 days. Yes x No
o

Indicate by check mark 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
an accelerated filer (as defined in Exchange Act
Rule 12b-2). Yes x No
o

As of February 28, 2003, the aggregate
market value of the Class A common stock held by
non-affiliates of the registrant was $793,369,390 based on the
closing price on the New York Stock Exchange on such date.

There were 41,471,068 shares of Class A
common stock outstanding as of February 28, 2003.

There were 58,733,016 shares of Class B
common stock outstanding as of February 28, 2003.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the 2002 Annual Report to
Shareholders and the Proxy Statement for the 2003 Annual Meeting
of Shareholders are incorporated by reference into Part II
and Part III.



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TABLE OF CONTENTS



|                                                                                             |                                                                                               |  |  |  |  |  |  | 
|-------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                                                                      
|                                                                                             | ITEM 1. Business                                                                             
|                                                                                             | ITEM 2. Properties                                                                           
|                                                                                             | ITEM 3. Legal Proceedings                                                                    
|                                                                                             | ITEM 4. Submission of Matters to a Vote of Security Holders                                  
|PART II                                                                                     
|                                                                                             | ITEM 5. Market for Registrants Common Equity and Related Stockholder Matters                
|                                                                                             | ITEM 6. Selected Consolidated Financial Data                                                 
|                                                                                             | ITEM 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                                                             | ITEM 7A. Quantitative and Qualitative Disclosure About Market Risk                           
|                                                                                             | ITEM 8. Financial Statements and Supplementary Data                                          
|ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|PART III                                                                                    
|                                                                                             | ITEM 10. Directors and Executive Officers                                                    
|                                                                                             | ITEM 11. Executive Compensation                                                              
|                                                                                             | ITEM 12. Security Ownership of Certain Beneficial Owners and Management                      
|                                                                                             | ITEM 13. Certain Relationships and Related Transactions                                      
|                                                                                             | ITEM 14. Controls and Procedures                                                             
|PART IV                                                                                     
|ITEM 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K                    
|SIGNATURES                                                                                  
|SCHEDULE II                                                                                 
|EX-13 SHAREHOLDER INFORMATION                                                               
|EX-21 SUBSIDIARIES OF COX RADIO, INC.                                                       
|EX-23.1 CONSENT OF DELOITTE & TOUCHE LLP.                                                   
|EX-99.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER                                            
|EX-99.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER                                            



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##### Table of Contents



COX RADIO, INC.

2002 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

|           |  |                                                                                           |  |      |    | 
|---------- |  | ----------------------------------------------------------------------------------------- |  | ---- | -- | 
|           |  |                                                                                           |  | Page
|           |  |                                                                                           |  |     
|PART I    
|Item 1.    |  | Business                                                                                  |  |      | 1  | 
|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 and
    Related Stockholder Matters                 |  |      | 22 | 
|Item 6.    |  | Selected Consolidated Financial Data                                                      |  |      | 22 | 
|Item 7.    |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations |  |      | 23 | 
|Item 7A.   |  | Quantitative and Qualitative Disclosure About
    Market Risk                             |  |      | 36 | 
|Item 8.    |  | Financial Statements and Supplementary Data                                               |  |      | 37 | 
|Item 9.    |  | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure  |  |      | 66 | 
|PART III  
|Item 10.   |  | Directors and Executive Officers                                                          |  |      | 66 | 
|Item 11.   |  | Executive Compensation                                                                    |  |      | 66 | 
|Item 12.   |  | Security Ownership of Certain Beneficial Owners
    and Management                        |  |      | 66 | 
|Item 13.   |  | Certain Relationships and Related Transactions                                            |  |      | 66 | 
|Item 14.   |  | Controls and Procedures                                                                   |  |      | 66 | 
|PART IV   
|Item 15.   |  | Exhibits, Financial Statement Schedules and
    Reports on Form 8-K                       |  |      | 67 | 
|Signatures |  |                                                                                           |  |      | 70 | 

Preliminary Note

This Annual Report on Form10-K is for the year
ended December 31, 2002. This Annual Report modifies and
supersedes documents filed prior to this Annual Report. The 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.

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##### Table of Contents






PART I




ITEM 1.     Business

Cox Radio, Inc. is the third largest radio
broadcasting company in the United States and the largest
pure-play radio station group, based on revenues, and has one
reportable segment for accounting purposes. We own or operate,
or provide sales and marketing services for 78 radio stations
(67 FM and 11 AM) clustered in 18 markets. We operate
three or more stations in 15 of our 18 markets. We operate a
wide range of programming formats in geographically diverse
markets across the United States, including 11 of the
countrys top 50 radio revenue markets.

We are an indirect majority-owned subsidiary of
Cox Enterprises, Inc. Cox Enterprises indirectly owns
approximately 62% of our common stock and has approximately 94%
of the voting power of Cox Radio. We have 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, with consolidated 2002 revenues
of approximately $9.9 billion. Our business was operated as
part of Cox Enterprises prior to our initial public offering in
September 1996, when Cox Enterprises transferred all of its U.S.
radio operations to Cox Radio. Cox Radio, as part of Cox
Enterprises, was a pioneer in radio broadcasting, building its
first station in 1934, acquiring its flagship station, WSB-AM
(Atlanta), in 1939, and launching its first FM station, WSB-FM
(Atlanta), in 1948.

We seek to maximize the revenues and broadcast
cash flow 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, geographic location and stage
of development.

We have a track record of acquiring,
repositioning and improving the operating performance of
previously under-performing stations. Management believes that a
number of our stations have significant growth opportunities or
turnaround potential and, therefore, can be characterized as
start-up or developing stations. Generally, we consider start-up
or developing stations to include those stations that have been
recently acquired and offer the greatest potential for growth.
Currently, we consider 38 of our stations to be start-up or
developing stations. We believe these stations can achieve
significant revenue growth by employing our operating strategy.
Management believes that our mix of stations in different stages
of development enables us to maximize our growth potential.

During 2000, we created a new media division, Cox
Radio Interactive (CXRi), to act as the clearinghouse and
distributor for our Internet tools and technology, including our
radio station web sites. Our 76 web sites are programmed based
on what listeners want from a radio station web site and are
focused on audio, community calendar and database marketing. For
example, as a convenience to our listeners, we were the first
company to broadly deploy and maintain a web-based searchable
list of the last songs played on our music radio stations. CXRi
also trains our local sales staffs on the integrated marketing
opportunities station web sites bring to our advertisers who are
increasingly taking advantage of the reach Internet inventory
provides them.





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Acquisitions and Dispositions

During the past several years, we have actively
managed our 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, we provide
programming or sales and marketing or a combination of such
services. The broadcast revenues and operating expenses of
stations operated by us under LMAs and JSAs have been included
in our operations since the respective 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 us during the past three years, and
through February 28, 2003 are discussed below.

In January 2000, we acquired the assets of
KRTQ-FM (formerly KTFX-FM) in Tulsa, Oklahoma, for consideration
of $3.5 million. We had been operating this station
pursuant to an LMA since January 1999.

In January 2000, we disposed of the assets of
KACE-FM and KRTO-FM, serving Los Angeles, California, for
consideration of approximately $75 million, resulting in a
pre-tax gain of approximately $46.6 million.

In April 2000, the LMA for WCNN-AM, serving
Atlanta, Georgia, terminated.

In April 2000, we disposed of the assets of
KGMZ-FM, serving Honolulu, Hawaii, for approximately
$6.6 million. The resulting loss on disposition was
immaterial. We continue to manage this stations local,
regional and national advertising sales efforts under a JSA. In
addition, we are a guarantor of the buyers financing for
this transaction.

In May 2000, we acquired the assets of KINE-FM,
KCCN-FM and KCCN-AM, serving Honolulu, Hawaii, for consideration
of approximately $17.8 million.

In July 2000, we acquired the outstanding capital
stock of Marlin Broadcasting, Inc., which owned radio stations
WPYM-FM (formerly WTMI-FM) serving Miami, Florida, WCCC-FM and
WCCC-AM serving Hartford, Connecticut, and WBOQ-FM serving
Gloucester, Massachusetts, for approximately $125 million.
As part of this transaction, we sold those assets of Marlin
comprising WCCC-FM, WCCC-AM and WBOQ-FM to certain of the former
principals of Marlin for approximately $25 million, and did not
recognize any gain or loss on the sale of these assets.

In August 2000, we acquired WEDR-FM in Miami,
Florida; WFOX-FM in Atlanta, Georgia; WFYV-FM, WAPE-FM, WBWL-AM,
WKQL-FM, WMXQ-FM and WOKV-AM in Jacksonville, Florida; WEFX-FM,
WNLK-AM, WKHL-FM and WSTC-AM in Stamford/Norwalk, Connecticut;
and WPLR-FM and national and local sales and marketing rights at
WYBC-FM in New Haven, Connecticut in exchange for KFI-AM and
KOST-FM in Los Angeles, California, plus approximately
$3 million. The transaction was accounted for as a purchase
business combination with a fair value of $473 million
based on an independent appraisal. We recorded a $429.9 million
pre-tax gain on the transaction in the third quarter of 2000. We
had operated the acquired stations (other than WYBC-FM) pursuant
to an LMA and WYBC-FM pursuant to a JSA since October 1999 and
continue to operate WYBC-FM pursuant to a JSA. We obtained a
temporary waiver of the FCCs newspaper-radio
cross-ownership rule for the acquisition of WFOX-FM in Atlanta,
Georgia.

In August 2000, we acquired the assets of radio
stations KKBQ-FM, KLDE-FM and KTHT-FM (formerly KKTL-FM),
serving Houston, Texas, and WKHK-FM, WMXB-FM, WKLR-FM and
WVBB-AM (formerly WTVR-AM), serving Richmond, Virginia, for
consideration of approximately $380 million.

In August 2000, we acquired the capital stock of
Midwestern Broadcasting Company, Inc., which owned WALR-FM,
serving Atlanta, Georgia, for $280 million. In a related
transaction with Salem

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Communications Corporation in September 2000, we
exchanged the license and transmitting facilities of WALR-FM, as
well as the license and transmitting facilities of radio
stations KLUP-AM, serving San Antonio, Texas, and WSUN-AM
(formerly WFNS-AM), serving Tampa, Florida, for the license and
transmitting facilities of radio station KHPT-FM (formerly
KKHT-FM), serving Houston, Texas. We retained the intellectual
property of WALR-FM and are broadcasting WALR-FMs
programming on our WJZF-FM signal in Atlanta, Georgia. We
changed WJZF-FMs call letters to WALR-FM.


In February 2001, we acquired WDYL-FM serving
Richmond, Virginia, and WJMZ-FM and WHZT-FM (formerly WPEK-FM)
serving Greenville, South Carolina, for a total of
$52.5 million.

In February 2001, we entered into a JSA to
provide sales and marketing services for WARV-FM serving
Richmond, Virginia, and simultaneously guaranteed the
owners financing for the acquisition of this station. In
February 2003, the owner sold WARV-FM and repaid the
$1.0 million of indebtedness associated with this station,
thereby extinguishing our guarantee of that indebtedness. Also
in February 2003, the JSA related to this station terminated.

In February 2001, we disposed of WHOO-AM serving
Orlando, Florida, for $5 million, resulting in a pre-tax
gain of approximately $2.4 million.

In May 2001, we disposed of the assets of KGTO-AM
serving Tulsa, Oklahoma, for $0.5 million. The resulting
gain on disposition was immaterial.

In July 2001, we disposed of the assets of
WVBB-AM (formerly WTVR-AM) serving Richmond, Virginia, for $0.7
million. The resulting loss on disposition was immaterial.

In January 2002, we disposed of the assets of
KRTR-AM (formerly KGMZ-AM) serving Honolulu, Hawaii, for
$0.6 million. The buyer of the station had been operating
the station under an LMA since October 2001. The resulting loss
on disposition was immaterial.

In June 2002, we disposed of the assets of
KCCN-AM serving Honolulu, Hawaii, for $0.8 million. The
resulting gain on disposition was immaterial.

In August 2002, we disposed of the assets of
WBWL-AM serving Jacksonville, Florida, for $2.5 million.
The resulting gain on disposition was immaterial.

Radio Stations

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

|                      |             |        |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |      |  |  |  |    | 
|--------------------- | ----------- | ------ | ------------------------ | ----------- |  | ------------------ |  | ----------------- |  | -------- |  | ---- |  | -- |  |  |  | ---- |  |  |  | -- | 
|                      |             |        |                          |             |  |                    |  |                  
|                      |             |        |                          |             |  | Target Demographic |  | Demographic Group
|                      |             |        |                          |             |  | Group              |  | (Adults 25-54)   
|                      |             |        |                          | Target      |  |                    |  |                  
|Market(1) and Station |             |        |                          | Demographic |  | Audience           |  |                   |  | Audience |  |     
|Call Letters          |             | Format |                          | Group       |  | Share              |  | Rank              |  | Share    |  | Rank
|                      |             |        |                          |             |  |                    |  |                   |  |          |  |     
|Atlanta               |             |        |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |      |  |  |  |   
|                      | WSB-AM      |        | News/Talk                |             |  | Adults 35-64       |  |                   |  | 10.8     |  |      |  | 1  |  |  |  | 7.8  |  |  |  | 2  | 
|                      | WALR-FM     |        | Urban Adult Contemporary |             |  | Adults 35-54       |  |                   |  | 6.2      |  |      |  | 3  |  |  |  | 5.1  |  |  |  | 4  | 
|                      | WSB-FM      |        | Adult Contemporary       |             |  | Women 25-54        |  |                   |  | 6.0      |  |      |  | 4  |  |  |  | 4.8  |  |  |  | 6  | 
|                      | WBTS-FM     |        | Rhythmic CHR             |             |  | Women 18-34        |  |                   |  | 5.6      |  |      |  | 5  |  |  |  | 2.0  |  |  |  | 21 | 
|                      | WFOX-FM (2) |        | Urban Contemporary       |             |  | Adults 25-54       |  |                   |  |         |  |      |  |   |  |  |  |     |  |  |  |   | 
|Birmingham            |             |        |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |      |  |  |  |   
|                      | WBHJ-FM     |        | Hip Hop                  |             |  | Adults 18-34       |  |                   |  | 14.4     |  |      |  | 1  |  |  |  | 5.4  |  |  |  | 6  | 
|                      | WBHK-FM     |        | R&B/Soul                 |             |  | Adults 25-54       |  |                   |  | 14.4     |  |      |  | 1  |  |  |  | 14.4 |  |  |  | 1  | 
|                      | WZZK-FM     |        | Country                  |             |  | Adults 25-54       |  |                   |  | 6.9      |  |      |  | 3  |  |  |  | 6.9  |  |  |  | 3  | 
|                      | WBPT-FM     |        | 80s                     |             |  | Adults 25-54       |  |                   |  | 4.8      |  |      |  | 7  |  |  |  | 4.8  |  |  |  | 7  | 
|                      | WAGG-AM     |        | Gospel                   |             |  | Adults 25-54       |  |                   |  | 4.4      |  |      |  | 9  |  |  |  | 4.4  |  |  |  | 9  | 
|                      | WODL-FM     |        | Oldies                   |             |  | Adults 35-54       |  |                   |  | 2.2      |  |      |  | 15 |  |  |  | 1.7  |  |  |  | 17 | 
|                      | WRJS-AM     |        | Spanish/Gospel           |             |  | Adults 25-54       |  |                   |  | 0.4      |  |      |  | 25 |  |  |  | 0.4  |  |  |  | 25 | 
|Dayton                |             |        |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |      |  |  |  |   
|                      | WHKO-FM     |        | Country                  |             |  | Adults 25-54       |  |                   |  | 9.0      |  |      |  | 3  |  |  |  | 9.0  |  |  |  | 3  | 
|                      | WHIO-AM     |        | News/Talk                |             |  | Adults 35-54       |  |                   |  | 4.6      |  |      |  | 7  |  |  |  | 3.7  |  |  |  | 8  | 

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|                       |                                |              |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |     |  |  |  |    | 
|---------------------- | ------------------------------ | ------------ | ------------------------ | ----------- |  | ------------------ |  | ----------------- |  | -------- |  | ---- |  | -- |  |  |  | --- |  |  |  | -- | 
|                       |                                |              |                          |             |  |                    |  |                  
|                       |                                |              |                          |             |  | Target Demographic |  | Demographic Group
|                       |                                |              |                          |             |  | Group              |  | (Adults 25-54)   
|                       |                                |              |                          | Target      |  |                    |  |                  
|Market(1) and Station  |                                |              |                          | Demographic |  | Audience           |  |                   |  | Audience |  |     
|Call Letters           |                                | Format       |                          | Group       |  | Share              |  | Rank              |  | Share    |  | Rank
|                       |                                |              |                          |             |  |                    |  |                   |  |          |  |     
|                       | WDPT-FM                        |              | 80s                     |             |  | Adults 25-54       |  |                   |  | 3.4      |  |      |  | 9  |  |  |  | 3.4 |  |  |  | 9  | 
|                       | WZLR-FM formerly WDTP- FM) (2) |              | Classic Rock             |             |  | Men 25-54          |  |                   |  |         |  |      |  |   |  |  |  |    |  |  |  |   | 
|Greenville-Spartanburg |                                |              |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |     |  |  |  |   
|                       | WJMZ-FM                        |              | Urban Contemporary       |             |  | Adults 25-54       |  |                   |  | 8.4      |  |      |  | 2  |  |  |  | 8.4 |  |  |  | 2  | 
|                       | WHZT-FM                        |              | Rhythmic CHR             |             |  | Adults 18-34       |  |                   |  | 10.7     |  |      |  | 2  |  |  |  | 4.3 |  |  |  | 9  | 
|Honolulu               |                                |              |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |     |  |  |  |   
|                       | KCCN-FM                        |              | Hawaiian CHR             |             |  | Adults 18-34       |  |                   |  | 9.9      |  |      |  | 1  |  |  |  | 7.5 |  |  |  | 3  | 
|                       | KRTR-FM                        |              | Adult Contemporary       |             |  | Adults 25-54       |  |                   |  | 8.3      |  |      |  | 2  |  |  |  | 8.3 |  |  |  | 2  | 
|                       | KGMZ-FM (3)                    |              | Oldies                   |             |  | Adults 35-54       |  |                   |  | 6.5      |  |      |  | 4  |  |  |  | 4.9 |  |  |  | 8  | 
|                       | KINE-FM                        |              | Hawaiian Adult           |             |  | Adults 25-54       |  |                   |  | 6.5      |  |      |  | 4  |  |  |  | 6.5 |  |  |  | 4  | 
|                       |                                | Contemporary |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |     |  |  |  |   
|                       | KXME-FM                        |              | Rhythmic CHR             |             |  | Women 18-34        |  |                   |  | 7        |  |      |  | 7  |  |  |  | 2.8 |  |  |  | 16 | 
|Houston                |                                |              |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |     |  |  |  |   
|                       | KLDE-FM                        |              | Oldies                   |             |  | Adults 35-54       |  |                   |  | 4.9      |  |      |  | 5  |  |  |  | 3.6 |  |  |  | 8  | 
|                       | KHPT-FM                        |              | 80s                     |             |  | Adults 25-54       |  |                   |  | 3.3      |  |      |  | 12 |  |  |  | 3.3 |  |  |  | 12 | 
|                       | KKBQ-FM                        |              | Country                  |             |  | Adults 25-54       |  |                   |  | 3.0      |  |      |  | 16 |  |  |  | 3.0 |  |  |  | 16 | 
|                       | KTHT-FM                        |              | Country Legends          |             |  | Adults 35-64       |  |                   |  | 0.6      |  |      |  | 34 |  |  |  | 1.0 |  |  |  | 26 | 
|Jacksonville           |                                |              |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |     |  |  |  |   
|                       | WAPE-FM                        |              | CHR                      |             |  | Women 18-34        |  |                   |  | 13.4     |  |      |  | 1  |  |  |  | 6.3 |  |  |  | 6  | 
|                       | WFYV-FM                        |              | Classic Rock             |             |  | Men 25-54          |  |                   |  | 13.2     |  |      |  | 1  |  |  |  | 9.1 |  |  |  | 1  | 
|                       | WKQL-FM                        |              | Oldies                   |             |  | Adults 35-54       |  |                   |  | 8.4      |  |      |  | 3  |  |  |  | 6.7 |  |  |  | 4  | 
|                       | WMXQ-FM                        |              | 80s                     |             |  | Adults 25-54       |  |                   |  | 6.7      |  |      |  | 4  |  |  |  | 6.7 |  |  |  | 4  | 
|                       | WOKV-AM                        |              | News/Talk                |             |  | Adults 35-64       |  |                   |  | 6.2      |  |      |  | 6  |  |  |  | 4.8 |  |  |  | 8  | 
|Long Island            |                                |              |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |     |  |  |  |   
|                       | WBLI-FM                        |              | CHR                      |             |  | Women 18-34        |  |                   |  | 11.7     |  |      |  | 1  |  |  |  | 5.7 |  |  |  | 3  | 
|                       | WBAB-FM (4)                    |              | Mainstream Rock          |             |  | Men 25-54          |  |                   |  | 8.6      |  |      |  | 1  |  |  |  | 6.3 |  |  |  | 1  | 
|                       | WHFM-FM (4)                    |              | Mainstream Rock          |             |  | Men 25-54          |  |                   |  |         |  |      |  |   |  |  |  |    |  |  |  |   | 
|Louisville             |                                |              |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |     |  |  |  |   
|                       | WVEZ-FM                        |              | Adult Contemporary       |             |  | Women 25-54        |  |                   |  | 10.0     |  |      |  | 2  |  |  |  | 6.9 |  |  |  | 3  | 
|                       | WSFR-FM                        |              | Classic Rock             |             |  | Adults 25-54       |  |                   |  | 5.6      |  |      |  | 4  |  |  |  | 5.6 |  |  |  | 4  | 
|                       | WRKA-FM                        |              | Oldies                   |             |  | Adults 35-54       |  |                   |  | 5.4      |  |      |  | 5  |  |  |  | 4.2 |  |  |  | 9  | 
|                       | WPTI-FM                        |              | 80s                     |             |  | Adults 25-54       |  |                   |  | 3.2      |  |      |  | 11 |  |  |  | 3.2 |  |  |  | 11 | 
|Miami                  |                                |              |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |     |  |  |  |   
|                       | WEDR-FM                        |              | Urban Contemporary       |             |  | Adults 18-34       |  |                   |  | 12.6     |  |      |  | 1  |  |  |  | 6.5 |  |  |  | 1  | 
|                       | WHQT-FM                        |              | Urban Adult Contemporary |             |  | Adults 25-54       |  |                   |  | 5.7      |  |      |  | 2  |  |  |  | 5.7 |  |  |  | 2  | 
|                       | WPYM-FM                        |              | Dance CHR                |             |  | Adults 18-34       |  |                   |  | 6.5      |  |      |  | 3  |  |  |  | 3.6 |  |  |  | 11 | 
|                       | WFLC-FM                        |              | Hot Adult Contemporary   |             |  | Women 25-54        |  |                   |  | 4.7      |  |      |  | 6  |  |  |  | 4.0 |  |  |  | 8  | 
|Orlando                |                                |              |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |     |  |  |  |   
|                       | WHTQ-FM                        |              | Classic Rock             |             |  | Men 35-54          |  |                   |  | 7.2      |  |      |  | 2  |  |  |  | 4.6 |  |  |  | 7  | 
|                       | WCFB-FM                        |              | Urban Adult Contemporary |             |  | Adults 25-54       |  |                   |  | 5.9      |  |      |  | 4  |  |  |  | 5.9 |  |  |  | 4  | 
|                       | WPYO-FM                        |              | Rhythmic/ Dance/CHR      |             |  | Adults 18-34       |  |                   |  | 6.3      |  |      |  | 4  |  |  |  | 2.3 |  |  |  | 17 | 
|                       | WWKA-FM                        |              | Country                  |             |  | Adults 25-54       |  |                   |  | 5.6      |  |      |  | 5  |  |  |  | 5.6 |  |  |  | 5  | 
|                       | WMMO-FM                        |              | Rock Adult Contemporary  |             |  | Adults 25-54       |  |                   |  | 5.5      |  |      |  | 6  |  |  |  | 5.5 |  |  |  | 6  | 
|                       | WDBO-AM                        |              | News/Talk                |             |  | Adults 35-64       |  |                   |  | 5.7      |  |      |  | 7  |  |  |  | 4.0 |  |  |  | 12 | 
|Richmond               |                                |              |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |     |  |  |  |   
|                       | WKLR-FM                        |              | Classic Rock             |             |  | Men 25-54          |  |                   |  | 9.8      |  |      |  | 1  |  |  |  | 7.3 |  |  |  | 3  | 
|                       | WKHK-FM                        |              | Country                  |             |  | Adults 25-54       |  |                   |  | 7.9      |  |      |  | 2  |  |  |  | 7.9 |  |  |  | 2  | 
|                       | WDYL-FM                        |              | New Rock                 |             |  | Men 18-34          |  |                   |  | 9.9      |  |      |  | 2  |  |  |  | 2.8 |  |  |  | 15 | 
|                       | WMXB-FM                        |              | Hot Adult Contemporary   |             |  | Women 25-54        |  |                   |  | 6.2      |  |      |  | 6  |  |  |  | 4.9 |  |  |  | 8  | 
|San Antonio            |                                |              |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |     |  |  |  |   
|                       | KONO-FM (5)                    |              | Oldies                   |             |  | Adults 35-54       |  |                   |  | 9.1      |  |      |  | 1  |  |  |  | 7.1 |  |  |  | 1  | 
|                       | KISS-FM                        |              | Active Rock              |             |  | Adults 18-49       |  |                   |  | 9.4      |  |      |  | 1  |  |  |  | 7.1 |  |  |  | 1  | 
|                       | KCYY-FM                        |              | Country                  |             |  | Adults 25-54       |  |                   |  | 5.5      |  |      |  | 5  |  |  |  | 5.5 |  |  |  | 5  | 
|                       | KSMG-FM                        |              | Hot Adult Contemporary   |             |  | Adults 25-54       |  |                   |  | 4.9      |  |      |  | 7  |  |  |  | 4.9 |  |  |  | 7  | 

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|                      |             |        |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |              |  |  |  |              | 
|--------------------- | ----------- | ------ | ------------------------ | ----------- |  | ------------------ |  | ----------------- |  | -------- |  | ---- |  | -- |  |  |  | ------------ |  |  |  | ------------ | 
|                      |             |        |                          |             |  |                    |  |                  
|                      |             |        |                          |             |  | Target Demographic |  | Demographic Group
|                      |             |        |                          |             |  | Group              |  | (Adults 25-54)   
|                      |             |        |                          | Target      |  |                    |  |                  
|Market(1) and Station |             |        |                          | Demographic |  | Audience           |  |                   |  | Audience |  |     
|Call Letters          |             | Format |                          | Group       |  | Share              |  | Rank              |  | Share    |  | Rank
|                      |             |        |                          |             |  |                    |  |                   |  |          |  |     
|                      | KCJZ-FM     |        | Rhythmic CHR             |             |  | Women 18-49        |  |                   |  | 4.3      |  |      |  | 10 |  |  |  | 2.5          |  |  |  | 16           | 
|                      | KKYX-AM     |        | Classic Country          |             |  | Adults 35-64       |  |                   |  | 1.5      |  |      |  | 19 |  |  |  | 0.7          |  |  |  | 25           | 
|                      | KONO-AM (5) |        | Oldies                   |             |  | Adults 35-54       |  |                   |  |         |  |      |  |   |  |  |  |             |  |  |  |             | 
|Southern Connecticut  |             |        |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |              |  |  |  |             
|Bridgeport            |             |        |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |              |  |  |  |             
|                      | WEZN-FM     |        | Adult Contemporary       |             |  | Women 25-54        |  |                   |  | 16.7     |  |      |  | 2  |  |  |  | 12.3         |  |  |  | 2            | 
|New Haven             |             |        |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |              |  |  |  |             
|                      | WPLR-FM     |        | Classic Rock/Mainstream  |             |  | Men 25-54          |  |                   |  | 15.5     |  |      |  | 1  |  |  |  | 11.9         |  |  |  | 1            | 
|                      | WYBC-FM (3) |        | Urban Adult Contemporary |             |  | Adults 25-54       |  |                   |  | 6.8      |  |      |  | 3  |  |  |  | 6.8          |  |  |  | 3            | 
|Stamford-Norwalk      |             |        |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |              |  |  |  |             
|                      | WKHL-FM     |        | Oldies                   |             |  | Adults 35-54       |  |                   |  | 4.1      |  |      |  | 6  |  |  |  | 3.4          |  |  |  | 11           | 
|                      | WEFX-FM     |        | Classic Rock             |             |  | Adults 25-54       |  |                   |  | 3.9      |  |      |  | 6  |  |  |  | 3.9          |  |  |  | 6            | 
|                      | WSTC-AM     |        | News/Talk                |             |  | Adults 35-64       |  |                   |  | 1.4      |  |      |  | 23 |  |  |  | 1.0          |  |  |  | 29           | 
|                      | WNLK-AM     |        | News/Talk                |             |  | Adults 35-64       |  |                   |  | 0.5      |  |      |  | 35 |  |  |  | Not reported |  |  |  | Not reported | 
|Tampa                 |             |        |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |              |  |  |  |             
|                      | WDUV-FM     |        | Soft Adult Contemporary  |             |  | Adults 35-64       |  |                   |  | 7.8      |  |      |  | 1  |  |  |  | 3.2          |  |  |  | 15           | 
|                      | WWRM-FM     |        | Adult Contemporary       |             |  | Women 25-54        |  |                   |  | 7.0      |  |      |  | 2  |  |  |  | 4.6          |  |  |  | 8            | 
|                      | WPOI-FM     |        | 80s                     |             |  | Adults 25-54       |  |                   |  | 5.8      |  |      |  | 4  |  |  |  | 5.8          |  |  |  | 4            | 
|                      | WSUN-FM     |        | Alternative Rock         |             |  | Men 18-34          |  |                   |  | 7.9      |  |      |  | 4  |  |  |  | 2.9          |  |  |  | 16           | 
|                      | WBBY-FM     |        | Classic Hits             |             |  | Adults 35-54       |  |                   |  | 4.5      |  |      |  | 10 |  |  |  | 3.5          |  |  |  | 13           | 
|                      | WHPT-FM     |        | Classic Rock             |             |  | Men 25-44          |  |                   |  | 4.8      |  |      |  | 10 |  |  |  | 3.3          |  |  |  | 14           | 
|Tulsa                 |             |        |                          |             |  |                    |  |                   |  |          |  |      |  |    |  |  |  |              |  |  |  |             
|                      | KRAV-FM     |        | Adult Contemporary       |             |  | Women 25-54        |  |                   |  | 9.4      |  |      |  | 1  |  |  |  | 6.8          |  |  |  | 4            | 
|                      | KWEN-FM     |        | Country                  |             |  | Adults 25-54       |  |                   |  | 7.6      |  |      |  | 2  |  |  |  | 7.6          |  |  |  | 2            | 
|                      | KRMG-AM     |        | News/Talk                |             |  | Adults 25-54       |  |                   |  | 7.2      |  |      |  | 3  |  |  |  | 7.2          |  |  |  | 3            | 
|                      | KRTQ-FM     |        | Active Rock              |             |  | Men 18-34          |  |                   |  | 9.3      |  |      |  | 3  |  |  |  | 3.0          |  |  |  | 13           | 
|                      | KJSR-FM     |        | Classic Rock             |             |  | Men 25-54          |  |                   |  | 6.6      |  |      |  | 3  |  |  |  | 5.4          |  |  |  | 7            | 

Source:Arbitron
Market Reports four-book average for Winter 2002, Spring 2002,
Summer 2002 and Fall 2002.



---



|    |                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Metropolitan market served; city of license may
    differ.                                                                                                    
|(2) | The station format was changed within the last
    year; therefore, the stations audience share and audience
    rank information for 2002 are not applicable.
|(3) | Station operated by Cox Radio under a JSA.                                                                                                                     
|(4) | Audience share and audience rank information for
    WBAB-FM and WHFM-FM are combined because the stations are
    simulcast.                                  
|(5) | Audience share and audience rank information for
    KONO-FM and KONO-AM are combined because the stations are
    simulcast.                                  

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 such 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 share, provide opportunities to capture
an increased share of total advertising revenue in each of our
markets.

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Development of Under-Performing
Stations.Our management has
demonstrated its ability to acquire under-performing radio
stations and develop them into consistent ratings and revenue
leaders. Our historic margins reflect the acquisition and
continued development of under-performing stations, as well as
the fact that increases in net revenue are typically realized
subsequent to increases in audience share. Management believes
that a number of our stations have significant growth
opportunities or turnaround potential and can therefore be
characterized as start-up or developing stations.

Implementation of Cox Radios 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; and
|
| |  | Marketing and promotional activities.                       

Market Research and Targeted
Programming.Our research, programming
and marketing strategy combines 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 its targeted listeners. This approach focuses on
the needs of the listeners and their community and is designed
to improve ratings and maximize the impact of advertising for
our customers.

Through our 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
Dr. Laura in Tulsa; Rush Limbaugh
in Dayton, Jacksonville and Tulsa; The Clark Howard
Show in Atlanta, Dayton, Jacksonville, Orlando and Tulsa;
Neal Boortz in Atlanta, Dayton, Jacksonville,
Orlando and Tulsa; the Atlanta Braves in Atlanta; 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, the 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, our sales personnel are
encouraged to develop innovative marketing strategies for the
stations advertising customers.

Marketing and Promotional
Activities.Our 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 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 our
promotional spending. These promotional efforts help our
stations add new listeners and increase the amount of time spent
listening to the stations.

Strong Management
Teams.In addition to relying upon our
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.

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



| |   |                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Gallup/SRI, 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 policies that will improve station performance and
establish long-term relationships with listeners and
advertisers. The compensation of the senior operating management
team and local station managers is dependent upon financial
performance, and incentives to enhance performance are provided
through awards under our Amended and Restated Long-Term
Incentive Plan.

Clustering Strategy

During the last several years, we have
implemented our clustering strategy through the acquisition of
radio stations in several of our existing markets as well as in
new markets and 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 cost-effectively achieve
a leading position in terms of audience and revenue share.
Management believes that we will have the financial resources
and management expertise to continue to pursue our acquisition
strategy when appropriate opportunities arise. Certain future
acquisitions may be limited by the multiple and cross-ownership
rules of the Federal Communications Commission. 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, which presents us with an
opportunity to apply our management techniques and to 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. With the exception of 2001 and 1991, when
total radio advertising revenue fell by approximately 7.4% and
2.8%, respectively, advertising revenue has risen each year
since 1950 according to the Radio Advertising Bureau.

According to the Radio Advertising Bureaus
Radio Marketing Guide and Fact Book for Advertisers,
2002-2003, radio reaches approximately 96% of all consumers
over the age of 12 every week and 77% of persons over the age of
12 turn on their radios every day. More than 60% of all radio
listening is done outside the home, in contrast to other
advertising media, and radio reaches 84% of adults 18 and older
in

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the car each week. The average listener over the
age of 12 spends an average of 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.


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.

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 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; Changes in the Broadcasting
Industry

The radio broadcasting industry is a highly
competitive business. The success of each of our stations
depends largely upon our audience ratings and our share of the
overall advertising revenue within our 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 with promotional campaigns aimed at the
demographics targeted by our stations and by sales efforts
designed to attract advertisers. 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.

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 Federal
Communications Commission, or 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. 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
through broadcast television, cable television (which can offer
concurrent exposure on a number of cable networks to enlarge the
potential audience), direct

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broadcast satellite television, daily, weekly and
free-distribution newspapers, other print media, direct mail and
on-line computer services for radio advertising. 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 its advertising revenue share. In addition, the radio
broadcasting industry is subject to competition from new media
technologies that 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. 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, the Internet,
audiotapes and compact discs. A growing population and greater
availability of radios, particularly car and portable radios,
have contributed to this growth. There can be no assurance,
however, that the development or introduction in the future of
any new media technology 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 Cox Radio, 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
ownership, operation, program content, employment practices and
business 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 FCC 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. The FCC licenses for our stations
are held by some of our subsidiaries. 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 members
of the public and interest groups. The FCC is required to hold
hearings on a stations renewal application only if a
substantial or material question of fact exists as to whether
the station has served the public interest, convenience and
necessity. If, as a result of an evidentiary hearing, the FCC
determines that the licensee has failed to meet certain
requirements and that no mitigating factors justify the
imposition of a lesser sanction, then the FCC may deny a license
renewal application. Historically, our FCC licenses have
generally been renewed. 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. The non-renewal of one
or more of our licenses could have a material adverse effect on
our business.

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

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##### Table of Contents



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
interference.


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. Class C FM stations that do not meet certain
antenna-height parameters can be required to downgrade to
Class C0 under certain circumstances.

The following table sets forth selected
information concerning each of the stations owned, or operated
pursuant to an LMA or a JSA, by Cox Radio, 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:

|                      |                            |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |                | 
|--------------------- | -------------------------- | --------- |  | ---------- | --------- | ----- |  | --------------- | ------- | ----- |  |  | -- |  |  |  | ----- |  |  |  | -------------- | 
|                      |                            |           |  | Expiration |           |       |  |                 |         |      
|Market(1) and Station |                            |           |  | Date       |           |       |  | Height Above    |         |      
|Call Letters          |                            | Frequency |  | of License |           | Class |  | Average Terrain |         | Power
|                      |                            |           |  |            |           |       |  |                 |         |      
|                      | Atlanta                    |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |                | 
|                      | WSB-AM                     |           |  |            | 750 KHz   |       |  |                 | 4/1/04  |       |  |  | A  |  |  |  | N.A.  |  |  |  | 50 kw          | 
|                      | WSB-FM                     |           |  |            | 98.5 MHz  |       |  |                 | 4/1/04  |       |  |  | C  |  |  |  | 313 m |  |  |  | 100 kw         | 
|                      | WALR-FM                    |           |  |            | 104.1 MHz |       |  |                 | 4/1/04  |       |  |  | C1 |  |  |  | 371 m |  |  |  | 60 kw          | 
|                      | WBTS-FM                    |           |  |            | 95.5 MHz  |       |  |                 | 4/1/04  |       |  |  | C1 |  |  |  | 340 m |  |  |  | 74 kw          | 
|                      | WFOX-FM                    |           |  |            | 97.1 MHz  |       |  |                 | 4/1/04  |       |  |  | C  |  |  |  | 483 m |  |  |  | 100 kw         | 
|                      | Birmingham                 |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |                | 
|                      | WBHK-FM (2)                |           |  |            | 98.7 MHz  |       |  |                 | 4/1/04  |       |  |  | C1 |  |  |  | 408 m |  |  |  | 39 kw          | 
|                      | WBHJ-FM                    |           |  |            | 95.7 MHz  |       |  |                 | 4/1/04  |       |  |  | C1 |  |  |  | 299 m |  |  |  | 100 kw         | 
|                      | WAGG-AM                    |           |  |            | 610 KHz   |       |  |                 | 4/1/04  |       |  |  | B  |  |  |  | N.A.  |  |  |  | 5 kw day       | 
|                      |                            |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  | 1 kw night     | 
|                      | WRJS-AM                    |           |  |            | 1320 KHz  |       |  |                 | 4/1/04  |       |  |  | D  |  |  |  | N.A.  |  |  |  | 5 kw day       | 
|                      |                            |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  | 0.111 kw night | 
|                      | WZZK-FM (2)                |           |  |            | 104.7 MHz |       |  |                 | 4/1/04  |       |  |  | C0 |  |  |  | 404 m |  |  |  | 100 kw         | 
|                      | WODL-FM                    |           |  |            | 97.3 MHz  |       |  |                 | 4/1/04  |       |  |  | A  |  |  |  | 306 m |  |  |  | 0.64 kw        | 
|                      | WBPT-FM (2)                |           |  |            | 106.9 MHz |       |  |                 | 4/1/04  |       |  |  | C0 |  |  |  | 404 m |  |  |  | 100 kw         | 
|                      | Dayton                     |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |                | 
|                      | WHKO-FM                    |           |  |            | 99.1 MHz  |       |  |                 | 10/1/04 |       |  |  | B  |  |  |  | 325 m |  |  |  | 50 kw          | 
|                      | WHIO-AM                    |           |  |            | 1290 KHz  |       |  |                 | 10/1/04 |       |  |  | B  |  |  |  | N.A.  |  |  |  | 5 kw           | 
|                      | WDPT-FM                    |           |  |            | 95.7 MHz  |       |  |                 | 10/1/04 |       |  |  | B  |  |  |  | 145 m |  |  |  | 50 kw          | 
|                      | WZLR-FM (formerly WDTP-FM) |           |  |            | 95.3 MHz  |       |  |                 | 10/1/04 |       |  |  | A  |  |  |  | 98 m  |  |  |  | 6 kw           | 
|                      | Greenville-Spartanburg     |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |                | 
|                      | WJMZ-FM                    |           |  |            | 107.3 MHz |       |  |                 | 12/1/04 |       |  |  | C  |  |  |  | 308 m |  |  |  | 100 kw         | 
|                      | WHZT-FM                    |           |  |            | 98.1 MHz  |       |  |                 | 12/1/04 |       |  |  | C  |  |  |  | 304 m |  |  |  | 100 kw         | 
|                      | Honolulu                   |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |                | 
|                      | KRTR-FM                    |           |  |            | 96.3 MHz  |       |  |                 | 2/1/06  |       |  |  | C  |  |  |  | 645 m |  |  |  | 75 kw          | 
|                      | KXME-FM                    |           |  |            | 104.3 MHz |       |  |                 | 2/1/06  |       |  |  | C  |  |  |  | 645 m |  |  |  | 75 kw          | 
|                      | KGMZ-FM (3)                |           |  |            | 107.9 MHz |       |  |                 | 2/1/06  |       |  |  | C  |  |  |  | 599 m |  |  |  | 100 kw         | 
|                      | KCCN-FM                    |           |  |            | 100.3 MHz |       |  |                 | 2/1/06  |       |  |  | C  |  |  |  | 599 m |  |  |  | 100 kw         | 
|                      | KINE-FM                    |           |  |            | 105.1 MHz |       |  |                 | 2/1/06  |       |  |  | C  |  |  |  | 599 m |  |  |  | 100 kw         | 
|                      | Houston                    |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |                | 
|                      | KHPT-FM                    |           |  |            | 106.9 MHz |       |  |                 | 8/1/05  |       |  |  | C  |  |  |  | 579 m |  |  |  | 100 kw         | 
|                      | KLDE-FM                    |           |  |            | 107.5 MHz |       |  |                 | 8/1/05  |       |  |  | C  |  |  |  | 601 m |  |  |  | 98 kw          | 
|                      | KTHT-FM                    |           |  |            | 97.1 MHz  |       |  |                 | 8/1/05  |       |  |  | C  |  |  |  | 563 m |  |  |  | 100 kw         | 
|                      | KKBQ-FM                    |           |  |            | 92.9 MHz  |       |  |                 | 8/1/05  |       |  |  | C  |  |  |  | 585 m |  |  |  | 100 kw         | 
|                      | Jacksonville               |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |                | 
|                      | WAPE-FM                    |           |  |            | 95.1 MHz  |       |  |                 | 2/1/04  |       |  |  | C  |  |  |  | 300 m |  |  |  | 100 kw         | 
|                      | WFYV-FM                    |           |  |            | 104.5 MHz |       |  |                 | 2/1/04  |       |  |  | C  |  |  |  | 309 m |  |  |  | 100 kw         | 
|                      | WKQL-FM                    |           |  |            | 96.9 MHz  |       |  |                 | 2/1/04  |       |  |  | C  |  |  |  | 309 m |  |  |  | 100 kw         | 

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##### Table of Contents



|                      |                      |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |              | 
|--------------------- | -------------------- | --------- |  | ---------- | --------- | ----- |  | --------------- | ------- | ----- |  |  | -- |  |  |  | ----- |  |  |  | ------------ | 
|                      |                      |           |  | Expiration |           |       |  |                 |         |      
|Market(1) and Station |                      |           |  | Date       |           |       |  | Height Above    |         |      
|Call Letters          |                      | Frequency |  | of License |           | Class |  | Average Terrain |         | Power
|                      |                      |           |  |            |           |       |  |                 |         |      
|                      | WMXQ-FM              |           |  |            | 102.9 MHz |       |  |                 | 2/1/04  |       |  |  | C  |  |  |  | 309 m |  |  |  | 100 kw       | 
|                      | WOKV-AM              |           |  |            | 690 KHz   |       |  |                 | 2/1/04  |       |  |  | B  |  |  |  | N.A.  |  |  |  | 50 kw day    | 
|                      |                      |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  | 10 kw night  | 
|                      | Long Island          |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |              | 
|                      | WBLI-FM              |           |  |            | 106.1 MHz |       |  |                 | 6/1/06  |       |  |  | B  |  |  |  | 152 m |  |  |  | 49 kw        | 
|                      | WBAB-FM              |           |  |            | 102.3 MHz |       |  |                 | 6/1/06  |       |  |  | A  |  |  |  | 82 m  |  |  |  | 6 kw         | 
|                      | WHFM-FM              |           |  |            | 95.3 MHz  |       |  |                 | 6/1/06  |       |  |  | A  |  |  |  | 108 m |  |  |  | 5 kw         | 
|                      | Louisville           |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |              | 
|                      | WVEZ-FM              |           |  |            | 106.9 MHz |       |  |                 | 8/1/04  |       |  |  | B  |  |  |  | 204 m |  |  |  | 24.5 kw      | 
|                      | WRKA-FM              |           |  |            | 103.1 MHz |       |  |                 | 8/1/04  |       |  |  | A  |  |  |  | 95 m  |  |  |  | 6 kw         | 
|                      | WSFR-FM              |           |  |            | 107.7 MHz |       |  |                 | 8/1/04  |       |  |  | B1 |  |  |  | 173 m |  |  |  | 8.2 kw       | 
|                      | WPTI-FM              |           |  |            | 103.9 MHz |       |  |                 | 8/1/04  |       |  |  | A  |  |  |  | 149 m |  |  |  | 1.35 kw      | 
|                      | Miami                |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |              | 
|                      | WEDR-FM              |           |  |            | 99.1 MHz  |       |  |                 | 2/1/04  |       |  |  | C1 |  |  |  | 280 m |  |  |  | 100 kw       | 
|                      | WHQT-FM              |           |  |            | 105.1 MHz |       |  |                 | 2/1/04  |       |  |  | C  |  |  |  | 307 m |  |  |  | 100 kw       | 
|                      | WFLC-FM              |           |  |            | 97.3 MHz  |       |  |                 | 2/1/04  |       |  |  | C  |  |  |  | 307 m |  |  |  | 100 kw       | 
|                      | WPYM-FM              |           |  |            | 93.1 MHz  |       |  |                 | 2/1/04  |       |  |  | C  |  |  |  | 307 m |  |  |  | 100 kw       | 
|                      | Orlando              |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |              | 
|                      | WCFB-FM (4)          |           |  |            | 94.5 MHz  |       |  |                 | 2/1/04  |       |  |  | C  |  |  |  | 448 m |  |  |  | 100 kw       | 
|                      | WWKA-FM              |           |  |            | 92.3 MHz  |       |  |                 | 2/1/04  |       |  |  | C  |  |  |  | 454 m |  |  |  | 100 kw       | 
|                      | WDBO-AM              |           |  |            | 580 KHz   |       |  |                 | 2/1/04  |       |  |  | B  |  |  |  | N.A.  |  |  |  | 5 kw         | 
|                      | WMMO-FM              |           |  |            | 98.9 MHz  |       |  |                 | 2/1/04  |       |  |  | C2 |  |  |  | 159 m |  |  |  | 44 kw        | 
|                      | WHTQ-FM              |           |  |            | 96.5 MHz  |       |  |                 | 2/1/04  |       |  |  | C  |  |  |  | 454 m |  |  |  | 100 kw       | 
|                      | WPYO-FM              |           |  |            | 95.3 MHz  |       |  |                 | 2/1/04  |       |  |  | A  |  |  |  | 144 m |  |  |  | 2.9 kw       | 
|                      | Richmond             |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |              | 
|                      | WKLR-FM              |           |  |            | 96.5 MHz  |       |  |                 | 10/1/03 |       |  |  | B  |  |  |  | 138 m |  |  |  | 50 kw        | 
|                      | WKHK-FM              |           |  |            | 95.3 MHz  |       |  |                 | 10/1/03 |       |  |  | B1 |  |  |  | 120 m |  |  |  | 17.5 kw      | 
|                      | WMXB-FM              |           |  |            | 103.7 MHz |       |  |                 | 10/1/03 |       |  |  | B  |  |  |  | 256 m |  |  |  | 20 kw        | 
|                      | WDYL-FM              |           |  |            | 101.1 MHz |       |  |                 | 10/1/03 |       |  |  | A  |  |  |  | 112 m |  |  |  | 4 kw         | 
|                      | San Antonio          |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |              | 
|                      | KONO-FM              |           |  |            | 101.1 MHz |       |  |                 | 8/1/05  |       |  |  | C1 |  |  |  | 302 m |  |  |  | 98 kw        | 
|                      | KONO-AM              |           |  |            | 860 KHz   |       |  |                 | 8/1/05  |       |  |  | B  |  |  |  | N.A.  |  |  |  | 5 kw day     | 
|                      |                      |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  | 0.9 kw night | 
|                      | KCYY-FM              |           |  |            | 100.3 MHz |       |  |                 | 8/1/05  |       |  |  | C  |  |  |  | 300 m |  |  |  | 100 kw       | 
|                      | KCJZ-FM              |           |  |            | 106.7 MHz |       |  |                 | 8/1/05  |       |  |  | C  |  |  |  | 310 m |  |  |  | 100 kw       | 
|                      | KKYX-AM              |           |  |            | 680 KHz   |       |  |                 | 8/1/05  |       |  |  | B  |  |  |  | N.A.  |  |  |  | 50 kw day    | 
|                      |                      |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  | 10 kw night  | 
|                      | KISS-FM              |           |  |            | 99.5 MHz  |       |  |                 | 8/1/05  |       |  |  | C  |  |  |  | 339 m |  |  |  | 100 kw       | 
|                      | KSMG-FM              |           |  |            | 105.3 MHz |       |  |                 | 8/1/05  |       |  |  | C  |  |  |  | 381 m |  |  |  | 95 kw        | 
|                      | Southern Connecticut |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |              | 
|                      | Bridgeport           |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |              | 
|                      | WEZN-FM              |           |  |            | 99.9 MHz  |       |  |                 | 4/1/06  |       |  |  | B  |  |  |  | 204 m |  |  |  | 27.5 kw      | 
|                      | New Haven            |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |              | 
|                      | WPLR-FM              |           |  |            | 99.1 MHz  |       |  |                 | 4/1/06  |       |  |  | B  |  |  |  | 276 m |  |  |  | 15 kw        | 
|                      | WYBC-FM (3)          |           |  |            | 94.3 MHz  |       |  |                 | 4/1/06  |       |  |  | A  |  |  |  | 144 m |  |  |  | 3 kw         | 
|                      | Stamford-Norwalk     |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |              | 
|                      | WKHL-FM              |           |  |            | 96.7 MHz  |       |  |                 | 4/1/06  |       |  |  | A  |  |  |  | 100 m |  |  |  | 3 kw         | 
|                      | WEFX-FM              |           |  |            | 95.9 MHz  |       |  |                 | 4/1/06  |       |  |  | A  |  |  |  | 91 m  |  |  |  | 3 kw         | 
|                      | WSTC-AM              |           |  |            | 1400 KHz  |       |  |                 | 4/1/06  |       |  |  | C  |  |  |  | N.A.  |  |  |  | 0.78 kw      | 
|                      | WNLK-AM              |           |  |            | 1350 KHz  |       |  |                 | 4/1/06  |       |  |  | B  |  |  |  | N.A.  |  |  |  | 1 kw day     | 
|                      |                      |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  | 0.5 kw day   | 
|                      | Tampa                |           |  |            |           |       |  |                 |         |       |  |  |    |  |  |  |       |  |  |  |              | 
|                      | WDUV-FM              |           |  |            | 105.5 MHz |       |  |                 | 2/1/04  |       |  |  | C1 |  |  |  | 410 m |  |  |  | 46 kw        | 
|                      | WWRM-FM              |           |  |            | 94.9 MHz  |       |  |                 | 2/1/04  |       |  |  | C  |  |  |  | 470 m |  |  |  | 100 kw       | 
|                      | WPOI-FM              |           |  |            | 101.5 MHz |       |  |                 | 2/1/04  |       |  |  | C  |  |  |  | 470 m |  |  |  | 100 kw       | 
|                      | WSUN-FM              |           |  |            | 97.1 MHz  |       |  |                 | 2/1/04  |       |  |  | C2 |  |  |  | 224 m |  |  |  | 11.5 kw      | 
|                      | WBBY-FM              |           |  |            | 107.3 MHz |       |  |                 | 2/1/04  |       |  |  | C1 |  |  |  | 182 m |  |  |  | 100 kw       | 
|                      | WHPT-FM              |           |  |            | 102.5 MHz |       |  |                 | 2/1/04  |       |  |  | C  |  |  |  | 503 m |  |  |  | 100 kw       | 

11



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##### Table of Contents



|                      |         |           |  |            |           |       |  |                 |        |       |  |  |    |  |  |  |       |  |  |  |             | 
|--------------------- | ------- | --------- |  | ---------- | --------- | ----- |  | --------------- | ------ | ----- |  |  | -- |  |  |  | ----- |  |  |  | ----------- | 
|                      |         |           |  | Expiration |           |       |  |                 |        |      
|Market(1) and Station |         |           |  | Date       |           |       |  | Height Above    |        |      
|Call Letters          |         | Frequency |  | of License |           | Class |  | Average Terrain |        | Power
|                      |         |           |  |            |           |       |  |                 |        |      
|                      | Tulsa   |           |  |            |           |       |  |                 |        |       |  |  |    |  |  |  |       |  |  |  |             | 
|                      | KRMG-AM |           |  |            | 740 KHz   |       |  |                 | 6/1/05 |       |  |  | B  |  |  |  | N.A.  |  |  |  | 50 kw day   | 
|                      |         |           |  |            |           |       |  |                 |        |       |  |  |    |  |  |  |       |  |  |  | 25 kw night | 
|                      | KRAV-FM |           |  |            | 96.5 MHz  |       |  |                 | 6/1/05 |       |  |  | C  |  |  |  | 405 m |  |  |  | 100 kw      | 
|                      | KWEN-FM |           |  |            | 95.5 MHz  |       |  |                 | 6/1/05 |       |  |  | C  |  |  |  | 405 m |  |  |  | 100 kw      | 
|                      | KRTQ-FM |           |  |            | 102.3 MHz |       |  |                 | 6/1/05 |       |  |  | C2 |  |  |  | 150 m |  |  |  | 50 kw       | 
|                      | KJSR-FM |           |  |            | 103.3 MHz |       |  |                 | 6/1/05 |       |  |  | C  |  |  |  | 390 m |  |  |  | 100 kw      | 



---



|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(1) | Metropolitan market served; city of license may
    differ.                                                                              
|(2) | Station operating at these parameters pursuant to
    temporary authority. An FCC application for a permanent license
    has been filed.
|(3) | Cox Radio provides sales and other services to
    this station pursuant to a JSA.                                                       
|(4) | Station operating at these parameters pursuant to
    temporary authority. An FCC application for a permanent license
    will be filed. 

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 (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 members of the public. When reviewing an
assignment or transfer application, the FCC is prohibited from
considering whether the public interest might be served by an
assignment or transfer 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 was 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 equity and debt
interests if they exceed 33% of a station licensees total
assets when combined and if the party holding the interest
either (a) supplies more than 15% of the stations
total weekly programming 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.

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
(collectively Aliens), 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

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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.


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



| |   |                                        
| | - | ---------------------------------------
| |  | Orlando, Florida;                      
|
| |  | Charlotte, North Carolina;             
|
| |  | Pittsburgh and Johnstown, Pennsylvania;
|
| |  | Dayton and Steubenville, Ohio;         
|
| |  | Atlanta, Georgia;                      
|
| |  | San Francisco and San Jose, California;
|
| |  | El Paso, Texas;                        
|
| |  | Seattle, Washington; and               
|
| |  | Reno, Nevada.                          

Cox Enterprises also 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.

Local
Radio Ownership Rule and Radio Market Concentration
Issues

The FCCs local radio multiple ownership
rule provides for certain limits on 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 commercial
    radio stations, a party may own, operate or control up to eight
    commercial radio stations, not more than five of which are in
    the same broadcast service (i.e.,AM or FM);                                                                                                 
|
| |  | In a radio market with between 30 and 44
    (inclusive) commercial radio stations, a party may own,
    operate or control up to seven commercial radio stations, not
    more than four of which are in the same broadcast service;                                                                                              
|
| |  | In a radio market with between 15 and 29
    (inclusive) commercial radio stations, a party may own,
    operate or control up to six commercial radio stations, not more
    than four of which are in the same broadcast service; and                                                                                            
|
| |  | In a radio market with 14 or fewer commercial
    radio stations, a party may own, operate or control up to five
    commercial 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 percent of the stations in
    the market.

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Notwithstanding the limits contained in the
FCCs local radio multiple ownership rule, the FCC has the
authority 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. The FCC has delayed its
approval of a number of proposed radio station purchases by
various parties because of concerns about market concentration
and has withheld 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. Also, the FCC will issue
specific public notice of its intention to conduct additional
ownership concentration analysis, and solicit public comment on
the issue of concentration and its effect on competition
and diversity, with respect to particular applications for
consent to radio station acquisitions based on advertising
revenue shares or other criteria. FCC action on applications so
designated typically may be delayed from a period of a few
additional weeks to a year or more.

The FCC does not currently regulate the number of
radio stations that may be owned or controlled by one entity
nationally.

Local
Marketing Agreements and Joint Sales Agreements

A significant number of radio broadcast
licensees, including Cox Radio, 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 subject to 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. 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 on the other licensees station for its own account
but does not provide any programming to the other
licensees station. This arrangement is also subject to
ultimate control by the latter licensee.

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 radio station being programmed pursuant to
an LMA is considered an attributable ownership interest if the
holder of the LMA either (a) owns a radio station,
television station or a daily newspaper in the same market or
(b) has a combined equity/debt interest in the licensee
with a value exceeding 33% of the station licensees total
assets. JSAs are not attributable under the FCCs ownership
rules.

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.

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| |   |                                                                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In large markets, i.e.,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 the local television ownership rule, 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).

Newspaper/Broadcast
Cross-Ownership Rule

The FCCs rules prohibit the common
ownership of a radio or television broadcast station and a daily
newspaper in the same market. Under current policy, the FCC will
grant 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, (i.e., 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
(formerly WJZF-FM) in Atlanta, Georgia, was granted pursuant to
a temporary waiver and is conditioned on the outcome of the
FCCs biennial review of its ownership rules, as discussed
below.

Biennial
Review of Broadcast Ownership Rules

On September 23, 2002, the FCC released a
Notice of Proposed Rule Making opening an omnibus ownership
proceeding to examine all of the FCCs broadcast ownership
rules. This overarching review of media ownership rules is the
FCCs first ownership rulemaking since the United States
Court of Appeals for the District of Columbia Circuit overturned
some of the ownership rules in 2002. Accordingly, while many of
the rules had either been recently reviewed or were under review
at the time of the court decision, this rulemaking is the
FCCs first attempt to provide a comprehensive analysis of
its media ownership rules. Among the rules under examination are
the radio/television cross-ownership rule, the
newspaper/broadcast cross-ownership rule and the local radio
ownership limits.

Expansion of Cox Radios broadcast
operations on both a local and national level will continue to
be subject to the FCCs ownership rules and any changes
that may be adopted pursuant to the biennial review of other FCC
proceedings. 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 Cox Radio and our investors. We cannot predict the
ultimate outcome of the FCCs ownership proceedings or its
impact on our business and operations.

Digital
Audio Broadcasting

To facilitate the development of digital audio
broadcasting, or digital radio, in October 2002, the FCC adopted
interim rules that permit AM and FM stations to transmit analog
and digital signals simultaneously using a single channel. The
FCCs new rules permit AM (during daytime operation only)
and FM stations to commence digital operation on a voluntary
basis upon notification to the FCC. We plan to begin digital
operation at each of our Atlanta and Miami stations during 2003.
The FCC will consider long-term licensing and service rules for
digital operation in a future proceeding. We cannot predict at
this time the ultimate impact of this new technology on our
business.

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Programming
and Operation

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

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.

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, 2002, we employed 1,564
full-time and 664 part-time employees. We believe our relations
with 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. We do not believe
that the loss of any one of these on-air personalities would
have a material adverse effect on our consolidated financial
condition or results of operations.

Patents and Trademarks

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

Available Information

Our Internet address is
http://www.coxradio.com.At this time, our annual reports
on Form 10-K are available on our Internet web site. We are
actively working to provide access to our quarterly reports on

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Form 10-Q, our current reports on
Form 8-K and any amended periodic reports through our web
site, and until this capability is available, we will
voluntarily provide electronic copies of our filings free of
charge upon request.


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:



| |   |                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------
| |  | Advertising demand in our markets;                                                                                            
|
| |  | The possibility that advertisers may cancel or
    postpone schedules in response to political events;                        
|
| |  | General economic and business conditions, both
    nationally and in the regions in which Cox Radio operates;                 
|
| |  | Technology changes;                                                                                                           
|
| |  | Our ability to execute our Internet strategy
    effectively and the uncertainty surrounding Internet royalty
    obligations;
|
| |  | Competition;                                                                                                                  
|
| |  | Our success in executing and integrating
    acquisitions;                                                                    
|
| |  | Our ability to generate sufficient cash flow to
    meet our debt service obligations and finance operations;                 
|
| |  | Our ability to secure financing on attractive
    terms;                                                                      
|
| |  | Changes in business strategy or development plans;                                                                            
|
| |  | The ability to attract and retain qualified
    personnel;                                                                    
|
| |  | Existing governmental regulations and changes in,
    or the failure to comply with, governmental regulations;                
|
| |  | Liability and other claims asserted against Cox
    Radio; and                                                                
|
| |  | The level of success of our operating initiatives
    and strategy.                                                           

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.

Additional factors that could have a material and
adverse impact on our business are set forth below.

Risk Factors

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

Risks Associated
with our Growth Strategy

Our business strategy depends on developing
strong radio station clusters through the successful integration
of recently acquired stations, including the development of
under-performing radio stations and the opportunistic
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

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be available on attractive terms or that FCC
rules will continue to permit certain acquisitions. 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 Cox Radio and new stations or management groups can be
accomplished successfully or on a timely basis or that our
acquisition strategy can be implemented.


A significant portion of our business
historically has been conducted in the Atlanta market. Net
revenues earned from radio stations located in Atlanta
represented 26%, 28% and 29% of total revenues for the years
ended December 31, 2002, 2001 and 2000, respectively.

Competition

The radio broadcasting industry is a highly
competitive business. Our radio stations compete against other
radio stations and other media (including new media technologies
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. Management
believes that radio stations that elect to take advantage of
clustering opportunities may, in certain circumstances, have
lower operating costs and may be able to offer advertisers more
attractive rates and services. 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.

Government
Regulation of the Broadcasting Industry

The radio broadcasting industry is subject to
extensive and changing regulation. Among other things, the
Communications Act and FCC rules and policies limit the number
of radio stations that one entity can own in a given market. The
Communications Act and FCC rules and policies also require FCC
approval for transfers of control and assignments of FCC
licenses. The filing of petitions or complaints against FCC
licensees such as Cox Radio 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 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 2003 and 2006.
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 from having our
current licenses renewed, there can be no assurance that the
licenses will be renewed. Failure to obtain the renewal of any
of our broadcast licenses or to obtain FCC approval for an
assignment or transfer to Cox Radio of a license in connection
with a radio station acquisition may have a material adverse
effect on our business and operations. In addition, if Cox Radio
or any of its officers, directors or significant shareholders
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 commence a
proceeding to impose sanctions upon Cox Radio 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.

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Control of Cox
Radio by Cox Enterprises and Potential Conflicts of
Interest

Cox Enterprises, through wholly-owned
subsidiaries, owns approximately 62% of the outstanding common
stock of Cox Radio and has approximately 94% of the voting power
of Cox Radio. As a result, Cox Enterprises has sufficient voting
power to elect all the members of the Board of Directors of Cox
Radio and effect transactions without the vote of a majority of
our public shareholders. Our Amended and Restated Certificate of
Incorporation, as amended, and Amended and Restated Bylaws also
contain certain anti-takeover provisions. The interests of Cox
Enterprises, which operates businesses in other industries,
including television broadcasting, broadband communications,
auto auctions and newspapers, may from time to time diverge from
the interests of Cox Radio. In addition, from time to time, we
enter into transactions with Cox Enterprises or its affiliates
and have entered into a credit facility with Cox Enterprises.
Conflicts of interest between Cox Radio and Cox Enterprises
could arise with respect to business dealings between them,
including potential acquisitions of businesses or properties,
the issuance of additional securities and the election of new or
additional members of Cox Radios Board of Directors. The
Audit Committee of our Board of Directors consists of
independent directors and reviews related party transactions
between Cox Radio and Cox Enterprises and its other affiliates.
There can be no assurance that any conflicts of interest will be
resolved in favor of Cox Radio.




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;                                        
| |  | Bridgeport, New Haven and Stamford-Norwalk,
    Connecticut;
| |  | Dayton, Ohio;                                               
| |  | Greenville, South Carolina;                                 
| |  | Houston and San Antonio, Texas;                             
| |  | Jacksonville, Miami, 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.                                            

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We own studio and office facilities in:



| |   |                                              
| | - | ---------------------------------------------
| |  | Birmingham, Alabama;                         
| |  | Dayton, Ohio;                                
| |  | Jacksonville, 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;                                         
| |  | 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

In October 1999, the Radio Music License
Committee, of which Cox Radio is a participant, filed a motion
in the New York courts against Broadcast Music, Inc. to commence
a rate-making proceeding on behalf of the radio industry and to
seek a determination of fair and reasonable industry-wide
license fees for the broadcast of music. Cox Radio is currently
operating under interim license agreements for the period
commencing January 1, 1997 at the rates and terms set forth
in prior agreements. In September 2002, the rate court
proceeding between the Radio Music License Committee and
Broadcast Music, Inc. was adjourned, as the parties are engaged
in settlement discussions. The outcome of this matter cannot be
predicted at this time.

On October 11, 2000, Cox Radio and its
controlling shareholder, Cox Broadcasting, Inc., were sued in
Georgia federal court by broadcast station broker, Force
Communications, for alleged breach of contract and other
theories involving a failure to pay the broker a commission
allegedly due on two transactions. The suit sought contract
damages in excess of $5 million plus interest, costs, expenses
and attorneys fees. Following completion of discovery, the
parties filed cross-motions for summary judgment and on
July 1, 2002, the court granted defendants motion for
summary judgment and denied Force Communications
cross-motion for partial summary judgment. On July 5, 2002,
the court entered judgment in favor of Cox Radio and Cox
Broadcasting, Inc. on all counts. On July 31, 2002, Force
Communications filed a notice of appeal to the United States
Court of Appeals for the 11th Circuit from the order entering
summary judgment in favor of Cox Radio and Cox Broadcasting,
Inc. and from the entry of judgment. Force Communications, Cox
Radio and Cox Broadcasting, Inc. agreed on January 23, 2003
to resolve this matter through binding arbitration. Pursuant to
that agreement, the arbitrator will issue an award that may
range from a low of $600,000 to a high of $1.6 million, and
following payment of such arbitration award, the

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11th Circuit appeal will be dismissed with
prejudice. The outcome of this matter cannot be predicted at
this time.


On June 13, 2001, Cox Radio was named as
defendant in a putative class action suit filed in an amended
complaint in the state court in Fulton County, Georgia, alleging
violations of the Federal Telephone Consumer Protection Act. The
complaint seeks statutory damages in the amount of $1,500 plus
attorneys fees, on behalf of each person throughout
the State of Georgia who received an unsolicited
pre-recorded telephone message delivering an
advertisement from a Cox Radio radio station. The
parties have entered into agreements, approved by the court,
staying all proceedings while awaiting a ruling by the Georgia
Court of Appeals in a similar action pending against a
third-party radio broadcast company. The Georgia Court of
Appeals vacated and remanded the third-party case March 14, 2003
with instructions to the trial court to consider constitutional
issues. At the present time, Cox Radio cannot reasonably
estimate the possible loss or range of loss with respect to this
lawsuit. Cox Radio intends to defend this action vigorously. The
outcome of this matter cannot be predicted at this time.

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




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

None.

21



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##### Table of Contents






PART II




ITEM 5.     Market
for Registrants Common Equity and Related Stockholder
Matters

The information required by this Item is
incorporated by reference to the section entitled
Shareholder Information of our 2002 Annual Report to
Shareholders.




ITEM 6.     Selected
Consolidated Financial Data

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

|                                                                           |  |                                              |         |      |  |      |         |      |  |      |         |   |  |   |       |   |  |   |       | 
|-------------------------------------------------------------------------- |  | -------------------------------------------- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- | - |  | - | ----- | - |  | - | ----- | 
|                                                                           |  |                                             
|                                                                           |  | Year Ended December 31,                     
|                                                                           |  |                                             
|                                                                           |  | 2002                                         |         | 2001 |  | 2000 |         | 1999 |  | 1998
|                                                                           |  |                                              |         |      |  |      |         |      |  |     
|                                                                           |  |                                             
|                                                                           |  | (Amounts in Millions, Except Per Share Data)
|Statements of operations data:                                             |  |                                              |         |      |  |      |         |      |  |      |         |   |  |   |       |   |  |   |       | 
|Net revenues(1)                                                            |  | $                                            | 420.6   |      |  | $    | 395.3   |      |  | $    | 369.4   |   |  | $ | 300.5 |   |  | $ | 261.2 | 
|Cost of services (exclusive of depreciation shown
    separately below)(2) |  |                                              | 93.2    |      |  |      | 92.4    |      |  |      | 80.7    |   |  |   | 68.9  |   |  |   | 62.2  | 
|Selling, general and administrative                                        |  |                                              | 161.1   |      |  |      | 154.0   |      |  |      | 140.9   |   |  |   | 115.0 |   |  |   | 104.8 | 
|Corporate general and administrative                                       |  |                                              | 15.5    |      |  |      | 13.3    |      |  |      | 13.3    |   |  |   | 10.1  |   |  |   | 8.4   | 
|Depreciation                                                               |  |                                              | 12.1    |      |  |      | 11.4    |      |  |      | 7.8     |   |  |   | 7.2   |   |  |   | 5.8   | 
|Amortization                                                               |  |                                              | 0.1     |      |  |      | 58.2    |      |  |      | 35.2    |   |  |   | 21.9  |   |  |   | 17.6  | 
|Loss on sales of assets                                                    |  |                                              | 0.6     |      |  |      | 0.3     |      |  |      | 0.7     |   |  |   |      |   |  |   |      | 
|Gain on sales of radio stations                                            |  |                                              | (0.3    | )    |  |      | (2.4    | )    |  |      | (475.2  | ) |  |   | (40.5 | ) |  |   |      | 
|                                                                           |  |                                              |         |      |  |      |         |      |  |      |         |   |  |   |       |   |  |   |       | 
|Operating income                                                           |  |                                              | 138.3   |      |  |      | 68.1    |      |  |      | 566.0   |   |  |   | 117.9 |   |  |   | 62.4  | 
|Interest expense, net                                                      |  |                                              | 39.7    |      |  |      | 47.5    |      |  |      | 32.5    |   |  |   | 22.8  |   |  |   | 16.9  | 
|Net income(3)                                                              |  |                                              | 45.9    |      |  |      | 20.7    |      |  |      | 305.9   |   |  |   | 55.3  |   |  |   | 23.0  | 
|Net income per common
    share  basic(4)                                 |  |                                              | 0.46    |      |  |      | 0.21    |      |  |      | 3.28    |   |  |   | 0.64  |   |  |   | 0.27  | 
|Net income per common
    share  diluted(4)                               |  |                                              | 0.46    |      |  |      | 0.21    |      |  |      | 3.26    |   |  |   | 0.64  |   |  |   | 0.27  | 
|Balance sheet data (end of period):                                        |  |                                              |         |      |  |      |         |      |  |      |         |   |  |   |       |   |  |   |       | 
|Cash and cash equivalents                                                  |  | $                                            | 4.7     |      |  | $    | 8.0     |      |  | $    | 7.0     |   |  | $ | 14.7  |   |  | $ | 6.5   | 
|Intangible assets, net(5)                                                  |  |                                              | 2,070.0 |      |  |      | 2,095.7 |      |  |      | 2,103.0 |   |  |   | 829.3 |   |  |   | 590.7 | 
|Total assets                                                               |  |                                              | 2,271.7 |      |  |      | 2,286.7 |      |  |      | 2,317.8 |   |  |   | 986.6 |   |  |   | 753.1 | 
|Total debt (including amounts due to/from Cox
    Enterprises)             |  |                                              | 611.5   |      |  |      | 703.4   |      |  |      | 737.5   |   |  |   | 437.2 |   |  |   | 269.9 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Total revenues less advertising agency
    commissions.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(2) | Includes programming and production expenses,
    which represents all costs of services (exclusive of
    depreciation).                                                                                                                                                                                                                                                                                                                                                                             
|(3) | Net income for 2002 includes a charge 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. Net income for 2001 includes a charge
    of $0.8 million related to the cumulative effect of an
    accounting change resulting from adoption of SFAS No. 133,
    Accounting for Derivative Instruments and Hedging
    Activities.
|(4) | Basic and diluted net income per common share for
    the years ended December 31, 1999 and 1998 have been
    restated to give effect to a three-for-one stock split effective
    May 19, 2000.                                                                                                                                                                                                                                                                                                     
|(5) | Intangible assets include FCC licenses, goodwill
    and other intangible assets.                                                                                                                                                                                                                                                                                                                                                                                                                     

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

General

Cox Radio, Inc. is 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 62% of the common
stock of Cox Radio and has approximately 94% of the voting power
of Cox Radio.

The primary source of our revenues is the sale of
local and national advertising to be broadcast on our radio
stations. Historically, approximately 73% 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 or services, which can be used by the
stations in their business operations. We generally confine the
use of such trade transactions to promotional items or services
for which we would otherwise have paid cash. 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.

Critical Accounting Estimates

Use of
Estimates

Our accounting and reporting policies are in
accordance with accounting principles generally accepted in the
United States of America and conform to general practices within
the radio broadcasting industry. An accounting estimate would be
a critical accounting estimate for purposes of the disclosure
herein 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 our financial
statements.

Impairment of
Intangible Assets

On January 1, 2002, we adopted SFAS
No. 142, Goodwill and Other Intangible Assets,
and were required to assess our goodwill and FCC licenses for
impairment within the first six months of 2002, and on at least
an annual basis thereafter. Our intangible assets consist
primarily of FCC licenses, but also include goodwill and other
intangible assets. At December 31, 2002, we had
approximately $2.1 billion in intangible assets, which
represents approximately 91% of our total assets. The fair value
of the FCC licenses is dependent on the cash flows of our
stations. In assessing the recoverability of our intangible
assets, we utilize independent appraisals to determine the fair
market value. These appraisals principally

23



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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. In the future, if these estimates change, we may be
required to record impairment charges for these assets, which
could have a material impact on our financial condition, changes
in financial condition or results of operations.


Allowance for
Doubtful Accounts

A provision for doubtful accounts is charged to
operations based on our evaluation of the probable losses in our
accounts and notes receivable portfolio. This 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.

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.

Income Tax
Estimates

We evaluate our effective tax rates regularly and
adjust rates when appropriate based on currently available
information relative to statutory rates, apportionment factors
and the applicable taxable income in the jurisdictions in which
we operate, among other factors. Certain of our deferred tax
assets are comprised of loss carryforwards for federal and state
income tax filing purposes for which recovery is dependent on
the amount and timing of taxable income we ultimately generate
in the future, as well as other factors. Based on our estimate
of future taxable income, there are no potential limitations to
the utilization of these deferred tax assets, and therefore, no
valuation allowance has been recorded. Tax liabilities are
recorded, based on our assessment of the risk of loss in
accordance with SFAS No. 5, to address potential exposures
involving tax positions we have taken that could be challenged
by taxing authorities. These potential exposures result from the
varying application of statutes, rules, regulations and
interpretations. We believe our estimate of our tax liabilities
is a critical accounting estimate as it contains assumptions
based on past experiences and judgments about potential actions
by taxing jurisdictions. It is reasonably likely that the
ultimate resolution of these matters may be greater or less than
the amount that we have currently accrued. See Note 8 to our
consolidated financial statements included in this report.

Results of Operations

This discussion should be read in conjunction
with our accompanying audited consolidated financial statements
and notes thereto. Our 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.

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##### Table of Contents



Year Ended December 31, 2002 Compared
with Year Ended December 31, 2001

|                   |          |                        |         |              |  |          |         |          |  |   |        |        |  |  |      |       | 
|------------------ | -------- | ---------------------- | ------- | ------------ |  | -------- | ------- | -------- |  | - | ------ | ------ |  |  | ---- | ----- | 
|                   |          | December 31,           |         | December 31, |  |          |         |         
|                   |          | 2002                   |         | 2001         |  | $ Change |         | % Change
|                   |          |                        |         |              |  |          |         |         
|                   |          |                        |         |             
|                   |          | (Amounts in Thousands) |         |             
|Net revenues:      |          |                        |         |              |  |          |         |          |  |   |        |        |  |  |      |      
|                   | Local    |                        | $       | 308,872      |  |          | $       | 292,507  |  |   | $      | 16,365 |  |  |      | 5.6%  | 
|                   | National |                        |         | 89,935       |  |          |         | 81,275   |  |   |        | 8,660  |  |  |      | 10.7% | 
|                   | Other    |                        |         | 21,785       |  |          |         | 21,521   |  |   |        | 264    |  |  |      | 1.2%  | 
|                   |          |                        |         |              |  |          |         |          |  |   |        |        |  |  |      |      
|Total net revenues |          | $                      | 420,592 |              |  | $        | 395,303 |          |  | $ | 25,289 |        |  |  | 6.4% |      
|                   |          |                        |         |              |  |          |         |          |  |   |        |        |  |  |      |      

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/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, or non-traditional revenues, are
comprised of Internet revenues, syndicated radio program
revenues, network revenues and revenues from community events
and sponsorships.

The total increase in net revenues was primarily
a result of impressive revenue growth from a majority of our
radio clusters. The leaders with double-digit revenue growth
over 2001 included Houston, up 16%; Richmond, up 16%; Tampa, up
16%; Long Island, up 14%; Louisville, up 13%; Jacksonville, up
12%; Honolulu, up 11%; and Miami, up 11%. In Atlanta, our
largest market, revenues were down 1% versus 2001 primarily as a
result of a lackluster performance from WFOX-FM during 2002.
Excluding WFOX-FM, net revenues in Atlanta would have been up 1%
during 2002. In February 2003, in order to increase audience
share, WFOX-FM was reformatted to an urban contemporary format
in response to the changing preferences of its targeted audience
in the Atlanta markets. As a result of this format change, we
anticipate higher marketing and promotion expense and lower net
revenues on this station in 2003 as we educate the market about
the new format and realign advertisers for the new target
audience.

National revenue growth of 10.7% outpaced local
revenue growth of 5.6% during 2002, primarily because 2001
national revenues were negatively impacted more severely than
local revenues during the prior years economic downturn.
Overall growth in revenues was primarily a result of improving
macro economic factors affecting the advertising climate,
coupled with successful execution of our consultative selling
strategy.

|                                                                        |  |                        |        |              |  |          |        |          |  |   |     |  |  |  |      | 
|----------------------------------------------------------------------- |  | ---------------------- | ------ | ------------ |  | -------- | ------ | -------- |  | - | --- |  |  |  | ---- | 
|                                                                        |  | December 31,           |        | December 31, |  |          |        |         
|                                                                        |  | 2002                   |        | 2001         |  | $ Change |        | % Change
|                                                                        |  |                        |        |              |  |          |        |         
|                                                                        |  |                        |        |             
|                                                                        |  | (Amounts in Thousands) |        |             
|Cost of services (exclusive of depreciation shown
    separately below) |  | $                      | 93,152 |              |  | $        | 92,412 |          |  | $ | 740 |  |  |  | 0.8% | 

Cost of services is comprised of expenses
incurred by our technical, news and programming departments. The
increase in cost of services was primarily related to an
increase in sports programming costs of approximately $1.5
million in the Atlanta market and an increase in music license
fees of approximately $1.2 million directly attributable to
higher revenues. These increases were offset by a decrease in
cost of services at Cox Radio Interactive (CXRi) of $0.7 million
as a result of staff reductions. In addition, cost of services
decreased $1.0 million as a result of costs related to lower
profit-sharing revenues for our syndicated programming business.

|                                             |  |                        |         |              |  |          |         |          |  |   |       |  |  |  |      | 
|-------------------------------------------- |  | ---------------------- | ------- | ------------ |  | -------- | ------- | -------- |  | - | ----- |  |  |  | ---- | 
|                                             |  | December 31,           |         | December 31, |  |          |         |         
|                                             |  | 2002                   |         | 2001         |  | $ Change |         | % Change
|                                             |  |                        |         |              |  |          |         |         
|                                             |  |                        |         |             
|                                             |  | (Amounts in Thousands) |         |             
|Selling, general and administrative expenses |  | $                      | 161,093 |              |  | $        | 153,945 |          |  | $ | 7,148 |  |  |  | 4.6% | 

Selling, general and administrative expenses are
comprised of our sales, promotion and general and administrative
departments. Selling expenses increased approximately $5.8
million over 2001, due to

25



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##### Table of Contents



increased commissions as a result of higher
revenues. Selling expenses as a percentage of revenue for the
year were approximately 23.6%, consistent with the level of
costs in 2001. Promotion expenses during 2002 were flat with
2001 as a result of our emphasis on cost controls during 2002.
General and administrative expenses during 2002 increased
approximately $1.3 million over 2001, primarily due to increases
in incentive compensation as a result of improved financial
performance during 2002.


|                                              |  |                        |        |              |  |          |        |          |  |   |       |  |  |  |       | 
|--------------------------------------------- |  | ---------------------- | ------ | ------------ |  | -------- | ------ | -------- |  | - | ----- |  |  |  | ----- | 
|                                              |  | December 31,           |        | December 31, |  |          |        |         
|                                              |  | 2002                   |        | 2001         |  | $ Change |        | % Change
|                                              |  |                        |        |              |  |          |        |         
|                                              |  |                        |        |             
|                                              |  | (Amounts in Thousands) |        |             
|Corporate general and administrative expenses |  | $                      | 15,489 |              |  | $        | 13,280 |          |  | $ | 2,209 |  |  |  | 16.6% | 

The increase in corporate general and
administrative expenses was primarily a result of an increase in
salaries and related benefits, including incentive compensation,
which increased $0.8 million over 2001, as a result of an
enhanced regional operating management structure as well as
higher incentive compensation due to improved financial
performance in 2002. Also driving this increase were expenses
incurred to create and maintain an in-house market research
group of approximately $0.7 million and increased corporate rent
expense of approximately $0.2 million.

|             |  |                        |        |              |  |          |        |          |  |   |         |   |  |  |       |   
|------------ |  | ---------------------- | ------ | ------------ |  | -------- | ------ | -------- |  | - | ------- | - |  |  | ----- | --
|             |  | December 31,           |        | December 31, |  |          |        |         
|             |  | 2002                   |        | 2001         |  | $ Change |        | % Change
|             |  |                        |        |              |  |          |        |         
|             |  |                        |        |             
|             |  | (Amounts in Thousands) |        |             
|Depreciation |  | $                      | 12,096 |              |  | $        | 11,392 |          |  | $ | 704     |   |  |  | 6.2   | % 
|Amortization |  |                        | 118    |              |  |          | 58,243 |          |  |   | (58,125 | ) |  |  | (99.8 | )%

Depreciation increased as a result of additions
to property and equipment during 2002 totaling approximately
$11.9 million. Amortization decreased during 2002 because we
adopted SFAS No. 142, which requires that goodwill and
certain indefinite lived intangible assets, including FCC
licenses, no longer be amortized but instead be tested for
impairment at least annually. Amortization for 2002 represents
expense for finite lived intangible assets only and is
consistent with amortization expense for such assets in 2001.
See Note 7 to our consolidated financial statements
included in this report for further discussion of our adoption
of SFAS No. 142.

|                                |  |                        |      |              |  |          |        |          |  |   |       |  |  |  |       |   
|------------------------------- |  | ---------------------- | ---- | ------------ |  | -------- | ------ | -------- |  | - | ----- |  |  |  | ----- | --
|                                |  | December 31,           |      | December 31, |  |          |        |         
|                                |  | 2002                   |      | 2001         |  | $ Change |        | % Change
|                                |  |                        |      |              |  |          |        |         
|                                |  |                        |      |             
|                                |  | (Amounts in Thousands) |      |             
|Loss on sales of assets         |  | $                      | 617  |              |  | $        | 337    |          |  | $ | 280   |  |  |  | 83.1  | % 
|Gain on sales of radio stations |  |                        | (304 | )            |  |          | (2,434 | )        |  |   | 2,130 |  |  |  | (87.5 | )%

Gains on sales of radio stations decreased during
2002, primarily as a result of the sale of WHOO-AM in Orlando in
2001, which generated a pre-tax gain of $2.4 million. During
2002, we disposed of the assets related to certain radio
stations in the Jacksonville and Honolulu markets, resulting in
a pre-tax gain totaling $0.3 million. In 2001, we disposed of
the assets related to certain radio stations in the Orlando,
Tulsa and Richmond markets, resulting in a pre-tax loss of $0.1
million.

|                 |  |                        |         |              |  |          |        |          |  |   |        |  |  |  |        | 
|---------------- |  | ---------------------- | ------- | ------------ |  | -------- | ------ | -------- |  | - | ------ |  |  |  | ------ | 
|                 |  | December 31,           |         | December 31, |  |          |        |         
|                 |  | 2002                   |         | 2001         |  | $ Change |        | % Change
|                 |  |                        |         |              |  |          |        |         
|                 |  |                        |         |             
|                 |  | (Amounts in Thousands) |         |             
|Operating income |  | $                      | 138,331 |              |  | $        | 68,128 |          |  | $ | 70,203 |  |  |  | 103.0% | 

Operating income increased primarily as a result
of the implementation of SFAS No. 142 as discussed above.
In addition, operating income increased due to increased
revenues partially offset by the increase in station operating,
selling and general and administrative expenses as well as
corporate general and administrative expenses as discussed above.

|                 |  |                        |        |              |  |          |        |          |  |   |        |   |  |  |       |   
|---------------- |  | ---------------------- | ------ | ------------ |  | -------- | ------ | -------- |  | - | ------ | - |  |  | ----- | --
|                 |  | December 31,           |        | December 31, |  |          |        |         
|                 |  | 2002                   |        | 2001         |  | $ Change |        | % Change
|                 |  |                        |        |              |  |          |        |         
|                 |  |                        |        |             
|                 |  | (Amounts in Thousands) |        |             
|Interest expense |  | $                      | 39,682 |              |  | $        | 49,008 |          |  | $ | (9,326 | ) |  |  | (19.0 | )%

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Interest expense decreased as a result of the
following factors: a lower overall outstanding debt balance; a
reduction in the average interest rate; and the termination of
one of our interest rate swap agreements in 2002. In 2002, the
overall outstanding debt balances decreased approximately $90
million. The average interest rate applied to the outstanding
floating rate debt decreased from 2.8% in 2001 to 2.1% in 2002.
In addition to the decreases in the outstanding debt and the
decrease in floating interest rates, an interest rate swap
agreement with a notional principal amount of $25 million, which
required us to pay 6.2% interest, expired. This further reduced
interest expense for the year. See Note 10 to our consolidated
financial statements included in this report for further
discussion.

|                   |          |                        |        |              |  |          |        |          |   |   |        |        |  |  |        |       |  
|------------------ | -------- | ---------------------- | ------ | ------------ |  | -------- | ------ | -------- | - | - | ------ | ------ |  |  | ------ | ----- | -
|                   |          | December 31,           |        | December 31, |  |          |        |         
|                   |          | 2002                   |        | 2001         |  | $ Change |        | % Change
|                   |          |                        |        |              |  |          |        |         
|                   |          |                        |        |             
|                   |          | (Amounts in Thousands) |        |             
|Income taxes:      |          |                        |        |              |  |          |        |          |   |   |        |        |  |  |        |      
|                   | Current  |                        | $      | 14,722       |  |          | $      | 10,180   |   |   | $      | 4,542  |  |  |        | 44.6  | %
|                   | Deferred |                        |        | 23,576       |  |          |        | (11,487  | ) |   |        | 35,063 |  |  |        | 305.2 | %
|                   |          |                        |        |              |  |          |        |          |   |   |        |        |  |  |        |      
|Total income taxes |          | $                      | 38,298 |              |  | $        | (1,307 | )        |   | $ | 39,605 |        |  |  | 3030.2 | %    
|                   |          |                        |        |              |  |          |        |          |   |   |        |        |  |  |        |      

Our effective income tax rate for 2002 was
approximately 39%. During 2001, we recorded a $10.9 million
deferred tax benefit related to a revision to our effective
state income tax rate. Excluding this item, our pro forma
effective income tax rate for 2001 was approximately 48%. The
decline in our effective income tax rate from 2001 to 2002 is
due to elimination of non-deductible amortization for tax
purposes resulting from the adoption of SFAS No. 142 as
discussed in Note 7 to our consolidated financial statements
included in this report.

|           |  |                        |        |              |  |          |        |          |  |   |        |  |  |  |        | 
|---------- |  | ---------------------- | ------ | ------------ |  | -------- | ------ | -------- |  | - | ------ |  |  |  | ------ | 
|           |  | December 31,           |        | December 31, |  |          |        |         
|           |  | 2002                   |        | 2001         |  | $ Change |        | % Change
|           |  |                        |        |              |  |          |        |         
|           |  |                        |        |             
|           |  | (Amounts in Thousands) |        |             
|Net income |  | $                      | 45,941 |              |  | $        | 20,691 |          |  | $ | 25,250 |  |  |  | 122.0% | 

Net income increased primarily as a result of the
reasons discussed above and offset by a $13.9 million
after-tax charge in 2002 related to the cumulative effect of an
accounting change as a result of adopting SFAS No. 142.

Year Ended December 31, 2001 Compared with
Year Ended December 31, 2000

|                   |          |                        |         |              |  |          |         |          |  |   |        |        |   |  |     |      |   
|------------------ | -------- | ---------------------- | ------- | ------------ |  | -------- | ------- | -------- |  | - | ------ | ------ | - |  | --- | ---- | --
|                   |          | December 31,           |         | December 31, |  |          |         |         
|                   |          | 2001                   |         | 2000         |  | $ Change |         | % Change
|                   |          |                        |         |              |  |          |         |         
|                   |          |                        |         |             
|                   |          | (Amounts in Thousands) |         |             
|Net revenues:      |          |                        |         |              |  |          |         |          |  |   |        |        |   |  |     |     
|                   | Local    |                        | $       | 292,507      |  |          | $       | 267,563  |  |   | $      | 24,944 |   |  |     | 9.3  | % 
|                   | National |                        |         | 81,275       |  |          |         | 84,499   |  |   |        | (3,224 | ) |  |     | (3.8 | )%
|                   | Other    |                        |         | 21,521       |  |          |         | 17,342   |  |   |        | 4,179  |   |  |     | 24.1 | % 
|                   |          |                        |         |              |  |          |         |          |  |   |        |        |   |  |     |     
|Total net revenues |          | $                      | 395,303 |              |  | $        | 369,404 |          |  | $ | 25,899 |        |   |  | 7.0 | %   
|                   |          |                        |         |              |  |          |         |          |  |   |        |        |   |  |     |     

Net revenues increased primarily as a result of
the acquisitions of stations in Houston and Richmond during late
2000 and in Greenville and Richmond in early 2001, which
collectively contributed $43 million of revenues in 2001 versus
$12 million during 2000. In Atlanta, the addition of
WALR-FM in late 2000 contributed to our stations revenue
growth in that market of 6% during 2001. Excluding WALR-FM, net
revenues generated from our stations in the Atlanta market were
flat when comparing 2001 to 2000. These increases were offset by
declines in revenues in most of our other large markets as a
result of deteriorating macro economic factors, including the
impact of the events of September 11, 2001, which negatively
impacted the advertising climate including Miami, down 1%; Long
Island, down 5%; and Jacksonville, down 13%.

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##### Table of Contents



|                                                                        |  |                        |        |              |  |          |        |          |  |   |        |  |  |  |      |  
|----------------------------------------------------------------------- |  | ---------------------- | ------ | ------------ |  | -------- | ------ | -------- |  | - | ------ |  |  |  | ---- | -
|                                                                        |  | December 31,           |        | December 31, |  |          |        |         
|                                                                        |  | 2001                   |        | 2000         |  | $ Change |        | % Change
|                                                                        |  |                        |        |              |  |          |        |         
|                                                                        |  |                        |        |             
|                                                                        |  | (Amounts in Thousands) |        |             
|Cost of services (exclusive of depreciation shown
    separately below) |  | $                      | 92,412 |              |  | $        | 80,715 |          |  | $ | 11,697 |  |  |  | 14.5 | %

The increase in cost of services was primarily a
result of the acquisition of stations in Houston, Richmond,
Greenville and WALR-FM in Atlanta during late 2000 and early
2001,which accounted for approximately $8.2 million of the
increase.

|                                             |  |                        |         |              |  |          |         |          |  |   |        |  |  |  |     |  
|-------------------------------------------- |  | ---------------------- | ------- | ------------ |  | -------- | ------- | -------- |  | - | ------ |  |  |  | --- | -
|                                             |  | December 31,           |         | December 31, |  |          |         |         
|                                             |  | 2001                   |         | 2000         |  | $ Change |         | % Change
|                                             |  |                        |         |              |  |          |         |         
|                                             |  |                        |         |             
|                                             |  | (Amounts in Thousands) |         |             
|Selling, general and administrative expenses |  | $                      | 153,945 |              |  | $        | 140,879 |          |  | $ | 13,066 |  |  |  | 9.3 | %

Selling expenses increased approximately $10.7
million over 2000 due to increased revenues. Selling cost as a
percentage of revenue for 2001 was approximately 23.7%, somewhat
higher than the level of costs in 2000 of 22.4%, primarily as a
result of higher sales costs in Houston, Richmond and
Greenville. Promotion expenses during 2001 increased $0.7
million as a result of increased marketing in Houston, Richmond
and Greenville and of WALR-FM in Atlanta, which increased
collectively $2.3 million versus 2000. This increase was offset
by management emphasis on cost controls in our other markets
during 2001. General and administrative expenses during 2001
increased approximately $1.5 million primarily as a result of
the addition of stations in Houston, Richmond and Greenville,
which accounted for a $3.1 million increase over 2000. These
increases were offset by decreases in incentive compensation in
2001 as a result of weaker financial performance during 2001
versus 2000.

|                                              |  |                        |        |              |  |          |        |          |  |   |     |   |  |  |      |   
|--------------------------------------------- |  | ---------------------- | ------ | ------------ |  | -------- | ------ | -------- |  | - | --- | - |  |  | ---- | --
|                                              |  | December 31,           |        | December 31, |  |          |        |         
|                                              |  | 2001                   |        | 2000         |  | $ Change |        | % Change
|                                              |  |                        |        |              |  |          |        |         
|                                              |  |                        |        |             
|                                              |  | (Amounts in Thousands) |        |             
|Corporate general and administrative expenses |  | $                      | 13,280 |              |  | $        | 13,347 |          |  | $ | (67 | ) |  |  | (0.5 | )%

Corporate general and administrative expenses
decreased slightly from 2000 because of cost reduction measures
and reductions in incentive compensation and other benefits
during 2001 as a result of weaker financial performance during
2001 versus 2000.

|             |  |                        |        |              |  |          |        |          |  |   |        |  |  |  |      |  
|------------ |  | ---------------------- | ------ | ------------ |  | -------- | ------ | -------- |  | - | ------ |  |  |  | ---- | -
|             |  | December 31,           |        | December 31, |  |          |        |         
|             |  | 2001                   |        | 2000         |  | $ Change |        | % Change
|             |  |                        |        |              |  |          |        |         
|             |  |                        |        |             
|             |  | (Amounts in Thousands) |        |             
|Depreciation |  | $                      | 11,392 |              |  | $        | 7,800  |          |  | $ | 3,592  |  |  |  | 46.1 | %
|Amortization |  |                        | 58,243 |              |  |          | 35,192 |          |  |   | 23,051 |  |  |  | 65.5 | %

Depreciation increased as a result of additions
during 2001 to property and equipment totaling $17 million
and the acquisition of stations including those in Houston,
Richmond and Greenville during late 2000 and early 2001.
Amortization increased due to the significant acquisition
activity during 2000 and 2001 totaling approximately $865
million, a majority of which was attributable to intangible
assets.

|                                |  |                        |        |              |  |          |          |          |  |   |         |   |  |  |       |   
|------------------------------- |  | ---------------------- | ------ | ------------ |  | -------- | -------- | -------- |  | - | ------- | - |  |  | ----- | --
|                                |  | December 31,           |        | December 31, |  |          |          |         
|                                |  | 2001                   |        | 2000         |  | $ Change |          | % Change
|                                |  |                        |        |              |  |          |          |         
|                                |  |                        |        |             
|                                |  | (Amounts in Thousands) |        |             
|Loss on sales of assets         |  | $                      | 337    |              |  | $        | 699      |          |  | $ | (362    | ) |  |  | (51.8 | )%
|Gain on sales of radio stations |  |                        | (2,434 | )            |  |          | (475,201 | )        |  |   | 472,767 |   |  |  | (99.5 | )%

Gains on sales of radio stations decreased during
2001, primarily as a result of gains attributable to two
transactions in 2000. In 2000, we generated a $46.6 million
pre-tax gain on the sale of KACE-FM and KRTO-FM in Los Angeles,
California, and a $429.9 million pre-tax gain on the exchange of
KFI-AM and KOST-FM in Los Angeles, California. All other gains
and losses related to disposals were immaterial during 2001 and
2000.

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##### Table of Contents



|                 |  |                        |        |              |  |          |         |          |  |   |          |   |  |  |       |   
|---------------- |  | ---------------------- | ------ | ------------ |  | -------- | ------- | -------- |  | - | -------- | - |  |  | ----- | --
|                 |  | December 31,           |        | December 31, |  |          |         |         
|                 |  | 2001                   |        | 2000         |  | $ Change |         | % Change
|                 |  |                        |        |              |  |          |         |         
|                 |  |                        |        |             
|                 |  | (Amounts in Thousands) |        |             
|Operating income |  | $                      | 68,128 |              |  | $        | 565,973 |          |  | $ | (497,845 | ) |  |  | (88.0 | )%

Operating income decreased in 2001 primarily as a
result of gains on sales of radio stations, and for the reasons
discussed above.

|                 |  |                        |        |              |  |          |        |          |  |   |        |  |  |  |      |  
|---------------- |  | ---------------------- | ------ | ------------ |  | -------- | ------ | -------- |  | - | ------ |  |  |  | ---- | -
|                 |  | December 31,           |        | December 31, |  |          |        |         
|                 |  | 2001                   |        | 2000         |  | $ Change |        | % Change
|                 |  |                        |        |              |  |          |        |         
|                 |  |                        |        |             
|                 |  | (Amounts in Thousands) |        |             
|Interest expense |  | $                      | 49,008 |              |  | $        | 37,012 |          |  | $ | 11,996 |  |  |  | 32.4 | %

Interest expense increased in 2001 primarily
because of a higher outstanding debt balance during the year, as
a result of borrowings incurred to complete the acquisitions of
stations during late 2000 and early 2001. While our outstanding
debt balance was higher in 2001 compared to 2000, the resulting
interest expense was offset by the borrowing rate on our
floating rate debt declining during 2001 from 7.5% at
December 31, 2000 to 2.8% at December 31, 2001.

|                   |          |                        |        |              |   |          |         |          |  |   |         |         |   |  |        |        |   
|------------------ | -------- | ---------------------- | ------ | ------------ | - | -------- | ------- | -------- |  | - | ------- | ------- | - |  | ------ | ------ | --
|                   |          | December 31,           |        | December 31, |   |          |         |         
|                   |          | 2001                   |        | 2000         |   | $ Change |         | % Change
|                   |          |                        |        |              |   |          |         |         
|                   |          |                        |        |             
|                   |          | (Amounts in Thousands) |        |             
|Income taxes:      |          |                        |        |              |   |          |         |          |  |   |         |         |   |  |        |       
|                   | Current  |                        | $      | 10,180       |   |          | $       | 19,065   |  |   | $       | (8,885  | ) |  |        | (46.6  | )%
|                   | Deferred |                        |        | (11,487      | ) |          |         | 209,482  |  |   |         | 220,969 |   |  |        | (105.5 | )%
|                   |          |                        |        |              |   |          |         |          |  |   |         |         |   |  |        |       
|Total income taxes |          | $                      | (1,307 | )            |   | $        | 228,547 |          |  | $ | 229,854 |         |   |  | (100.6 | )%    
|                   |          |                        |        |              |   |          |         |          |  |   |         |         |   |  |        |       

During 2001, we recorded a $10.9 million
deferred tax benefit related to a revision to our effective
state income tax rate. Excluding this item, our effective income
tax rate for 2001 was approximately 48%. During 2000, our
effective income tax rate was approximately 43% and included
$204.0 million in income tax expense recorded on sale and
exchange transactions during 2000.

|           |  |                        |        |              |  |          |         |          |  |   |          |   |  |  |       |   
|---------- |  | ---------------------- | ------ | ------------ |  | -------- | ------- | -------- |  | - | -------- | - |  |  | ----- | --
|           |  | December 31,           |        | December 31, |  |          |         |         
|           |  | 2001                   |        | 2000         |  | $ Change |         | % Change
|           |  |                        |        |              |  |          |         |         
|           |  |                        |        |             
|           |  | (Amounts in Thousands) |        |             
|Net income |  | $                      | 20,691 |              |  | $        | 305,937 |          |  | $ | (285,246 | ) |  |  | (93.2 | )%

Net income decreased for 2001 primarily as a
result of a $27.9 million after-tax gain on the sale of KACE-FM
and KRTO-FM in Los Angeles, California and a $244.6 million
after-tax gain on the exchange of KFI-AM and KOST-FM in Los
Angeles, California, both recorded in 2000, a $10.9 million
deferred tax benefit related to a revision to our effective
state income tax rate recorded in 2001 and for the reasons
discussed above.

Liquidity and Capital Resources

Sources
and Uses of Liquidity

Our primary sources of liquidity are cash
provided by operations and through borrowings under our bank
credit facilities. Net cash from operations results primarily
from net income adjusted for non-cash items, including
depreciation and amortization, deferred income taxes, gains or
losses on sales of radio stations and changes in working capital
accounts. Primary uses of liquidity include debt service (as
discussed below), acquisitions, capital expenditures and
investment in signal upgrades. Acquisitions during 2002, 2001
and 2000 totaled $0.5 million, $50.2 million and $814.9 million,
respectively. Capital expenditures during 2002, 2001 and 2000
totaled $11.9 million, $17.0 million and $11.6 million,
respectively. Additionally, during 2002 and 2001, Cox Radio
invested $12.2 million and 1.9 million, respectively, in
signal upgrades at a number of its stations.

We have an effective universal shelf registration
statement under which Cox Radio may from time to time offer and
issue debentures, notes, bonds and other evidence of
indebtedness and forward contracts in

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##### Table of Contents



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 offer and issue preferred securities of the trusts. At
December 31, 2002 and December 31, 2001, $244.8
million was available under the universal shelf registration
statement.


In February 2001, we issued, under our universal
shelf registration statement, $250.0 million aggregate principal
amount of 6.625% Senior Notes due 2006. We received proceeds of
approximately $248.0 million and incurred offering expenses of
approximately $0.3 million for net proceeds of approximately
$247.7 million. We used the entire net proceeds to repay a
portion of the outstanding indebtedness under our credit
facilities.

In addition, daily cash management needs have
been funded through intercompany advances from Cox Enterprises.
Our borrowings from Cox Enterprises are due on demand, but
typically repaid within 30 days, and accrue interest at Cox
Enterprises current commercial paper borrowing rate plus
40 basis points. Cox Enterprises continues to perform day-to-day
cash management services for us. We had approximately $3.1
million and $1.1 million in amounts due from Cox Enterprises at
December 31, 2002 and 2001, respectively.

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
expenditures and debt service requirements. Additional cash
requirements, including funds for acquisitions, will be funded
by various sources, including the proceeds from bank financing,
intercompany advances from Cox Enterprises and, if or when
appropriate, other issuances of securities.

Debt
Service

On June 30, 2000, we entered into a $350
million, five-year senior unsecured revolving credit facility
and a $350 million, 364-day senior unsecured revolving credit
facility, and on June 28, 2002, we replaced our then
existing 364-day senior unsecured revolving credit facility with
a $150 million, 364-day senior unsecured revolving credit
facility. The interest rate for both the 364-day facility and
the five-year facility is, at our option: the greater of the
prime rate or the federal funds borrowing rate plus 0.5%; the
London Interbank Offered Rate plus a spread based on the credit
ratings of our senior long-term debt; or the bid rate for the
purchase of certificates of deposit of equal principal amount
and maturity plus a spread based on the credit ratings of our
senior long-term debt. Under the new 364-day facility, we may
also choose an interest rate based on the federal funds rate
plus a spread based on the credit ratings of our senior
long-term debt and certain financial covenants. The 364-day
facility also provides for a letter of credit facility. The
facilities include commitment fees on the unused portion of the
total amount available of 0.09% to 0.25% based on the credit
ratings of our senior long-term debt. Each facility contains,
among other provisions, specified leverage and interest coverage
requirements, the terms of which are defined within each credit
facility. At December 31, 2002, we were in compliance with
these covenants. Our credit facilities contain events of default
based on (i) the failure to pay when due other debt, the
outstanding amount of which exceeds $25 million, after the
expiration of applicable grace periods and (ii) the
acceleration of other debt, the outstanding amount of which
exceeds $25 million. At December 31, 2002, we had
approximately $165 million of outstanding indebtedness under the
five-year facility with $185 million available, and no
amounts outstanding under the 364-day facility with $150 million
available. The interest rate applied to amounts due under the
bank credit facilities was 2.1% at December 31, 2002. See
Note 10 to our consolidated financial statements included
in this report for a discussion of our interest rate swap
agreements.

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##### Table of Contents



Cox Radio has $450 million in outstanding debt
securities, as described below (dollar amounts in thousands):

|                 |                |               |  |          |        |  |  |  |               | 
|---------------- | -------------- | ------------- |  | -------- | ------ |  |  |  | ------------- | 
|Principal Amount |                | Interest Rate |  | Maturity
|                 |                |               |  |         
|                 | $100,000(1)(2) |               |  |          | 6.25%  |  |  |  | May 2003      | 
|                 | $100,000(1)    |               |  |          | 6.375% |  |  |  | May 2005      | 
|                 | $250,000(3)    |               |  |          | 6.625% |  |  |  | February 2006 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | At December 31, 2002 and December 31,
    2001, the estimated aggregate fair values of the 6.25% notes and
    the 6.375% notes were approximately $207.9 million and $205.8
    million, respectively, based on quoted market prices.                                                                                                                                                                                                                                                                                         
|(2) | As of December 31, 2002, $100 million
    principal amount of notes due in 2003 is excluded from current
    liabilities because we intend to refinance this obligation on a
    long-term basis and currently have the ability to do so under
    our existing five-year facility. This credit facility had unused
    capacity of $185 million as of December 31, 2002. We may
    also refinance this obligation through the issuance of debt or
    equity securities depending on market conditions and other
    factors.
|(3) | At December 31, 2002 and December 31,
    2001, the estimated fair value of these notes was approximately
    $269.3 million and $256.8 million, respectively, based on quoted
    market prices.                                                                                                                                                                                                                                                                                                                              

On June 20, 2002, Moodys Investors
Service, Inc. lowered its rating on our senior, unsecured,
long-term debt securities from Baa2 to Baa3 with a negative
outlook. Following this action, our Moodys rating remains
investment grade. This action did not have a material adverse
effect on our financial position, results of operations or cash
flows.

Off-Balance Sheet Arrangements

Other than lease commitments, legal contingencies
incurred in the normal course of business, and contracts for
sports programming and on-air personalities (all of which are
disclosed in Note 9 to our consolidated financial
statements included in this report) and the guarantee discussed
below, we do not have any off-balance sheet arrangements. 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.

Cox Radio is the guarantor of certain senior debt
of Honolulu Broadcasting, Inc., which totaled $7.6 million at
December 31, 2002. Honolulu Broadcasting owns WARV-FM,
serving Richmond, Virginia, and KGMZ-FM, serving Honolulu,
Hawaii. This debt consists of a one-year renewable term loan
secured by the assets of WARV-FM and KGMZ-FM, which represents
Honolulu Broadcastings financing of the purchase of these
stations. Cox Radio provides sales and marketing services under
JSAs to these stations pursuant to which Cox Radio sells
advertising on the stations, which we record as revenues,
provides marketing services for the stations, and pays a JSA fee
to Honolulu Broadcasting in an amount sufficient to service this
debt. During February 2003, Honolulu Broadcasting sold WARV-FM,
terminating the related JSA, and repaid $1.0 million of this
indebtedness, which reduced the amount of Cox Radios
guarantee to $6.6 million. In addition, Cox Radio believes the
sale of KGMZ-FM would result in sufficient proceeds to repay the
outstanding debt. As a result, Cox Radio considers the degree of
risk related to this guarantee insignificant. See Note 9 to our
consolidated financial statements included in this report.

31



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##### Table of Contents



Summary Disclosures about Contractual
Obligations

Cox Radio also has various commitments under the
following types of contracts: operating leases; long-term debt;
sports programming and on-air personalities; and other operating
contracts. The aggregate minimum annual commitments associated
with these contracts as of December 31, 2002 were as
follows:

|                          |                      |                        |         |        |  |      |         |        |  |      |        |        |  |            |         |       |  |   |         |       |  |   |       |       |  |   |        |   | 
|------------------------- | -------------------- | ---------------------- | ------- | ------ |  | ---- | ------- | ------ |  | ---- | ------ | ------ |  | ---------- | ------- | ----- |  | - | ------- | ----- |  | - | ----- | ----- |  | - | ------ | - | 
|                          |                      |                       
|                          |                      | Payments Due by Period
|                          |                      |                       
|                          |                      | Total                  |         | 2003   |  | 2004 |         | 2005   |  | 2006 |        | 2007   |  | After 2007
|                          |                      |                        |         |        |  |      |         |        |  |      |        |        |  |           
|                          |                      |                       
|                          |                      | (Amounts in Thousands)
|Operating leases          |                      | $                      | 35,638  |        |  | $    | 5,129   |        |  | $    | 4,648  |        |  | $          | 4,538   |       |  | $ | 4,207   |       |  | $ | 3,375 |       |  | $ | 13,741 |  
|Long-term debt            |                      |                        | 615,000 |        |  |      | 100,000 |        |  |      |       |        |  |            | 265,000 |       |  |   | 250,000 |       |  |   |      |       |  |   |       |  
|Sports programming and    |                      |                        |         |        |  |      |         |        |  |      |        |        |  |            |         |       |  |   |         |       |  |   |       |       |  |   |        |  
|                          | on-air personalities |                        |         | 52,481 |  |      |         | 23,768 |  |      |        | 19,344 |  |            |         | 5,098 |  |   |         | 3,171 |  |   |       | 1,100 |  |   |        |  | 
|Other operating contracts |                      |                        | 2,084   |        |  |      | 1,294   |        |  |      | 158    |        |  |            | 158     |       |  |   | 158     |       |  |   | 158   |       |  |   | 158    |  
|                          |                      |                        |         |        |  |      |         |        |  |      |        |        |  |            |         |       |  |   |         |       |  |   |       |       |  |   |        |  
|Total                     |                      | $                      | 705,203 |        |  | $    | 130,191 |        |  | $    | 24,150 |        |  | $          | 274,794 |       |  | $ | 257,536 |       |  | $ | 4,633 |       |  | $ | 13,899 |  
|                          |                      |                        |         |        |  |      |         |        |  |      |        |        |  |            |         |       |  |   |         |       |  |   |       |       |  |   |        |  

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

Cox Radio receives certain services from, and has
entered into certain transactions with, Cox Enterprises. Costs
of the services that are allocated to Cox Radio are based on
actual direct costs incurred or on Cox Enterprises
estimate of expenses relative to the services provided to other
subsidiaries of Cox Enterprises. Cox Radio believes that these
allocations were made on a reasonable basis, and that receiving
these 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.

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 $3.8 million and
$4.8 million existed at December 31, 2002 and 2001,
respectively, as a result of Cox Radios checks
outstanding. The amounts due (to) from Cox Enterprises
represent the net balance of the intercompany transactions and
are generally due on demand. Outstanding amounts due from Cox
Enterprises bear interest equal to Cox Enterprises current
commercial paper borrowing rate and outstanding amounts due to
Cox Enterprises bear interest at 40 basis points above Cox
Enterprises current commercial paper borrowing rate.
During 2002, Cox Enterprises weighted average commercial
paper rates ranged from 1.6% to 2.3%. The amounts due from Cox
Enterprises totaled $3.1 million and $1.1 million as of
December 31, 2002 and 2001, respectively.

Cox Radio receives certain management services
from Cox Enterprises and Cox Enterprises wholly-owned
subsidiary, Cox Broadcasting. These services include 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 Operations. Cox Radio was allocated expenses for
the years ended December 31, 2002, 2001 and 2000 of
approximately $3.3 million, $3.1 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

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made by Cox Enterprises on behalf of Cox
Enterprises and its affiliates. 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s Board of Directors, and his sister, who
each own 25%. This insurance company is an insurer and reinsurer
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 $0.3 million
for the years ended December 31, 2002, 2001 and 2000.


Cox Radios employees participate in certain
Cox Enterprises employee benefit plans, and Cox Radio made
payments to Cox Enterprises in 2002 for the costs incurred by
reason of such participation, including self-insured employee
medical insurance costs of approximately $6.8 million, retiree
medical payments of approximately $0.1 million and executive
pension plan payments of approximately $0.7 million. Costs
incurred for these items in 2001 and 2000 were self-insured
employee medical insurance costs of approximately $5.5 million
and $4.0 million, respectively, retiree medical payments of
approximately $0.1 million and $0.1 million, respectively, and
executive pension plan payments of approximately $0.9 million
and $0.7 million, respectively.

Cox Radio pays rent and certain other occupancy
costs for space in Cox Enterprises corporate headquarters
building. Rent and occupancy expense is allocated based on
occupied space. During 2002, Cox Enterprises, Cox Radio and
certain other affiliates of Cox Enterprises moved to a new
headquarters building. Related rent and occupancy expense was
approximately $0.3 million for the year ended December 31,
2002 compared to $0.1 million for each of the years ended
December 31, 2001 and 2000. The new 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 Enterprise, with an indirect 36% interest held in
the aggregate by the children of James C. Kennedy, Chairman of
Coxs Board of Directors and an indirect less than 3%
interest held in the aggregate by Mr. Kennedy, his mother
and his sister.

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

|                                                             |                                                          |                        |         |          |  
|------------------------------------------------------------ | -------------------------------------------------------- | ---------------------- | ------- | -------- | -
|                                                             |                                                          | (Amounts in Thousands)
|                                                             |                                                          |                       
|Intercompany due to Cox Enterprises,
    December 31, 1999   |                                                          | $                      | (17,138 | )       
|                                                             | Cash transferred to Cox Enterprises                      |                        |         | 284,308  |  
|                                                             | Acquisitions                                             |                        |         | (814,865 | )
|                                                             | Borrowings on revolver                                   |                        |         | 334,686  |  
|                                                             | Net proceeds from issuance of Class A common
    stock   |                        |         | 344,199  |  
|                                                             | Net operating expense allocations and
    reimbursements |                        |         | (113,922 | )
|                                                             |                                                          |                        |         |         
|Intercompany due from Cox Enterprises,
    December 31, 2000 |                                                          |                        | 17,268  |         
|                                                             |                                                          |                        |         |         
|                                                             | Cash transferred to Cox Enterprises                      |                        |         | 305,523  |  
|                                                             | Acquisitions                                             |                        |         | (50,216  | )
|                                                             | Payments on revolver                                     |                        |         | (300,000 | )

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|                                                             |                                                          |                        |       |          |  
|------------------------------------------------------------ | -------------------------------------------------------- | ---------------------- | ----- | -------- | -
|                                                             |                                                          | (Amounts in Thousands)
|                                                             |                                                          |                       
|                                                             | Net proceeds from issuance of senior notes               |                        |       | 249,667  |  
|                                                             | Net operating expense allocations and
    reimbursements |                        |       | (221,158 | )
|                                                             |                                                          |                        |       |         
|Intercompany due from Cox Enterprises,
    December 31, 2001 |                                                          |                        | 1,084 |         
|                                                             |                                                          |                        |       |         
|                                                             | Cash transferred to Cox Enterprises                      |                        |       | 318,777  |  
|                                                             | Acquisitions                                             |                        |       | (484     | )
|                                                             | Payments on revolver                                     |                        |       | (89,848  | )
|                                                             | Net operating expense allocations and
    reimbursements |                        |       | (226,470 | )
|                                                             |                                                          |                        |       |         
|Intercompany due from Cox Enterprises,
    December 31, 2002 |                                                          | $                      | 3,059 |         
|                                                             |                                                          |                        |       |         

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

Cox Radio has entered into lease agreements with
Cox Broadcasting with respect to studio and tower site
properties in Atlanta and Dayton that are used for radio
operations in those markets. The annual rental cost in the
aggregate was approximately $0.6 million for each of the years
ended December 31, 2002, 2001 and 2000.

In July 2000, Cox Radio entered into a
cross-promotion agreement with Cox Interactive Media (CIM), a
wholly owned subsidiary of Cox Enterprises. Cox Radio agreed to
provide radio and Internet advertising to CIM over a three-year
period in common markets, and CIM agreed to provide Internet
advertising on its city web sites in those markets. In 2002, CIM
ceased operating web sites in the markets covered by the cross
promotion agreement, and consequently the parties mutually
agreed to cease cross promotion. Cox Radio recognized both
income and expense related to the agreement of approximately
$1.0 million, $1.6 million and $0.8 million in 2002, 2001 and
2000, respectively.

New Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 142,
Goodwill and Other Intangible Assets, which requires
that goodwill and certain intangible assets not be amortized.
Instead, these assets are to be reviewed annually for impairment
and written down in the periods in which the recorded value
exceeds fair value. The provisions of SFAS No. 142 also
required the completion of a transitional impairment test within
six months of adoption, with any impairments identified treated
as a cumulative effect of a change in accounting principle. We
adopted SFAS No. 142 on January 1, 2002. In accordance
with SFAS No. 142, we discontinued the amortization of our
FCC licenses and goodwill effective January 1, 2002. During
the quarter ended March 31, 2002, we recognized an
after-tax impairment charge of $13.9 million for FCC licenses in
certain markets based on independent appraisals as a result of
adopting the provisions of SFAS No. 142.

In August 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, which supersedes Statement
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of. SFAS
No. 144 removes goodwill from its scope and retains the
requirements of SFAS No. 121 regarding the recognition of
impairment losses on long-lived assets held for use. SFAS
No. 144 also supersedes the accounting and reporting
provisions of APB Opinion No. 30, Reporting the
Results of Operations-Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions, for the
disposal of a segment of a business. However, it retains the
requirement in APB Opinion No. 30 to report separately
discontinued operations and extends that reporting to a
component of an entity that either has been disposed of (by
sale, abandonment, or in a distribution to owners) or is
classified as held for sale. SFAS No. 144 is effective for
fiscal years beginning after December 15, 2001 and interim
periods within those fiscal years. We adopted SFAS No. 144
on January 1, 2002, and it did not have a material impact
on our financial position, cash flows or results of operations.

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In July 2002, the FASB issued SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal
Activities, which supercedes Emerging Issues Task Force
(EITF) Issue No. 94-3, Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an
Activity. SFAS No. 146 requires that liabilities
associated with exit or disposal activities be recognized when
they are incurred. Under EITF Issue No. 94-3, a liability
for exit costs is recognized at the date of a commitment to an
exit plan. SFAS No. 146 also requires that the liability be
measured and recorded at fair value. The provisions of SFAS
No. 146 are effective for restructuring activities
initiated after December 31, 2002.

In November 2002, the FASB issued FIN
No. 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others. This interpretation elaborates on
the disclosures to be made by a guarantor in its interim and
annual financial statements about obligations under certain
guarantees that it has issued. It also clarifies that a
guarantor is required to recognize, at the inception of a
guarantee, a liability for the fair value of the obligation
undertaken in issuing the guarantee. The initial recognition and
measurement requirement of FIN No. 45 is effective
prospectively for guarantees issued or modified after
December 31, 2002. The disclosure requirements of FIN
No. 45 are effective for interim and annual periods ending
after December 15, 2002. See Note 9 to the consolidated
financial statements included in this report. As discussed above
under Off-Balance Sheet Arrangements, we are the
guarantor of certain acquisition debt of Honolulu Broadcasting
totaling $7.6 million at December 31, 2002. We are
currently evaluating the impact of the application of FIN
No. 45, but we do not believe that the recognition
provisions of FIN No. 45 will have a material effect on our
consolidated financial statements.

In December 2002, the FASB issued SFAS
No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure. This
statement amends SFAS No. 123, Accounting for
Stock-Based Compensation, to provide alternative methods
of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In
addition, SFAS No. 148 amends the disclosure requirements
of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect
of the method used on reported results. The annual disclosure
provisions of SFAS No. 148 are effective for our 2002
annual financial statements, and the interim disclosure
provisions are effective for our first quarter of 2003. We have
adopted the disclosure provisions of SFAS No. 148 as
reflected in Note 2 to our consolidated financial statements
included in this report.

In October 2002, the EITF reached a
consensus on Issue No. 02-17, Recognition of Customer
Relationship Intangible Assets Acquired in a Business
Combination. This consensus requires that certain customer
relationships be considered in performing goodwill impairment
testing under SFAS No. 142. The consensus is effective for
business combinations consummated and goodwill impairment tests
performed after October 25, 2002. Cox Radio will consider
this consensus as necessary in its January 1, 2003
impairment testing under SFAS No. 142.

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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. Our primary financial
market risk exposure pertains to changes in interest rates.

We have examined exposures to these risks and
concluded that none of the exposures in these areas are material
to cash flows or earnings. We have engaged in several strategies
to manage these market risks. Our indebtedness under our various
financing arrangements creates interest rate risk. In connection
with each debt issuance and as a result of continual monitoring
of interest rates, we have entered into interest rate swap
agreements for purposes of managing borrowing costs.

Pursuant to the interest rate swap agreements; we
have exchanged our floating rate interest obligations on an
aggregate of $50 million in notional principal amount of debt
for fixed interest rates. At December 31, 2002, these
agreements have an average annual fixed rate of 6.3% and an
average remaining maturity of 3.25 years. Concurrently with
the adoption of SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, in January
2001, we formally designated these agreements as cash flow
hedges, as discussed in Note 10 to our consolidated
financial statements included in this report. We are exposed to
a credit loss in the event of nonperformance by the
counterparties to the interest rate swap agreements. However, we
do not anticipate nonperformance by such counterparties, and no
material loss would be expected in the event of the
counterparties nonperformance. The estimated fair value of
these swap agreements, based on current market rates,
approximated a net payable of $5.8 million and $3.0 million at
December 31, 2002 and December 31, 2001, respectively.
The fair value of the swap agreements at December 31, 2002
is included in other long-term liabilities according to the
respective maturity dates of the swaps.

The determination of the estimated fair value of
our fixed-rate debt is subject to the effects of interest rate
risk. The estimated fair value of the fixed-rate debt
instruments at December 31, 2002 was $477.1 million,
compared to a carrying amount of $449.6 million. The estimated
fair value of our fixed-rate debt instruments at
December 31, 2001 was $462.6 million, compared to a
carrying amount of $449.5 million. The effect of a hypothetical
one percentage point decrease in interest rates would be to
increase the estimated fair value of the fixed-rate debt
instruments from $477.1 million to $487.6 million at
December 31, 2002 and from $462.6 million to $476.5 million
at December 31, 2001.

The estimated fair values of debt instruments are
based on discounted cash flow analyses using our borrowing rate
for similar types of borrowing arrangements and dealer
quotations. Our 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 the foregoing
variable rate debt instruments.

With respect to financial instruments, we have
estimated the fair values of such instruments 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 estimates of fair
value. Accordingly, the estimates presented above are not
necessarily indicative of the amounts that we would realize or
pay in a current market transaction.

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ITEM 8.     Financial
Statements and Supplementary Data

INDEPENDENT AUDITORS REPORT

To the Board of Directors and Shareholders of

Cox Radio, Inc.


We have audited the accompanying consolidated
balance sheets of Cox Radio, Inc. as of December 31, 2002
and 2001, and the related consolidated statements of income,
shareholders equity and cash flows for each of the three
years in the period ended December 31, 2002. Our audits
also included the financial statement schedule of Cox Radio
listed in the Index at Item 15. These financial statements
and financial statement schedule are the responsibility of Cox
Radios management. Our responsibility is to express an
opinion on the financial statements and financial statement
schedule based on our audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States of
America. 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 Cox Radio as of December 31, 2002 and
2001, and the results of its operations and its cash flows for
each of the three years in the period ended December 31,
2002 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.

As discussed in Note 7 to the consolidated
financial statements, effective January 1, 2002, Cox Radio
changed its method of accounting for goodwill and other
intangible assets to conform with Statement of Financial
Accounting Standards No. 142. As discussed in Note 10 to
the consolidated financial statements, effective January 1,
2001, Cox Radio changed its method of accounting for derivative
instruments and hedging activities to conform with Statement of
Financial Accounting Standards No. 133, as amended.

DELOITTE & TOUCHE LLP 
 Atlanta, Georgia 
 March 31, 2003

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COX RADIO, INC.

CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                                                                       |                                            |                        |           |           |  |   |           |           | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---------------------- | --------- | --------- |  | - | --------- | --------- | 
|                                                                                                                                                                                                                       |                                            |                       
|                                                                                                                                                                                                                       |                                            | December 31,          
|                                                                                                                                                                                                                       |                                            |                       
|                                                                                                                                                                                                                       |                                            | 2002                   |           | 2001     
|                                                                                                                                                                                                                       |                                            |                        |           |          
|                                                                                                                                                                                                                       |                                            |                       
|                                                                                                                                                                                                                       |                                            | (Amounts in Thousands,
|                                                                                                                                                                                                                       |                                            | Except Share Data)    
|ASSETS                                                                                                                                                                                                                
|Current assets:                                                                                                                                                                                                        |                                            |                        |           |           |  |   |           |          
|Cash and cash equivalents                                                                                                                                                                                              |                                            | $                      | 4,681     |           |  | $ | 7,961     |          
|Accounts and notes receivable, less allowance for
    doubtful accounts of $4,791 and $4,536, respectively                                                                                                             |                                            |                        | 86,876    |           |  |   | 82,878    |          
|Prepaid expenses and other current assets                                                                                                                                                                              |                                            |                        | 7,567     |           |  |   | 9,245     |          
|Amounts due from Cox Enterprises                                                                                                                                                                                       |                                            |                        | 3,059     |           |  |   | 1,084     |          
|                                                                                                                                                                                                                       |                                            |                        |           |           |  |   |           |          
|                                                                                                                                                                                                                       | Total current assets                       |                        |           | 102,183   |  |   |           | 101,168   | 
|Property and equipment, net                                                                                                                                                                                            |                                            |                        | 79,304    |           |  |   | 80,106    |          
|FCC licenses and other intangible assets, net                                                                                                                                                                          |                                            |                        | 2,023,525 |           |  |   | 2,049,157 |          
|Goodwill                                                                                                                                                                                                               |                                            |                        | 46,514    |           |  |   | 46,514    |          
|Other assets                                                                                                                                                                                                           |                                            |                        | 20,186    |           |  |   | 9,742     |          
|                                                                                                                                                                                                                       |                                            |                        |           |           |  |   |           |          
|                                                                                                                                                                                                                       | Total assets                               |                        | $         | 2,271,712 |  |   | $         | 2,286,687 | 
|                                                                                                                                                                                                                       |                                            |                        |           |           |  |   |           |          
|LIABILITIES AND SHAREHOLDERS
    EQUITY                                                                                                                                                                              
|Current liabilities:                                                                                                                                                                                                   |                                            |                        |           |           |  |   |           |          
|Accounts payable and accrued expenses                                                                                                                                                                                  |                                            | $                      | 27,821    |           |  | $ | 23,124    |          
|Accrued salaries and wages                                                                                                                                                                                             |                                            |                        | 6,449     |           |  |   | 5,921     |          
|Accrued interest                                                                                                                                                                                                       |                                            |                        | 7,966     |           |  |   | 8,092     |          
|Income taxes payable                                                                                                                                                                                                   |                                            |                        | 12,109    |           |  |   | 8,012     |          
|Other current liabilities                                                                                                                                                                                              |                                            |                        | 2,083     |           |  |   | 3,876     |          
|                                                                                                                                                                                                                       |                                            |                        |           |           |  |   |           |          
|                                                                                                                                                                                                                       | Total current liabilities                  |                        |           | 56,428    |  |   |           | 49,025    | 
|Notes payable                                                                                                                                                                                                          |                                            |                        | 614,602   |           |  |   | 704,450   |          
|Deferred income taxes                                                                                                                                                                                                  |                                            |                        | 482,286   |           |  |   | 468,022   |          
|Other long term liabilities                                                                                                                                                                                            |                                            |                        | 6,907     |           |  |   | 3,937     |          
|                                                                                                                                                                                                                       |                                            |                        |           |           |  |   |           |          
|                                                                                                                                                                                                                       | Total liabilities                          |                        |           | 1,160,223 |  |   |           | 1,225,434 | 
|                                                                                                                                                                                                                       |                                            |                        |           |           |  |   |           |          
|Commitments (Note 9) and contingencies (Note 15)                                                                                                                                                                       |                                            |                        |           |           |  |   |           |          
|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; 41,571,789 and 41,270,189 shares
    issued and 41,450,595 and 41,150,148 shares outstanding at
    December 31, 2002 and 2001, respectively |                                            |                        | 13,719    |           |  |   | 13,619    |          
|Class B common stock, $0.33 par value;
    135,000,000 shares authorized; 58,733,016 shares issued and
    outstanding at December 31, 2002 and 2001                                                                   |                                            |                        | 19,382    |           |  |   | 19,382    |          
|Additional paid-in capital                                                                                                                                                                                             |                                            |                        | 624,049   |           |  |   | 618,803   |          
|Accumulated other comprehensive loss, net of tax                                                                                                                                                                       |                                            |                        | (3,082    | )         |  |   | (2,059    | )        
|Retained earnings                                                                                                                                                                                                      |                                            |                        | 459,104   |           |  |   | 413,163   |          
|                                                                                                                                                                                                                       |                                            |                        |           |           |  |   |           |          
|                                                                                                                                                                                                                       |                                            |                        | 1,113,172 |           |  |   | 1,062,908 |          
|Less: Class A common stock held in treasury
    (121,194 and 120,041 shares at cost, respectively)                                                                                                                     |                                            |                        | (1,683    | )         |  |   | (1,655    | )        
|                                                                                                                                                                                                                       |                                            |                        |           |           |  |   |           |          
|                                                                                                                                                                                                                       | Total shareholders equity                 |                        |           | 1,111,489 |  |   |           | 1,061,253 | 
|                                                                                                                                                                                                                       |                                            |                        |           |           |  |   |           |          
|                                                                                                                                                                                                                       | Total liabilities and shareholders equity |                        | $         | 2,271,712 |  |   | $         | 2,286,687 | 
|                                                                                                                                                                                                                       |                                            |                        |           |           |  |   |           |          

See notes to consolidated financial statements.

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COX RADIO, INC.

CONSOLIDATED STATEMENTS OF INCOME

|                                                                          |                                    |                         |         |         |  |      |         |         |   |   |          |         | 
|------------------------------------------------------------------------- | ---------------------------------- | ----------------------- | ------- | ------- |  | ---- | ------- | ------- | - | - | -------- | ------- | 
|                                                                          |                                    |                        
|                                                                          |                                    | Year Ended December 31,
|                                                                          |                                    |                        
|                                                                          |                                    | 2002                    |         | 2001    |  | 2000
|                                                                          |                                    |                         |         |         |  |     
|                                                                          |                                    |                        
|                                                                          |                                    | (Amounts in Thousands, 
|                                                                          |                                    | Except Per Share Data) 
|Net revenues:                                                             |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Local                                                                     |                                    | $                       | 308,872 |         |  | $    | 292,507 |         |   | $ | 267,563  |        
|National                                                                  |                                    |                         | 89,935  |         |  |      | 81,275  |         |   |   | 84,499   |        
|Other                                                                     |                                    |                         | 21,785  |         |  |      | 21,521  |         |   |   | 17,342   |        
|                                                                          |                                    |                         |         |         |  |      |         |         |   |   |          |        
|                                                                          | Total net revenues                 |                         |         | 420,592 |  |      |         | 395,303 |   |   |          | 369,404 | 
|Operating expenses:                                                       |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Cost of services (exclusive of depreciation shown
    separately below)   |                                    |                         | 93,152  |         |  |      | 92,412  |         |   |   | 80,715   |        
|Selling, general and administrative                                       |                                    |                         | 161,093 |         |  |      | 153,945 |         |   |   | 140,879  |        
|Corporate general and administrative                                      |                                    |                         | 15,489  |         |  |      | 13,280  |         |   |   | 13,347   |        
|Depreciation                                                              |                                    |                         | 12,096  |         |  |      | 11,392  |         |   |   | 7,800    |        
|Amortization                                                              |                                    |                         | 118     |         |  |      | 58,243  |         |   |   | 35,192   |        
|Loss on sales of assets                                                   |                                    |                         | 617     |         |  |      | 337     |         |   |   | 699      |        
|Gain on sales of radio stations                                           |                                    |                         | (304    | )       |  |      | (2,434  | )       |   |   | (475,201 | )      
|                                                                          |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Operating income                                                          |                                    |                         | 138,331 |         |  |      | 68,128  |         |   |   | 565,973  |        
|Other income (expense):                                                   |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Interest income                                                           |                                    |                         | 32      |         |  |      | 1,527   |         |   |   | 4,496    |        
|Interest expense                                                          |                                    |                         | (39,682 | )       |  |      | (49,008 | )       |   |   | (37,012  | )      
|Non-cash mark-to-market unrealized gain                                   |                                    |                         |        |         |  |      |        |         |   |   | 1,606    |        
|Other  net                                                               |                                    |                         | (508    | )       |  |      | (476    | )       |   |   | (579     | )      
|                                                                          |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Income before income taxes and cumulative
    effect of accounting change |                                    |                         | 98,173  |         |  |      | 20,171  |         |   |   | 534,484  |        
|                                                                          |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Current income tax expense                                                |                                    |                         | 14,722  |         |  |      | 10,180  |         |   |   | 19,065   |        
|Deferred income tax expense (benefit)                                     |                                    |                         | 23,576  |         |  |      | (11,487 | )       |   |   | 209,482  |        
|                                                                          |                                    |                         |         |         |  |      |         |         |   |   |          |        
|                                                                          | Total income tax expense (benefit) |                         |         | 38,298  |  |      |         | (1,307  | ) |   |          | 228,547 | 
|                                                                          |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Income before cumulative effect of accounting
    change                  |                                    |                         | 59,875  |         |  |      | 21,478  |         |   |   | 305,937  |        
|Cumulative effect of accounting changes, net of
    tax                   |                                    |                         | (13,934 | )       |  |      | (787    | )       |   |   |         |        
|                                                                          |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Net income                                                                |                                    | $                       | 45,941  |         |  | $    | 20,691  |         |   | $ | 305,937  |        
|                                                                          |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Net income per share 
    basic                                          |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Income before cumulative effect of accounting
    change                  |                                    | $                       | 0.60    |         |  | $    | 0.22    |         |   | $ | 3.28     |        
|Cumulative effect of accounting changes                                   |                                    |                         | (0.14   | )       |  |      | (0.01   | )       |   |   |         |        
|                                                                          |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Net income per common share                                               |                                    | $                       | 0.46    |         |  | $    | 0.21    |         |   | $ | 3.28     |        
|                                                                          |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Net income per share 
    diluted                                        |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Income before cumulative effect of accounting
    change                  |                                    | $                       | 0.60    |         |  | $    | 0.22    |         |   | $ | 3.26     |        
|Cumulative effect of accounting changes                                   |                                    |                         | (0.14   | )       |  |      | (0.01   | )       |   |   |         |        
|                                                                          |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Net income per common share                                               |                                    | $                       | 0.46    |         |  | $    | 0.21    |         |   | $ | 3.26     |        
|                                                                          |                                    |                         |         |         |  |      |         |         |   |   |          |        
|Weighted average common shares
    outstanding  basic                    |                                    |                         | 100,098 |         |  |      | 99,720  |         |   |   | 93,286   |        
|Weighted average common shares
    outstanding  diluted                  |                                    |                         | 100,532 |         |  |      | 100,188 |         |   |   | 93,936   |        

See notes to consolidated financial statements.

39



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##### Table of Contents



COX RADIO, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS
EQUITY

|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |      |  
|----------------------------------------------------------------------------------------------------- | ------------ | ---------------------- | ------ | ------------ |  | ---------- | ------ | ------------- |  | -------- | ------ | -------------- |  | -------- | ------ | ------ |  | ------ | ------- | ----- |  | - | ------ | ---- | - | - | ------- | - |  |  | --- | - |  | - | ------ | - |  | - | --------- | ---- | -
|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |       
|                                                                                                      |              | Class A                |        | Class B      |  |            |        | Accumulated   |  |          |        |                |  |         
|                                                                                                      |              | Common Stock           |        | Common Stock |  | Additional |        | Other         |  |          |        | Treasury Stock |  |         
|                                                                                                      |              |                        |        |              |  | Paid-in    |        | Comprehensive |  | Retained |        |                |  |         
|                                                                                                      |              | Shares                 |        | Amount       |  | Shares     |        | Amount        |  | Capital  |        | Loss           |  | Earnings |        | Shares |  | Amount |         | Total
|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |      
|                                                                                                      |              |                       
|                                                                                                      |              | (Amounts in Thousands)
|Balance at December 31, 1999                                                                          |              |                        | 28,016 |              |  | $          | 9,245  |               |  |          | 58,733 |                |  | $        | 19,382 |        |  | $      | 265,155 |       |  | $ |       |      |   | $ | 86,535  |   |  |  | 120 |   |  | $ | (1,651 | ) |  | $ | 378,666   |     
|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     
|Net income and comprehensive income                                                                   |              |                        |       |              |  |            |       |               |  |          |       |                |  |          |       |        |  |        |        |       |  |   |       |      |   |   | 305,937 |   |  |  |    |   |  |   |       |   |  |   | 305,937   |     
|Issuance of Class A common stock pursuant to
    equity offering                                      |              |                        | 12,392 |              |  |            | 4,089  |               |  |          |       |                |  |          |       |        |  |        | 340,110 |       |  |   |       |      |   |   |        |   |  |  |    |   |  |   |       |   |  |   | 344,199   |     
|Issuance of Class A common stock related to
    incentive plans including tax benefit of $1.6 million |              |                        | 286    |              |  |            | 95     |               |  |          |       |                |  |          |       |        |  |        | 4,861   |       |  |   |       |      |   |   |        |   |  |  |    |   |  |   |       |   |  |   | 4,956     |     
|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     
|Balance at December 31, 2000                                                                          |              |                        | 40,694 |              |  |            | 13,429 |               |  |          | 58,733 |                |  |          | 19,382 |        |  |        | 610,126 |       |  |   |       |      |   |   | 392,472 |   |  |  | 120 |   |  |   | (1,651 | ) |  |   | 1,033,758 |     
|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     
|Comprehensive income:                                                                                 |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     
|Net income                                                                                            |              |                        |       |              |  |            |       |               |  |          |       |                |  |          |       |        |  |        |        |       |  |   |       |      |   |   | 20,691  |   |  |  |    |   |  |   |       |   |  |   | 20,691    |     
|Cumulative effect of adopting                                                                         |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     
|                                                                                                      | SFAS No. 133 |                        |        |             |  |            |        |              |  |          |        |               |  |          |        |       |  |        |         |      |  |   |        | (707 | ) |   |         |  |  |  |     |  |  |   |        |  |  |   |           | (707 | )
|Unrealized loss on cash flow hedges                                                                   |              |                        |       |              |  |            |       |               |  |          |       |                |  |          |       |        |  |        |        |       |  |   | (1,525 | )    |   |   |        |   |  |  |    |   |  |   |       |   |  |   | (1,525    | )   
|Reclassification to earnings of transition
    adjustments                                            |              |                        |       |              |  |            |       |               |  |          |       |                |  |          |       |        |  |        |        |       |  |   | 173    |      |   |   |        |   |  |  |    |   |  |   |       |   |  |   | 173       |     
|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     
|Comprehensive income                                                                                  |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   | 18,632    |     
|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     
|Repurchase of Class A common stock                                                                    |              |                        |       |              |  |            |       |               |  |          |       |                |  |          |       |        |  |        |        |       |  |   |       |      |   |   |        |   |  |  |    |   |  |   | (4     | ) |  |   | (4        | )   
|Issuance of Class A common stock related to
    incentive plans including tax benefit of $2.6 million |              |                        | 576    |              |  |            | 190    |               |  |          |       |                |  |          |       |        |  |        | 8,677   |       |  |   |       |      |   |   |        |   |  |  |    |   |  |   |       |   |  |   | 8,867     |     
|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     
|Balance at December 31, 2001                                                                          |              |                        | 41,270 |              |  |            | 13,619 |               |  |          | 58,733 |                |  |          | 19,382 |        |  |        | 618,803 |       |  |   | (2,059 | )    |   |   | 413,163 |   |  |  | 120 |   |  |   | (1,655 | ) |  |   | 1,061,253 |     
|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     
|Comprehensive income:                                                                                 |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     
|Net income                                                                                            |              |                        |       |              |  |            |       |               |  |          |       |                |  |          |       |        |  |        |        |       |  |   |       |      |   |   | 45,941  |   |  |  |    |   |  |   |       |   |  |   | 45,941    |     
|Unrealized loss on cash flow hedges                                                                   |              |                        |       |              |  |            |       |               |  |          |       |                |  |          |       |        |  |        |        |       |  |   | (1,182 | )    |   |   |        |   |  |  |    |   |  |   |       |   |  |   | (1,182    | )   
|Reclassification to earnings of transition
    adjustments                                            |              |                        |       |              |  |            |       |               |  |          |       |                |  |          |       |        |  |        |        |       |  |   | 159    |      |   |   |        |   |  |  |    |   |  |   |       |   |  |   | 159       |     
|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     
|Comprehensive income                                                                                  |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   | 44,918    |     
|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     
|Repurchase of Class A common stock                                                                    |              |                        |       |              |  |            |       |               |  |          |       |                |  |          |       |        |  |        |        |       |  |   |       |      |   |   |        |   |  |  | 1   |   |  |   | (28    | ) |  |   | (28       | )   
|Issuance of Class A common stock related to
    incentive plans including tax benefit of $2.0 million |              |                        | 302    |              |  |            | 100    |               |  |          |       |                |  |          |       |        |  |        | 5,246   |       |  |   |       |      |   |   |        |   |  |  |    |   |  |   |       |   |  |   | 5,346     |     
|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     
|Balance at December 31, 2002                                                                          |              |                        | 41,572 |              |  | $          | 13,719 |               |  |          | 58,733 |                |  | $        | 19,382 |        |  | $      | 624,049 |       |  | $ | (3,082 | )    |   | $ | 459,104 |   |  |  | 121 |   |  | $ | (1,683 | ) |  | $ | 1,111,489 |     
|                                                                                                      |              |                        |        |              |  |            |        |               |  |          |        |                |  |          |        |        |  |        |         |       |  |   |        |      |   |   |         |   |  |  |     |   |  |   |        |   |  |   |           |     

See notes to consolidated financial statements.

40



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##### Table of Contents



COX RADIO, INC.

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                            |                                                                                          |                                                                      |                                                         |         |        |         |       |          |         |         |        |          |          |          |  
|----------------------------------------------------------- | ---------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | ------------------------------------------------------- | ------- | ------ | ------- | ----- | -------- | ------- | ------- | ------ | -------- | -------- | -------- | -
|                                                            |                                                                                          |                                                                     
|                                                            |                                                                                          | Year Ended December 31,                                             
|                                                            |                                                                                          |                                                                     
|                                                            |                                                                                          | 2002                                                                 |                                                         | 2001    |        | 2000   
|                                                            |                                                                                          |                                                                      |                                                         |         |        |        
|                                                            |                                                                                          |                                                                     
|                                                            |                                                                                          | (Amounts in Thousands)                                              
|Cash flows from operating
    activities:                   |                                                                                          |                                                                      |                                                         |         |        |         |       |          |         |         |        |         
|                                                            | Net income                                                                               |                                                                      | $                                                       | 45,941  |        |         | $     | 20,691   |         |         | $      | 305,937  |         
|                                                            | Items not requiring cash:                                                                |                                                                      |                                                         |         |        |         |       |          |         |         |        |          |         
|                                                            |                                                                                          | Depreciation                                                         |                                                         |         | 12,096 |         |       |          | 11,392  |         |        |          | 7,800    |         
|                                                            |                                                                                          | Amortization                                                         |                                                         |         | 118    |         |       |          | 58,243  |         |        |          | 35,192   |         
|                                                            |                                                                                          | Deferred income taxes                                                |                                                         |         | 23,576 |         |       |          | (11,487 | )       |        |          | 209,482  |         
|                                                            |                                                                                          | Tax benefit of stock options exercised                               |                                                         |         | 1,953  |         |       |          | 2,595   |         |        |          | 1,627    |         
|                                                            |                                                                                          | Non-cash mark-to-market unrealized gain                              |                                                         |         |       |         |       |          |        |         |        |          | (1,606   | )       
|                                                            |                                                                                          | Loss on sales of assets                                              |                                                         |         | 617    |         |       |          | 337     |         |        |          | 699      |         
|                                                            |                                                                                          | Gain on sales of radio stations                                      |                                                         |         | (304   | )       |       |          | (2,434  | )       |        |          | (475,201 | )       
|                                                            |                                                                                          | Cumulative effect of accounting change, net of tax                   |                                                         |         | 13,934 |         |       |          | 787     |         |        |          |         |         
|                                                            | Changes in assets and liabilities (net of effects
    of acquisitions and dispositions): |                                                                      |                                                         |         |        |         |       |          |         |         |        |          |         
|                                                            |                                                                                          | (Increase) decrease in accounts receivable                           |                                                         |         | (4,110 | )       |       |          | 10,395  |         |        |          | (18,508  | )       
|                                                            |                                                                                          | Decrease (increase) in prepaid expenses and
    other current assets |                                                         |         | 2,177  |         |       |          | (1,636  | )       |        |          | (2,489   | )       
|                                                            |                                                                                          | Increase (decrease) in accounts payable and
    accrued expenses     |                                                         |         | 5,930  |         |       |          | (4,842  | )       |        |          | 962      |         
|                                                            |                                                                                          | Increase in accrued salaries and wages                               |                                                         |         | 528    |         |       |          | 87      |         |        |          | 1,370    |         
|                                                            |                                                                                          | (Decrease) increase in accrued interest                              |                                                         |         | (126   | )       |       |          | 2,625   |         |        |          | 2,991    |         
|                                                            |                                                                                          | Increase (decrease) in income taxes payable                          |                                                         |         | 4,097  |         |       |          | 6,888   |         |        |          | (4,338   | )       
|                                                            |                                                                                          | Other, net                                                           |                                                         |         | (127   | )       |       |          | (208    | )       |        |          | 3,754    |         
|                                                            |                                                                                          |                                                                      |                                                         |         |        |         |       |          |         |         |        |         
|                                                            |                                                                                          |                                                                      | Net cash provided by operating activities               |         |        | 106,300 |       |          |         | 93,433  |        |          |          | 67,672   |  
|                                                            |                                                                                          |                                                                      |                                                         |         |        |         |       |          |         |         |        |         
|Cash flows from investing
    activities:                   |                                                                                          |                                                                      |                                                         |         |        |         |       |          |         |         |        |         
|                                                            | Capital expenditures                                                                     |                                                                      |                                                         | (11,891 | )      |         |       | (17,001  | )       |         |        | (11,607  | )       
|                                                            | Acquisitions and related expenses, net of cash
    acquired                              |                                                                      |                                                         | (484    | )      |         |       | (50,216  | )       |         |        | (814,865 | )       
|                                                            | Decrease of station investment notes receivable                                          |                                                                      |                                                         |        |        |         |       |         |         |         |        | 850      |         
|                                                            | Decrease (increase) in other long-term assets                                            |                                                                      |                                                         | 759     |        |         |       | 244      |         |         |        | (792     | )       
|                                                            | Investment in signal upgrades                                                            |                                                                      |                                                         | (12,154 | )      |         |       | (1,862   | )       |         |        |         |         
|                                                            | Proceeds from sales of assets                                                            |                                                                      |                                                         | 394     |        |         |       | 89       |         |         |        | 419      |         
|                                                            | Proceeds from sale of radio stations                                                     |                                                                      |                                                         | 3,457   |        |         |       | 6,129    |         |         |        | 107,618  |         
|                                                            |                                                                                          |                                                                      |                                                         |         |        |         |       |          |         |         |        |         
|                                                            |                                                                                          |                                                                      | Net cash used in investing activities                   |         |        | (19,919 | )     |          |         | (62,617 | )      |          |          | (718,377 | )
|                                                            |                                                                                          |                                                                      |                                                         |         |        |         |       |          |         |         |        |         
|Cash flows from financing
    activities:                   |                                                                                          |                                                                      |                                                         |         |        |         |       |          |         |         |        |         
|                                                            | Net (payments) borrowings of revolving
    credit facilities                             |                                                                      |                                                         | (89,848 | )      |         |       | (300,000 | )       |         |        | 334,686  |         
|                                                            | Proceeds from issuance of senior notes                                                   |                                                                      |                                                         |        |        |         |       | 249,667  |         |         |        |         |         
|                                                            | Proceeds from stock offering                                                             |                                                                      |                                                         |        |        |         |       |         |         |         |        | 344,199  |         
|                                                            | Proceeds from stock options exercised                                                    |                                                                      |                                                         | 3,393   |        |         |       | 6,272    |         |         |        | 3,329    |         
|                                                            | Repurchase of Class A common stock                                                       |                                                                      |                                                         | (28     | )      |         |       | (4       | )       |         |        |         |         
|                                                            | (Decrease) increase in book overdrafts                                                   |                                                                      |                                                         | (975    | )      |         |       | 4        |         |         |        | (3,719   | )       
|                                                            | Payment of debt issuance costs                                                           |                                                                      |                                                         | (223    | )      |         |       | (1,928   | )       |         |        | (1,138   | )       
|                                                            | (Increase) decrease in amounts due to/from Cox
    Enterprises, net                      |                                                                      |                                                         | (1,980  | )      |         |       | 16,184   |         |         |        | (34,406  | )       
|                                                            |                                                                                          |                                                                      |                                                         |         |        |         |       |          |         |         |        |         
|                                                            |                                                                                          |                                                                      | Net cash (used in) provided by financing
    activities |         |        | (89,661 | )     |          |         | (29,805 | )      |          |          | 642,951  |  
|                                                            |                                                                                          |                                                                      |                                                         |         |        |         |       |          |         |         |        |         
|Net (decrease) increase in cash and cash
    equivalents    |                                                                                          |                                                                      | (3,280                                                  | )       |        |         | 1,011 |          |         |         | (7,754 | )       
|Cash and cash equivalents at beginning of
    year          |                                                                                          |                                                                      | 7,961                                                   |         |        |         | 6,950 |          |         |         | 14,704 |         
|                                                            |                                                                                          |                                                                      |                                                         |         |        |         |       |          |         |         |        |         
|Cash and cash equivalents at end of
    year                |                                                                                          | $                                                                    | 4,681                                                   |         |        | $       | 7,961 |          |         | $       | 6,950  |         
|                                                            |                                                                                          |                                                                      |                                                         |         |        |         |       |          |         |         |        |         
|Supplemental schedule of non-cash investing
    activities: |                                                                                          |                                                                      |                                                         |         |        |         |       |          |         |         |        |         
|                                                            | Value of businesses exchanged                                                            |                                                                      | $                                                       |        |        |         | $     |         |         |         | $      | 470,000  |         

See notes to consolidated financial statements.

41



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##### Table of Contents



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 indirectly owns approximately 62% of the common
stock of Cox Radio and has approximately 94% 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 and 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. Cox Radio records an allowance for doubtful
accounts based on historical information, analysis of credit
memo data and any other relevant factors.

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, 2002,
2001 and 2000 were $8.4 million, $8.0 million and $8.4 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.

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.

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COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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 Issue (EITF) 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 the planning phase, as well as the
maintaining of the web site, should be expensed as incurred. In
addition, costs associated with content development and training
should also 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 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. 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 evaluates goodwill in each of its reporting
units (markets) for impairment annually, or more frequently
if certain circumstances are present. If the carrying amount of
goodwill in a reporting unit is greater than the implied value
of goodwill for that reporting unit determined from the
estimated fair value of the reporting units, 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. Upon completion of each signal upgrade, Cox
Radio reclassifies the applicable amount to FCC licenses based
on an independent appraisal.

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 and certain intangibles 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

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COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

recoverability based on a review of estimated
undiscounted cash flows. Long-lived assets and certain
intangibles to be disposed of are required to be reported at the
lower of carrying amount or fair value less cost to sell.

Income
Taxes

Deferred income taxes are provided based on the
liability method of accounting pursuant to SFAS No. 109,
Accounting for Income Taxes. The liability method
measures the expected tax impact of future taxable income or
deductions resulting from differences in the tax and financial
reporting bases of assets and liabilities reflected in the
consolidated balance sheets and the expected tax impact of
carryforwards for 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.

Pension,
Postretirement and Postemployment Benefits

Cox Enterprises generally provides defined
pension benefits to eligible employees based on years of service
and compensation during those years. Cox Enterprises also
provides certain health care and life insurance benefits to
eligible employees and retirees. For certain employees and
retirees of Cox Radio eligible for such coverages, these
benefits are provided through the Cox Enterprises plans.
Expenses related to these plans are allocated to Cox Radio
through the intercompany account. The amount of the allocations
is generally based on actuarial determinations of the effect of
Cox Radio employees participation in the Cox Enterprises
plans.

Incentive
Compensation Plans

Cox Radio accounts for stock compensation in
accordance with the requirements of Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations. See Note 12
for a general description of the plans referred to below. SFAS
No. 123, Accounting for Stock-Based
Compensation, requires disclosure of the pro forma effects
on net income and earnings per share as if Cox Radio had adopted
the fair value recognition provisions of SFAS No. 123. The
following tabular presentation reflects the assumptions used in
the determination of fair value utilizing the Black-Scholes
model.

Cox
Radio Employee Stock Purchase Plans

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

|                                |  |                    |           |                   |  |               |            |                   |  |  |            |  |  |  |            | 
|------------------------------- |  | ------------------ | --------- | ----------------- |  | ------------- | ---------- | ----------------- |  |  | ---------- |  |  |  | ---------- | 
|                                |  | September 16, 1999 |           | November 30, 2001 |  | June 15, 2002 |            | December 15, 2002
|                                |  |                    |           |                   |  |               |            |                  
|Risk-free interest rate         |  |                    | 5.67%     |                   |  |               | 2.50%      |                   |  |  | 2.36%      |  |  |  | 1.09%      | 
|Expected life                   |  |                    | 2.0 years |                   |  |               | 2.08 years |                   |  |  | 1.54 years |  |  |  | 1.04 years | 
|Expected stock price volatility |  |                    | 34.00%    |                   |  |               | 44.65%     |                   |  |  | 45.29%     |  |  |  | 44.86%     | 
|Expected dividend yield         |  |                    | n/a       |                   |  |               | n/a        |                   |  |  | n/a        |  |  |  | n/a        | 
|Fair value at enrollment date   |  |                    | $6.29     |                   |  |               | $8.91      |                   |  |  | $8.14      |  |  |  | $6.01      | 

44



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Cox
Radio Amended and Restated Long-Term Incentive Plan

The fair value of the options granted during
2002, 2001 and 2000 is estimated on the date of grant using the
Black-Scholes model with the following assumptions:

|                                |  |            |         |      |  |      |         |  |  |  |         | 
|------------------------------- |  | ---------- | ------- | ---- |  | ---- | ------- |  |  |  | ------- | 
|                                |  |           
|                                |  | Grant Date
|                                |  |           
|                                |  | 2002       |         | 2001 |  | 2000
|                                |  |            |         |      |  |     
|Risk-free interest rate         |  |            | 5.02%   |      |  |      | 4.94%   |  |  |  | 6.74%   | 
|Expected life                   |  |            | 6 years |      |  |      | 6 years |  |  |  | 6 years | 
|Expected stock price volatility |  |            | 44.70%  |      |  |      | 40.82%  |  |  |  | 32.33%  | 
|Expected dividend yield         |  |            | n/a     |      |  |      | n/a     |  |  |  | n/a     | 
|Fair value at grant date        |  |            | $12.38  |      |  |      | $10.33  |  |  |  | $14.16  | 

Had compensation cost for the Long-Term Incentive
Plan and Employee Stock Purchase Plans been determined based on
the fair value at the grant or enrollment dates for the above
awards in accordance with the fair value provisions of SFAS
No. 123 and the disclosure provisions of SFAS No. 148,
Cox Radios net income and net income per share in 2002,
2001 and 2000 would have been reduced to the pro forma amounts
indicated below, based on the assumptions discussed above:

|                                                                                                                                                    |                       |                               |        |      |  |      |        |      |  |   |         |      | 
|--------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------- | ----------------------------- | ------ | ---- |  | ---- | ------ | ---- |  | - | ------- | ---- | 
|                                                                                                                                                    |                       |                              
|                                                                                                                                                    |                       | Year Ended December 31,      
|                                                                                                                                                    |                       |                              
|                                                                                                                                                    |                       | 2002                          |        | 2001 |  | 2000
|                                                                                                                                                    |                       |                               |        |      |  |     
|                                                                                                                                                    |                       |                              
|                                                                                                                                                    |                       | (Amounts in Thousands, Except
|                                                                                                                                                    |                       | Per Share Data)              
|Net income, as reported                                                                                                                             |                       | $                             | 45,941 |      |  | $    | 20,691 |      |  | $ | 305,937 |     
|Deduct: total stock-based employee compensation
    expense determined under fair value based method for all awards,
    net of related tax effects |                       |                               | (8,571 | )    |  |      | (4,887 | )    |  |   | (2,660  | )   
|                                                                                                                                                    |                       |                               |        |      |  |      |        |      |  |   |         |     
|Pro forma net income                                                                                                                                |                       | $                             | 37,370 |      |  | $    | 15,804 |      |  | $ | 303,277 |     
|                                                                                                                                                    |                       |                               |        |      |  |      |        |      |  |   |         |     
|Earnings per share:                                                                                                                                 |                       |                               |        |      |  |      |        |      |  |   |         |     
|                                                                                                                                                    | Basic  as reported   |                               | $      | 0.46 |  |      | $      | 0.21 |  |   | $       | 3.28 | 
|                                                                                                                                                    |                       |                               |        |      |  |      |        |      |  |   |         |     
|                                                                                                                                                    | Basic  pro forma     |                               | $      | 0.37 |  |      | $      | 0.16 |  |   | $       | 3.25 | 
|                                                                                                                                                    |                       |                               |        |      |  |      |        |      |  |   |         |     
|                                                                                                                                                    | Diluted  as reported |                               | $      | 0.46 |  |      | $      | 0.21 |  |   | $       | 3.26 | 
|                                                                                                                                                    |                       |                               |        |      |  |      |        |      |  |   |         |     
|                                                                                                                                                    | Diluted  pro forma   |                               | $      | 0.37 |  |      | $      | 0.16 |  |   | $       | 3.23 | 
|                                                                                                                                                    |                       |                               |        |      |  |      |        |      |  |   |         |     

Use of
Estimates

The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States of America 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.

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 26%, 28% and 29% of total revenues for the years
ended December 31, 2002, 2001 and 2000, respectively.

45



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Recent
Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 142,
Goodwill and Other Intangible Assets, which requires
that goodwill and certain intangible assets not be amortized.
Instead, these assets are to be reviewed annually for impairment
and written down in the periods in which the recorded value
exceeds fair value. The provisions of SFAS No. 142 also
required the completion of a transitional impairment test within
six months of adoption, with any impairments identified treated
as a cumulative effect of a change in accounting principle. Cox
Radio adopted SFAS No. 142 on January 1, 2002. In
accordance with SFAS No. 142, Cox Radio discontinued the
amortization of its FCC licenses and goodwill effective
January 1, 2002. During the quarter ended March 31,
2002, Cox Radio recognized an after-tax impairment charge of
$13.9 million for FCC licenses in certain markets based on
independent appraisals as a result of adopting the provisions of
SFAS No. 142. See Note 7 for additional information.

In August 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, which supersedes SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of. SFAS No. 144
removes goodwill from its scope and retains the requirements of
SFAS No. 121 regarding the recognition of impairment losses
on long-lived assets held for use. SFAS No. 144 also
supersedes the accounting and reporting provisions of APB
Opinion No. 30, Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions, for the disposal of a segment of
a business. However, it retains the requirement in APB Opinion
No. 30 to report separately discontinued operations and
extends that reporting to a component of an entity that either
has been disposed of (by sale, abandonment or in a distribution
to owners) or is classified as held for sale. SFAS No. 144
is effective for fiscal years beginning after December 15,
2001 and interim periods within those fiscal years. Cox Radio
adopted SFAS No. 144 on January 1, 2002, and it did
not have a material impact on its financial position, cash flows
or results of operations.

In July 2002, the FASB issued SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal
Activities, which supersedes EITF Issue No. 94-3,
Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity. SFAS
No. 146 requires that liabilities associated with exit or
disposal activities be recognized when they are incurred. Under
EITF Issue No. 94-3, a liability for exit costs is
recognized at the date of a commitment to an exit plan. SFAS
No. 146 also requires that the liability be measured and
recorded at fair value. The provisions of SFAS No. 146 are
effective for restructuring activities initiated after
December 31, 2002.

In November 2002, the FASB issued FIN
No. 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others. This interpretation elaborates on
the disclosures to be made by a guarantor in its interim and
annual financial statements about obligations under certain
guarantees that it has issued. It also clarifies that a
guarantor is required to recognize, at the inception of a
guarantee, a liability for the fair value of the obligation
undertaken in issuing the guarantee. The initial recognition and
measurement requirement of FIN No. 45 is effective
prospectively for guarantees issued or modified after
December 31, 2002. The disclosure requirements of FIN
No. 45 are effective for interim and annual periods ending
after December 15, 2002. Cox Radio is the guarantor of
certain acquisition debt of Honolulu Broadcasting totaling $7.6
million at December 31, 2002. See Note 9 for
additional information on this guarantee. Cox Radio is currently
evaluating the impact of the application of FIN No. 45, but
Cox Radio does not believe that the recognition provisions of
FIN No. 45 will have a material effect on Cox Radios
consolidated financial statements.

In December 2002, the FASB issued SFAS
No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure. This
statement amends SFAS No. 123, Accounting for
Stock-Based Compensation, to provide alternative methods
of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In
addition, SFAS No. 148 amends the

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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

disclosure requirements of SFAS No. 123 to
require prominent disclosures in both annual and interim
financial statements about the method of accounting for
stock-based employee compensation and the effect of the method
used on reported results. The annual disclosure provisions of
SFAS No. 148 are effective for Cox Radios 2002 annual
financial statements and the interim disclosure provisions are
effective for Cox Radios first quarter of 2003. Cox Radio
has adopted the disclosure provisions of SFAS No. 148 as
reflected in the Incentive Compensation Plans section of this
Note.

In October 2002, the EITF reached a
consensus on Issue No. 02-17, Recognition of Customer
Relationship Intangible Assets Acquired in a Business
Combination. This consensus requires that certain customer
relationships be considered in performing goodwill impairment
testing under SFAS No. 142. The consensus is effective for
business combinations consummated and goodwill impairment tests
performed after October 25, 2002. Cox Radio will consider
this consensus as necessary in its January 1, 2003
impairment testing under SFAS No. 142.

Reclassifications

Certain prior year amounts have been reclassified
for comparative purposes.

3. Earnings per Common Share and Capital
Structure

|                                                                                    |                                                                                    |                                   |         |        |   |      |         |        |   |   |         |       |  
|----------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------- | --------------------------------- | ------- | ------ | - | ---- | ------- | ------ | - | - | ------- | ----- | -
|                                                                                    |                                                                                    |                                  
|                                                                                    |                                                                                    | Year Ended December 31,          
|                                                                                    |                                                                                    |                                  
|                                                                                    |                                                                                    | 2002                              |         | 2001   |   | 2000
|                                                                                    |                                                                                    |                                   |         |        |   |     
|                                                                                    |                                                                                    |                                  
|                                                                                    |                                                                                    | (Amounts in Thousands, Except Per
|                                                                                    |                                                                                    | Share Data)                      
|Income before cumulative effect of accounting
    change                            |                                                                                    | $                                 | 59,875  |        |   | $    | 21,478  |        |   | $ | 305,937 |      
|Cumulative effect of accounting change                                              |                                                                                    |                                   | (13,934 | )      |   |      | (787    | )      |   |   |        |      
|                                                                                    |                                                                                    |                                   |         |        |   |      |         |        |   |   |         |      
|Net income                                                                          |                                                                                    | $                                 | 45,941  |        |   | $    | 20,691  |        |   | $ | 305,937 |      
|                                                                                    |                                                                                    |                                   |         |        |   |      |         |        |   |   |         |      
|Earnings Per Share  Basic                                                          |                                                                                    |                                   |         |        |   |      |         |        |   |   |         |      
|Weighted-average common shares outstanding                                          |                                                                                    |                                   | 100,098 |        |   |      | 99,720  |        |   |   | 93,286  |      
|                                                                                    |                                                                                    |                                   |         |        |   |      |         |        |   |   |         |      
|Income before cumulative effect of accounting
    change per common share  basic   |                                                                                    | $                                 | 0.60    |        |   | $    | 0.22    |        |   | $ | 3.28    |      
|Cumulative effect of accounting change per common
    share  basic                 |                                                                                    |                                   | (0.14   | )      |   |      | (0.01   | )      |   |   |        |      
|                                                                                    |                                                                                    |                                   |         |        |   |      |         |        |   |   |         |      
|Net income per common share  basic                                                 |                                                                                    | $                                 | 0.46    |        |   | $    | 0.21    |        |   | $ | 3.28    |      
|                                                                                    |                                                                                    |                                   |         |        |   |      |         |        |   |   |         |      
|Earnings Per Share 
    Diluted                                                    |                                                                                    |                                   |         |        |   |      |         |        |   |   |         |      
|Weighted-average common shares outstanding                                          |                                                                                    |                                   | 100,098 |        |   |      | 99,720  |        |   |   | 93,286  |      
|                                                                                    | Shares issuable on exercise of dilutive options                                    |                                   |         | 3,442  |   |      |         | 2,236  |   |   |         | 1,411 |  
|                                                                                    | Shares assumed to be purchased with proceeds of
    options                        |                                   |         | (3,069 | ) |      |         | (1,828 | ) |   |         | (931  | )
|                                                                                    | Shares issuable pursuant to Employee Stock
    Purchase Plan                       |                                   |         | 245    |   |      |         | 271    |   |   |         | 229   |  
|                                                                                    | Shares assumed to be purchased with proceeds from
    Employee Stock Purchase Plan |                                   |         | (184   | ) |      |         | (211   | ) |   |         | (59   | )
|                                                                                    |                                                                                    |                                   |         |        |   |      |         |        |   |   |         |      
|Shares applicable to earnings per
    share  diluted                               |                                                                                    |                                   | 100,532 |        |   |      | 100,188 |        |   |   | 93,936  |      
|                                                                                    |                                                                                    |                                   |         |        |   |      |         |        |   |   |         |      
|Income before cumulative effect of accounting
    change per common share  diluted |                                                                                    | $                                 | 0.60    |        |   | $    | 0.22    |        |   | $ | 3.26    |      
|Cumulative effect of accounting change per common
    share  diluted               |                                                                                    |                                   | (0.14   | )      |   |      | (0.01   | )      |   |   |        |      
|                                                                                    |                                                                                    |                                   |         |        |   |      |         |        |   |   |         |      
|Net income per common share  diluted                                               |                                                                                    | $                                 | 0.46    |        |   | $    | 0.21    |        |   | $ | 3.26    |      
|                                                                                    |                                                                                    |                                   |         |        |   |      |         |        |   |   |         |      

47



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The options excluded from the computation of
diluted net income per common share for the years ended
December 31, 2002, 2001 and 2000, because the exercise
price of these options was greater than the average market price
of the Class A common stock at year end, are summarized
below:

|     |  |                        |     | 
|---- |  | ---------------------- | --- | 
|     |  | Options               
|     |  | Outstanding           
|     |  |                       
|     |  | (Amounts in Thousands)
|2002 |  |                        | 767 | 
|2001 |  |                        | 807 | 
|2000 |  |                        | 904 | 

On February 7, 2000, Cox Radio announced
that its Board of Directors approved a three-for-one stock
split. The stock split resulted in a decrease in par value of
each share, including shares of preferred stock (authorized with
no shares currently outstanding), from $1.00 to $0.33 per share.
The stock split was approved at the 2000 Annual Meeting of
Shareholders and affected by a distribution on May 19, 2000
to shareholders of record on May 12, 2000. Financial
information contained elsewhere herein has been adjusted where
necessary to reflect the impact of this stock split.

On June 27, 2000, Cox Radio consummated a
public offering of 8,800,000 shares of its Class A common
stock pursuant to its universal shelf registration statement and
completed a concurrent private placement of 3,591,954 shares of
Class A common stock directly to Cox Enterprises at the
public offering price per share, less underwriting discounts and
commissions. Cox Radio received net proceeds of approximately
$344.2 million from this offering, which it used to partially
finance acquisitions, to repay outstanding indebtedness and for
general corporate purposes.

4. Acquisitions and Dispositions of
Businesses

During the past several years, Cox Radio has
actively managed its portfolio of radio stations through
selected acquisitions, dispositions and exchanges, as well as
through the use of LMAs and JSAs. Under an LMA or a JSA, Cox
Radio provides programming or sales and marketing services or a
combination of such services for radio stations owned by others.
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 dates of such
agreements, and such revenues and expenses are not included in
Cox Radios operations as of the date such agreements are
terminated.

All acquisitions discussed below have been or
will be accounted for using the purchase method. As such, the
results of operations of the acquired stations have been or will
be included in the results of operations from the date of
acquisition. Specific transactions entered into by Cox Radio
during the past three years are discussed below.

In January 2000, Cox Radio acquired the assets of
KRTQ-FM (formerly KTFX-FM) in Tulsa, Oklahoma, for consideration
of $3.5 million. Cox Radio had been operating this station
pursuant to an LMA since January 1999.

In January 2000, Cox Radio disposed of the assets
of KACE-FM and KRTO-FM, serving Los Angeles, California, for
consideration of approximately $75 million, resulting in a
pre-tax gain of approximately $46.6 million.

In April 2000, the LMA for WCNN-AM, serving
Atlanta, Georgia, terminated.

In April 2000, Cox Radio disposed of the assets
of KGMZ-FM, serving Honolulu, Hawaii, for approximately $6.6
million. The resulting loss on disposition was immaterial. Cox
Radio continues to manage this stations local, regional
and national advertising sales efforts under a JSA. In addition,
Cox Radio is a guarantor of the buyers financing for this
transaction.

48



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

In May 2000, Cox Radio acquired the assets of
KINE-FM, KCCN-FM and KCCN-AM, serving Honolulu, Hawaii, for
consideration of approximately $17.8 million.

In July 2000, Cox Radio acquired the outstanding
capital stock of Marlin Broadcasting, Inc., which owned radio
stations WPYM-FM (formerly WTMI-FM) serving Miami, Florida,
WCCC-FM and WCCC-AM serving Hartford, Connecticut, and WBOQ-FM
serving Gloucester, Massachusetts, for approximately $125
million. As part of this transaction, Cox Radio sold those
assets of Marlin comprising WCCC-FM, WCCC-AM and WBOQ-FM to
certain of the former principals of Marlin for approximately $25
million. Cox Radio did not recognize any gain or loss on the
sale of these assets.

In August 2000, Cox Radio acquired WEDR-FM in
Miami, Florida; WFOX-FM in Atlanta, Georgia; WFYV-FM, WAPE-FM,
WBWL-AM, WKQL-FM, WMXQ-FM and WOKV-AM in Jacksonville, Florida;
WEFX-FM, WNLK-AM, WKHL-FM and WSTC-AM in Stamford/Norwalk,
Connecticut; and WPLR-FM and national and local sales and
marketing rights at WYBC-FM in New Haven, Connecticut in
exchange for KFI-AM and KOST-FM in Los Angeles, California, plus
approximately $3 million. The transaction was accounted for as a
purchase business combination with a fair value of $473 million
based on an independent appraisal. Cox Radio recorded a $429.9
million pre-tax gain on the transaction in the third quarter of
2000. Cox Radio had operated the acquired stations (other than
WYBC-FM) pursuant to an LMA and WYBC-FM pursuant to a JSA since
October 1999. Cox Radio continues to operate WYBC-FM pursuant to
a JSA. Cox Radio obtained a temporary waiver of the FCCs
newspaper-radio cross-ownership rule for the acquisition of
WFOX-FM in Atlanta, Georgia.

In August 2000, Cox Radio acquired the assets of
radio stations KKBQ-FM, KLDE-FM and KTHT-FM (formerly KKTL-FM),
serving Houston, Texas, and WKHK-FM, WMXB-FM, WKLR-FM and
WVBB-AM (formerly WTVR-AM), serving Richmond, Virginia, for
consideration of approximately $380 million.

In August 2000, Cox Radio acquired the capital
stock of Midwestern Broadcasting Company, Inc., which owned
WALR-FM, serving Atlanta, Georgia, for $280 million. In a
related transaction with Salem Communications Corporation in
September 2000, Cox Radio exchanged the license and transmitting
facilities of WALR-FM, as well as the license and transmitting
facilities of radio stations KLUP-AM, serving San Antonio,
Texas, and WSUN-AM (formerly WFNS-AM), serving Tampa, Florida,
for the license and transmitting facilities of radio station
KHPT-FM (formerly KKHT-FM), serving Houston, Texas. Cox Radio
retained the intellectual property of WALR-FM and is
broadcasting WALR-FMs programming on its WJZF-FM signal in
Atlanta, Georgia. Cox Radio changed WJZF-FMs call letters
to WALR-FM.

In February 2001, Cox Radio acquired WDYL-FM
serving Richmond, Virginia, and WJMZ-FM and WHZT-FM (formerly
WPEK-FM) serving Greenville, South Carolina, for a total of
$52.5 million.

In February 2001, Cox Radio entered into a JSA to
provide sales and marketing services for WARV-FM serving
Richmond, Virginia, and Cox Radio simultaneously guaranteed the
owners financing for the acquisition of this station. In
February 2003, the owner sold WARV-FM and repaid the $1.0
million of indebtedness associated with this station, thereby
extinguishing Cox Radios guarantee of that indebtedness.
Also in February 2003, the JSA related to this station
terminated.

In February 2001, Cox Radio disposed of WHOO-AM
serving Orlando, Florida, for $5 million, resulting in a pre-tax
gain of approximately $2.4 million.

In May 2001, Cox Radio disposed of the assets of
KGTO-AM serving Tulsa, Oklahoma, for $0.5 million. The
resulting gain on disposition was immaterial.

In July 2001, Cox Radio disposed of the assets of
WVBB-AM (formerly WTVR-AM) serving Richmond, Virginia, for $0.7
million. The resulting loss on disposition was immaterial.

49



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COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

In January 2002, Cox Radio disposed of the assets
of KRTR-AM (formerly KGMZ-AM) serving Honolulu, Hawaii, for $0.6
million. The buyer of the station had been operating the station
under an LMA since October 2001. The resulting loss on
disposition was immaterial.

In June 2002, Cox Radio disposed of the assets of
KCCN-AM serving Honolulu, Hawaii, for $0.8 million. The
resulting gain on disposition was immaterial.

In August 2002, Cox Radio disposed of the assets
of WBWL-AM serving Jacksonville, Florida, for $2.5 million. The
resulting gain on disposition was immaterial.

The following table summarizes goodwill and FCC
licenses recognized from all purchase business combinations
occurring during each of the three years reflected below,
determined based on independent appraisals:

|             |  |                        |   |      |  |      |        |  |  |   |           | 
|------------ |  | ---------------------- | - | ---- |  | ---- | ------ |  |  | - | --------- | 
|             |  |                       
|             |  | December 31,          
|             |  |                       
|             |  | 2002                   |   | 2001 |  | 2000
|             |  |                        |   |      |  |     
|             |  |                       
|             |  | (Amounts in Thousands)
|Goodwill     |  | $                      |  |      |  | $    | 492    |  |  | $ | 2,675     | 
|FCC Licenses |  | $                      |  |      |  | $    | 50,317 |  |  | $ | 1,222,674 | 

The pro forma effects of the transactions entered
into in 2002 are immaterial for the year ended December 31,
2002.

5. Investments

iBiquity Digital
Corporation On
December 21, 1998 and March 1, 1999, Cox Radio
purchased shares of common stock of iBiquity Digital Corporation
(formerly USA Digital Radio, Inc.), a developer of digital radio
broadcasting technology, 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.

6. Property and Equipment

|                                    |                            |                        |         |        |  |   |         |        | 
|----------------------------------- | -------------------------- | ---------------------- | ------- | ------ |  | - | ------- | ------ | 
|                                    |                            |                       
|                                    |                            | December 31,          
|                                    |                            |                       
|                                    |                            | 2002                   |         | 2001  
|                                    |                            |                        |         |       
|                                    |                            |                       
|                                    |                            | (Amounts in Thousands)
|Land                                |                            | $                      | 7,874   |        |  | $ | 8,060   |       
|Buildings and building improvements |                            |                        | 26,909  |        |  |   | 24,345  |       
|Broadcast equipment                 |                            |                        | 95,904  |        |  |   | 88,864  |       
|Construction in progress            |                            |                        | 2,788   |        |  |   | 4,141   |       
|                                    |                            |                        |         |        |  |   |         |       
|Property and equipment, at cost     |                            |                        | 133,475 |        |  |   | 125,410 |       
|Less accumulated depreciation       |                            |                        | (54,171 | )      |  |   | (45,304 | )     
|                                    |                            |                        |         |        |  |   |         |       
|                                    | Net property and equipment |                        | $       | 79,304 |  |   | $       | 80,106 | 
|                                    |                            |                        |         |        |  |   |         |       

7.     Goodwill and
Other Intangible Assets

On January 1, 2002, Cox Radio adopted SFAS
No. 142, Goodwill and Other Intangible Assets,
which requires that goodwill and certain intangible assets,
including FCC licenses, no longer be amortized but instead be
tested for impairment at least annually. Cox Radios annual
impairment testing date is January 1st.

In accordance with SFAS No. 142, Cox Radio
discontinued the amortization of its FCC licenses and goodwill
effective January 1, 2002. During the quarter ended
March 31, 2002, Cox Radio recognized an after-tax
impairment charge of $13.9 million for FCC licenses in
certain markets based on independent

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COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

appraisals as a result of adopting the provisions
of SFAS No. 142. A reconciliation of previously reported
net income and earnings per share to the amounts adjusted for
the exclusion of amortization of goodwill and intangible assets
with indefinite lives, net of the related income tax effect in
accordance with SFAS No. 142, follows:

|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|--------------------------------------------------------------------------------------- |  | --------------------------------- | ------- | ---- |  | ---- | ------ | - |  | - | ------- | 
|                                                                                        |  |                                  
|                                                                                        |  | December 31,                     
|                                                                                        |  |                                  
|                                                                                        |  | 2002                              |         | 2001 |  | 2000
|                                                                                        |  |                                   |         |      |  |     
|                                                                                        |  |                                  
|                                                                                        |  | (Amounts in Thousands, Except Per
|                                                                                        |  | Share Data)                      
|Income before cumulative effect of accounting
    change                                |  | $                                 | 59,875  |      |  | $    | 21,478 |   |  | $ | 305,937 | 
|Cumulative effect of accounting change                                                  |  |                                   | (13,934 | )    |  |      | (787   | ) |  |   |        | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|Net income                                                                              |  | $                                 | 45,941  |      |  | $    | 20,691 |   |  | $ | 305,937 | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|Income before cumulative effect of accounting
    change                                |  | $                                 | 59,875  |      |  | $    | 21,478 |   |  | $ | 305,937 | 
|Add: FCC license and goodwill amortization, net
    of tax                              |  |                                   |        |      |  |      | 37,349 |   |  |   | 22,763  | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|Adjusted income before cumulative effect of
    accounting change                       |  | $                                 | 59,875  |      |  | $    | 58,827 |   |  | $ | 328,700 | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|Net income per common share before cumulative
    effect of accounting change  basic   |  |                                   |         |      |  |      |        |   |  |   |         | 
|Net income per common share before cumulative
    effect of accounting change           |  | $                                 | 0.60    |      |  | $    | 0.22   |   |  | $ | 3.28    | 
|FCC license and goodwill amortization, net of
    tax, per common share                 |  |                                   |        |      |  |      | 0.37   |   |  |   | 0.24    | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|Adjusted income per common share before
    cumulative effect of accounting change      |  | $                                 | 0.60    |      |  | $    | 0.59   |   |  | $ | 3.52    | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|Net income per common share before cumulative
    effect of accounting change  diluted |  |                                   |         |      |  |      |        |   |  |   |         | 
|Income per common share before cumulative effect
    of accounting change               |  | $                                 | 0.60    |      |  | $    | 0.22   |   |  | $ | 3.26    | 
|FCC license and goodwill amortization, net of
    tax, per common share                 |  |                                   |        |      |  |      | 0.37   |   |  |   | 0.24    | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|Adjusted income per common share before
    cumulative effect of accounting change      |  | $                                 | 0.60    |      |  | $    | 0.59   |   |  | $ | 3.50    | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|Net income                                                                              |  | $                                 | 45,941  |      |  | $    | 20,691 |   |  | $ | 305,937 | 
|Add: FCC license and goodwill amortization, net
    of tax                              |  |                                   |        |      |  |      | 37,349 |   |  |   | 22,763  | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|Adjusted net income                                                                     |  | $                                 | 45,941  |      |  | $    | 58,040 |   |  | $ | 328,700 | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|Net income per common share 
    basic                                                 |  |                                   |         |      |  |      |        |   |  |   |         | 
|Net income per common share                                                             |  | $                                 | 0.46    |      |  | $    | 0.21   |   |  | $ | 3.28    | 
|FCC license and goodwill amortization, net of
    tax, per common share                 |  |                                   |        |      |  |      | 0.37   |   |  |   | 0.24    | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|Adjusted net income per common share                                                    |  | $                                 | 0.46    |      |  | $    | 0.58   |   |  | $ | 3.52    | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|Net income per common share 
    diluted                                               |  |                                   |         |      |  |      |        |   |  |   |         | 
|Net income, per common share                                                            |  | $                                 | 0.46    |      |  | $    | 0.21   |   |  | $ | 3.26    | 
|FCC license and goodwill amortization, net of
    tax, per common share                 |  |                                   |        |      |  |      | 0.37   |   |  |   | 0.24    | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 
|Adjusted net income per common share                                                    |  | $                                 | 0.46    |      |  | $    | 0.58   |   |  | $ | 3.50    | 
|                                                                                        |  |                                   |         |      |  |      |        |   |  |   |         | 

51



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table reflects the components of
intangible assets as of December 31, 2002 and 2001:

|                                              |  |                        |           |              |  |              |     |  |  |   |           | 
|--------------------------------------------- |  | ---------------------- | --------- | ------------ |  | ------------ | --- |  |  | - | --------- | 
|                                              |  | Gross Carrying         |           | Accumulated  |  | Net Carrying
|                                              |  | Value                  |           | Amortization |  | Value       
|                                              |  |                        |           |              |  |             
|                                              |  |                       
|                                              |  | (Amounts in Thousands)
|2002                                          |  |                        |           |              |  |              |     |  |  |   |           | 
|FCC licenses and other intangible assets, net |  | $                      | 2,023,908 |              |  | $            | 383 |  |  | $ | 2,023,525 | 
|Goodwill                                      |  | $                      | 46,514    |              |  | $            |    |  |  | $ | 46,514    | 
|2001                                          |  |                        |           |              |  |              |     |  |  |   |           | 
|FCC licenses and other intangible assets, net |  | $                      | 2,049,422 |              |  | $            | 265 |  |  | $ | 2,049,157 | 
|Goodwill                                      |  | $                      | 46,514    |              |  | $            |    |  |  | $ | 46,514    | 

Amortization expense for the years ended
December 31, 2002 and 2001 was approximately $0.1 million
and $58.2 million, respectively. Amortization expense for the
next five years is not expected to be material.

8. Income Taxes

Income tax expense (benefit) is summarized
as follows:

|          |         |                                    |   |        |        |      |   |         |         |   |   |         |         | 
|--------- | ------- | ---------------------------------- | - | ------ | ------ | ---- | - | ------- | ------- | - | - | ------- | ------- | 
|          |         |                                   
|          |         | Year Ended December 31,           
|          |         |                                   
|          |         | 2002                               |   | 2001   |        | 2000
|          |         |                                    |   |        |        |     
|          |         |                                   
|          |         | (Amounts in Thousands)            
|Current:  |         |                                    |   |        |        |      |   |         |         |   |   |        
|          | Federal |                                    | $ | 12,608 |        |      | $ | 8,105   |         |   | $ | 16,705  |        
|          | State   |                                    |   | 2,114  |        |      |   | 2,075   |         |   |   | 2,360   |        
|          |         |                                    |   |        |        |      |   |         |         |   |   |        
|          |         | Total current                      |   |        | 14,722 |      |   |         | 10,180  |   |   |         | 19,065  | 
|          |         |                                    |   |        |        |      |   |         |         |   |   |        
|Deferred: |         |                                    |   |        |        |      |   |         |         |   |   |        
|          | Federal |                                    |   | 19,816 |        |      |   | 7,073   |         |   |   | 167,685 |        
|          | State   |                                    |   | 3,760  |        |      |   | (18,560 | )       |   |   | 41,797  |        
|          |         |                                    |   |        |        |      |   |         |         |   |   |        
|          |         | Total deferred                     |   |        | 23,576 |      |   |         | (11,487 | ) |   |         | 209,482 | 
|          |         |                                    |   |        |        |      |   |         |         |   |   |        
|          |         | Total income tax expense (benefit) |   | $      | 38,298 |      |   | $       | (1,307  | ) |   | $       | 228,547 | 
|          |         |                                    |   |        |        |      |   |         |         |   |   |        

52



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

|                                              |                                     |                                  |   |          |          |   |   |          |          |  
|--------------------------------------------- | ----------------------------------- | -------------------------------- | - | -------- | -------- | - | - | -------- | -------- | -
|                                              |                                     |                                 
|                                              |                                     | December 31,                    
|                                              |                                     |                                 
|                                              |                                     | 2002                             |   | 2001    
|                                              |                                     |                                  |   |         
|                                              |                                     |                                 
|                                              |                                     | (Amounts in Thousands)          
|Current deferred tax assets:                  |                                     |                                  |   |          |          |   |   |         
|                                              | Provision for doubtful accounts     |                                  | $ | 2,357    |          |   | $ | 1,811    |         
|                                              | Other                               |                                  |   |         |          |   |   | 171      |         
|                                              |                                     |                                  |   |          |          |   |   |         
|                                              |                                     | Total net current assets         |   |          | 2,357    |   |   |          | 1,982    |  
|                                              |                                     |                                  |   |          |          |   |   |         
|Noncurrent deferred tax assets (liabilities): |                                     |                                  |   |          |          |   |   |         
|                                              | Property and equipment              |                                  |   | (49,210  | )        |   |   | (49,275  | )       
|                                              | Intangibles                         |                                  |   | (446,303 | )        |   |   | (423,947 | )       
|                                              | Net operating loss carryforwards    |                                  |   | 643      |          |   |   | 3,133    |         
|                                              | Unrealized loss on cash flow hedges |                                  |   | 2,691    |          |   |   | 2,019    |         
|                                              | Impairment of FCC licenses          |                                  |   | 9,342    |          |   |   |         |         
|                                              | Other                               |                                  |   | 551      |          |   |   | 48       |         
|                                              |                                     |                                  |   |          |          |   |   |         
|                                              |                                     | Total net noncurrent liabilities |   |          | (482,286 | ) |   |          | (468,022 | )
|                                              |                                     |                                  |   |          |          |   |   |         
|                                              |                                     | Net deferred tax liabilities     |   | $        | (479,929 | ) |   | $        | (466,040 | )
|                                              |                                     |                                  |   |          |          |   |   |         

As of December 31, 2002, Cox Radio had net
operating loss carryforwards under the laws of various state
jurisdictions in which it operates in the amount of $17.5
million. These net operating loss carryforwards expire on
various dates through 2022. Cox Radio anticipates that these net
operating loss carryforwards will be realized within the
allowable periods, therefore, no valuation allowance is deemed
necessary.

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

|                                                                                  |                              |                         |        |        |  |      |         |        |   |   |         |         | 
|--------------------------------------------------------------------------------- | ---------------------------- | ----------------------- | ------ | ------ |  | ---- | ------- | ------ | - | - | ------- | ------- | 
|                                                                                  |                              |                        
|                                                                                  |                              | Year Ended December 31,
|                                                                                  |                              |                        
|                                                                                  |                              | 2002                    |        | 2001   |  | 2000
|                                                                                  |                              |                         |        |        |  |     
|                                                                                  |                              |                        
|                                                                                  |                              | (Amounts in Thousands) 
|Federal statutory income tax rate                                                 |                              |                         | 35     | %      |  |      | 35      | %      |   |   | 35      | %      
|Computed tax expense at federal statutory rates
    on income before income taxes |                              | $                       | 34,361 |        |  | $    | 7,083   |        |   | $ | 187,069 |        
|State income taxes (net of federal tax benefit)                                   |                              |                         | 3,818  |        |  |      | 216     |        |   |   | 28,702  |        
|Change in estimated effective state tax rates                                     |                              |                         |       |        |  |      | (10,932 | )      |   |   |        |        
|Non-deductible travel and entertainment expenses                                  |                              |                         | 611    |        |  |      | 604     |        |   |   | 1,393   |        
|Non-deductible amortization of intangibles                                        |                              |                         |       |        |  |      | 2,157   |        |   |   | 12,506  |        
|Benefit arising from low income housing credits                                   |                              |                         | (609   | )      |  |      | (608    | )      |   |   | (608    | )      
|Other, net                                                                        |                              |                         | 117    |        |  |      | 173     |        |   |   | (515    | )      
|                                                                                  |                              |                         |        |        |  |      |         |        |   |   |         |        
|                                                                                  | Income tax expense (benefit) |                         | $      | 38,298 |  |      | $       | (1,307 | ) |   | $       | 228,547 | 
|                                                                                  |                              |                         |        |        |  |      |         |        |   |   |         |        

Upon filing, in 2001, of Cox Radios state
income tax returns for 2000, Cox Radio determined that a lower
effective rate for state income taxes was appropriate 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, an adjustment of
approximately $10.9 million was recorded in 2001.

Cox Radio is currently subject to various federal
and state income tax audits. Cox Radio does not believe that
current income tax audits will have a material impact on its
financial statements. Management

53



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

believes that any additional liabilities arising
from these current tax-related audits are sufficiently provided
for at December 31, 2002 based on its assessment of the
risk of loss associated with Cox Radios tax contingencies
in accordance with SFAS No. 5, Accounting for
Contingencies.

9. Long-Term Debt and
Commitments

Cox Radios debt at December 31, 2002
and 2001, consists of the following:

|                                             |       |                        |         |         |  |   |         |         | 
|-------------------------------------------- | ----- | ---------------------- | ------- | ------- |  | - | ------- | ------- | 
|                                             |       | 2002                   |         | 2001   
|                                             |       |                        |         |        
|                                             |       |                       
|                                             |       | (Amounts in Thousands)
|6.25% note payable, due in May 2003(1)(2)    |       | $                      | 99,998  |         |  | $ | 99,989  |        
|6.375% note payable, due in May 2005(1)      |       |                        | 99,902  |         |  |   | 99,855  |        
|6.625% note payable, due in February 2006(3) |       |                        | 249,702 |         |  |   | 249,606 |        
|Revolving credit facility                    |       |                        | 165,000 |         |  |   | 255,000 |        
|                                             |       |                        |         |         |  |   |         |        
|                                             | Total |                        | $       | 614,602 |  |   | $       | 704,450 | 
|                                             |       |                        |         |         |  |   |         |        






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | At December 31, 2002 and December 31,
    2001, the estimated aggregate fair values of the 6.25% notes and
    the 6.375% notes were approximately $207.9 million and $205.8
    million, respectively, based on quoted market prices.                                                                                                                                                                                                                                                                                                       
|(2) | As of December 31, 2002, $100 million
    principal amount of notes due in 2003 is excluded from current
    liabilities because Cox Radio intends to refinance this
    obligation on a long-term basis and currently has the ability to
    do so under its existing five-year facility. This credit
    facility had unused capacity of $185 million as of
    December 31, 2002. Cox Radio may also refinance this
    obligation through the issuance of debt or equity securities
    depending on market conditions and other factors.
|(3) | At December 31, 2002 and December 31,
    2001, the estimated fair value of these notes was approximately
    $269.3 million and $256.8 million, respectively, based
    on quoted market prices.                                                                                                                                                                                                                                                                                                                                            

On June 30, 2000, Cox Radio entered into a
$350 million, five-year senior unsecured revolving credit
facility and a $350 million, 364-day senior unsecured
revolving credit facility, and on June 28, 2002, Cox Radio
replaced its then existing 364-day senior unsecured revolving
credit facility with a $150 million, 364-day senior unsecured
revolving credit facility. The interest rate for both the
364-day facility and the five-year facility is, at Cox
Radios option: the greater of the prime rate or the
federal funds borrowing rate plus 0.5%; the London Interbank
Offered Rate plus a spread based on the credit ratings of Cox
Radios senior long-term debt; or the bid rate for the
purchase of certificates of deposit of equal principal amount
and maturity plus a spread based on the credit ratings of Cox
Radios senior long-term debt. Under the new 364-day
facility, Cox Radio may also choose an interest rate based on
the federal funds rate plus a spread based on the credit ratings
of Cox Radios senior long-term debt and certain financial
covenants. The 364-day facility also provides for a letter of
credit facility. The facilities include commitment fees on the
unused portion of the total amount available of 0.09% to 0.25%
based on the credit ratings of Cox Radios senior long-term
debt. Each facility contains, among other provisions, specified
leverage and interest coverage requirements, the terms of which
are defined within each credit facility. At December 31,
2002, Cox Radio was in compliance with these covenants. Cox
Radios credit facilities contain events of default based
on (i) the failure to pay when due other debt, the
outstanding amount of which exceeds $25 million, after the
expiration of applicable grace periods and (ii) the
acceleration of other debt, the outstanding amount of which
exceeds $25 million. At December 31, 2002, Cox Radio
had approximately $165 million of outstanding indebtedness
under the five-year facility with $185 million available, and no
amounts outstanding under the 364-day facility with
$150 million available. The interest rate applied to
amounts due under the bank credit facilities was 2.1% at
December 31, 2002. At December 31, 2001, Cox Radio had
approximately $255 million of outstanding indebtedness under the
five-year facility with $95 million available, and no
amounts outstanding under the 364-day facility with
$350 million available. The interest rate applied to
amounts due under the bank credit facilities was 2.8% at
December 31, 2001. Since the interest rate is variable, the
recorded balance of the credit facilities approximates fair
value. See Note 10 for a discussion of Cox Radios
interest rate swap agreements.

54



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

On June 20, 2002, Moodys Investors
Service, Inc. lowered its rating on Cox Radios senior,
unsecured, long-term debt securities from Baa2 to Baa3 with a
negative outlook. Following this action, Cox Radios
Moodys rating remains investment grade. This action did
not have a material adverse effect on Cox Radios financial
position, results of operations or cash flows.

Cox Radio has an effective universal shelf
registration statement under which Cox Radio may from time to
time offer and issue debentures, notes, bonds and other evidence
of 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 offer and issue preferred securities
of the trusts for a maximum aggregate offering amount of
$750 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. At
December 31, 2002 and December 31, 2001,
$244.8 million was available under the universal shelf
registration statement.

Cox Radio leases land, office facilities, and
various items of equipment. Rental expense under operating
leases amounted to $10.3 million in 2002, $9.1 million
in 2001 and $8.6 million in 2000.

Cox Radio also has various commitments under the
following types of contracts: operating leases; long-term debt;
sports programming and on-air personalities and other operating
contracts with aggregate minimum annual commitments as of
December 31, 2002 as follows:

|                                            |       |                        |         |         |  |      |         |         |  |      |        |        |  |            |         |         |  |   |         |         |  |   |       |       |  |   |        |        | 
|------------------------------------------- | ----- | ---------------------- | ------- | ------- |  | ---- | ------- | ------- |  | ---- | ------ | ------ |  | ---------- | ------- | ------- |  | - | ------- | ------- |  | - | ----- | ----- |  | - | ------ | ------ | 
|                                            |       |                       
|                                            |       | Payments Due by Period
|                                            |       |                       
|                                            |       | Total                  |         | 2003    |  | 2004 |         | 2005    |  | 2006 |        | 2007   |  | After 2007
|                                            |       |                        |         |         |  |      |         |         |  |      |        |        |  |           
|                                            |       |                       
|                                            |       | (Amounts in Thousands)
|Operating leases                            |       | $                      | 35,638  |         |  | $    | 5,129   |         |  | $    | 4,648  |        |  | $          | 4,538   |         |  | $ | 4,207   |         |  | $ | 3,375 |       |  | $ | 13,741 |       
|Long-term debt                              |       |                        | 615,000 |         |  |      | 100,000 |         |  |      |       |        |  |            | 265,000 |         |  |   | 250,000 |         |  |   |      |       |  |   |       |       
|Sports programming and on-air personalities |       |                        | 52,481  |         |  |      | 23,768  |         |  |      | 19,344 |        |  |            | 5,098   |         |  |   | 3,171   |         |  |   | 1,100 |       |  |   |       |       
|Other operating contracts                   |       |                        | 2,084   |         |  |      | 1,294   |         |  |      | 158    |        |  |            | 158     |         |  |   | 158     |         |  |   | 158   |       |  |   | 158    |       
|                                            |       |                        |         |         |  |      |         |         |  |      |        |        |  |            |         |         |  |   |         |         |  |   |       |       |  |   |        |       
|                                            | Total |                        | $       | 705,203 |  |      | $       | 130,191 |  |      | $      | 24,150 |  |            | $       | 274,794 |  |   | $       | 257,536 |  |   | $     | 4,633 |  |   | $      | 13,899 | 
|                                            |       |                        |         |         |  |      |         |         |  |      |        |        |  |            |         |         |  |   |         |         |  |   |       |       |  |   |        |       

Cox Radio is the guarantor of certain senior debt
of Honolulu Broadcasting, Inc. totaling $7.6 million.
Honolulu Broadcasting owns WARV-FM, serving Richmond, Virginia,
and KGMZ-FM, serving Honolulu, Hawaii. This debt consists of a
one-year renewable term loan secured by the assets of WARV-FM
and KGMZ-FM, which represents Honolulu Broadcastings
financing of the purchase of these stations. Cox Radio provides
sales and marketing services under JSAs to these stations
pursuant to which Cox Radio sells advertising on the stations,
which it records as revenues, provides marketing services for
the stations, and pays a JSA fee to Honolulu Broadcasting in an
amount sufficient to service this debt. During February 2003,
Honolulu Broadcasting sold WARV-FM, terminating the related JSA,
and repaid $1.0 million of this indebtedness, which reduced the
amount of Cox Radios guarantee to $6.6 million. In
addition, Cox Radio believes the sale of KGMZ-FM would result in
sufficient proceeds to repay the outstanding debt. As a result,
Cox Radio considers the degree of risk related to this guarantee
insignificant.

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

55



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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.

On September 25, 2002, one of Cox
Radios interest rate swap agreements with a notional
principal amount of $25 million expired. This action did
not have a material effect on Cox Radios financial
position or results of operations. Cox Radio did not enter into
any other interest rate swap agreement upon expiration of this
agreement.

Cox Radio had two remaining interest rate swap
agreements outstanding as of December 31, 2002, each of
which is used to manage its 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 counterparties to these interest rate swap agreements
are major financial institutions. Although Cox Radio is exposed
to credit loss in the event of nonperformance by these
counterparties, Cox Radio does not anticipate nonperformance by
these counterparties nor would Cox Radio expect any such loss to
be material.

Prior to June 27, 2000, Cox Radio accounted
for the interest rate swap agreements as hedges. In connection
with the offering of Class A common stock discussed in
Note 3, Cox Radio used a portion of the net proceeds from
the offering to repay all amounts then outstanding under its
bank credit facility. As the interest rate swap agreements were
no longer matched with existing debt, Cox Radio recorded a
non-cash mark-to-market unrealized gain as of June 30, 2000
of $2.2 million, which represents the fair value of the
interest rate swap agreements at that date. On August 4,
2000, Cox Radio redesignated these interest rate swap agreements
as hedges of floating rate borrowings under the new revolving
credit facilities, dated June 30, 2000, discussed in Note
9. Concurrently with the redesignation of these swaps, Cox Radio
recorded a non-cash, mark-to-market unrealized loss of
$0.6 million, which represented the difference in the fair
value of the interest rate swap agreements from June 30,
2000 to August 4, 2000.

On January 1, 2001, Cox Radio adopted 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, and SFAS No. 138, Accounting
for Certain Derivative Instruments and Certain Hedging
Activities. SFAS No. 133, as amended, requires all
derivative instruments to be measured at fair value and
recognized as either assets or liabilities. In addition, all
derivative instruments used in hedging transactions must be
designated, reassessed and documented pursuant to the provisions
of SFAS No. 133, as amended.

Under SFAS No. 133, as amended, 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
agreements is recognized as an adjustment to interest expense.

Cox Radios two interest rate swap
agreements qualify as cash flow hedges, and upon adoption of
SFAS No. 133, as amended, Cox Radio recognized a one-time
after-tax transition adjustment to reduce earnings and increase
accumulated other comprehensive loss by approximately
$0.8 million and $0.7 million, respectively. These
amounts have been presented as a cumulative effect of change in
accounting principle, net of tax, in the Consolidated Statements
of Income and Shareholders Equity for the year ended
December 31, 2001. The portion of the transition adjustment
affecting earnings relates to the previously recorded fair
values of the derivatives.

56



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the year ended December 31, 2002, there
was no ineffective portion related to the changes in fair values
of the interest rate swap agreements and there were no amounts
excluded from the measure of effectiveness. In addition, of the
$0.7 million recorded as an increase in accumulated other
comprehensive loss on January 1, 2001, approximately
$76,000, before related income tax effects of approximately
$33,000, was reclassified into earnings as interest expense
during each quarter of 2001 and during each of the first three
quarters of 2002. During the fourth quarter of 2002,
approximately $51,000, before related income tax effects of
approximately $22,000, was reclassified into earnings as
interest expense. The balance of $1.2 million recorded in
accumulated other comprehensive loss at December 31, 2002
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 twelve months ending
December 31, 2003 is approximately $0.2 million,
before related income tax effects of approximately
$0.1 million. The actual amount that will be reclassified
to future earnings over the next twelve months may vary from
this amount as a result of changes in market conditions related
to interest rates.

At December 31, 2002, interest rate swap
agreements with an aggregate $50 million notional principal
amount were outstanding at an average annual rate of 6.3%,
having an average maturity of 3.25 years. The estimated
aggregate fair value of these interest rate swap agreements,
based on current market rates, approximated a net payable of
$5.8 million and $3.0 million at December 31,
2002 and 2001, respectively. The fair value of the swap
agreements at December 31, 2002 was included in other
long-term liabilities based on maturity dates of the swaps.

11. Retirement Plans

Certain of Cox Radios 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 and
compensation rates during those years. Pension expense allocated
to Cox Radio related to the plans was $0.5 million,
$0.7 million and $0.5 million for the years ended
December 31, 2002, 2001 and 2000, respectively.

Cox Enterprises
Pension Plan

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

|                                                |                    |                        |        |              |  |        |       |          |  |   |        |        |  |   |       |       | 
|----------------------------------------------- | ------------------ | ---------------------- | ------ | ------------ |  | ------ | ----- | -------- |  | - | ------ | ------ |  | - | ----- | ----- | 
|                                                |                    |                        |        |             
|                                                |                    | December 31,           |        | December 31,
|                                                |                    | 2002                   |        | 2001        
|                                                |                    |                        |        |             
|                                                |                    | Funded                 |        | Unfunded     |  | Funded |       | Unfunded
|                                                |                    | Plans                  |        | Plans        |  | Plans  |       | Plans   
|                                                |                    |                        |        |              |  |        |       |         
|                                                |                    |                       
|                                                |                    | (Amounts in Thousands)
|Actuarial present value of benefit obligations: |                    |                        |        |              |  |        |       |          |  |   |        |        |  |   |       |      
|                                                | Vested benefits    |                        | $      | 18,314       |  |        | $     | 3,831    |  |   | $      | 15,821 |  |   | $     | 3,493 | 
|                                                | Nonvested benefits |                        |        | 3,715        |  |        |       | 683      |  |   |        | 3,527  |  |   |       | 398   | 
|                                                |                    |                        |        |              |  |        |       |          |  |   |        |        |  |   |       |      
|Accumulated benefit obligations                 |                    | $                      | 22,029 |              |  | $      | 4,514 |          |  | $ | 19,348 |        |  | $ | 3,891 |      
|                                                |                    |                        |        |              |  |        |       |          |  |   |        |        |  |   |       |      
|Projected benefit obligations                   |                    | $                      | 26,156 |              |  | $      | 5,788 |          |  | $ | 23,468 |        |  | $ | 5,369 |      
|                                                |                    |                        |        |              |  |        |       |          |  |   |        |        |  |   |       |      

57



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Assumptions used in the actuarial computations
were:

|                                            |  |              |       |      |  |  |       | 
|------------------------------------------- |  | ------------ | ----- | ---- |  |  | ----- | 
|                                            |  |             
|                                            |  | December 31,
|                                            |  |             
|                                            |  | 2002         |       | 2001
|                                            |  |              |       |     
|Discount rate                               |  |              | 6.75% |      |  |  | 7.25% | 
|Rate of increase in compensation levels     |  |              | 4.50% |      |  |  | 5.00% | 
|Expected long-term rate of return on assets |  |              | 9.00% |      |  |  | 9.00% | 

A separate defined benefit pension plan may be
established and plan assets segregated for Cox Radio. The amount
of the assets that would be segregated would have an estimated
fair value not less than the accumulated benefit obligations of
the Cox Enterprises defined benefit pension plan attributable to
Cox Radios employees as of December 31, 2002, or
$22.0 million. The assets segregated would be used to fund
payments to retirees. Cox Enterprises will make any
non-qualified supplemental pension plan payments due to Cox
Radio employees, and Cox Radio will reimburse Cox Enterprises
for any such payments.

Cox Enterprises
Postretirement Benefits

Cox Enterprises provides certain health care and
life insurance benefits to substantially all retirees of Cox
Enterprises and its subsidiaries. Postretirement expense
allocated to Cox Radio for these benefits was $0.1 million
for each of the years ended December 31, 2002, 2001 and
2000. Cox Radios actuarial present value of accumulated
postretirement benefit obligations at December 31, 2002 was
$4.1 million.

The funded status of the portion of the
retirement plan covering the employees of Cox Radio is not
determinable. The actuarial present value of benefit obligations
for the retirement plan of Cox Enterprises exceeded the fair
value of assets held in the plan at December 31, 2002.

Actuarial assumptions used to determine the
actuarial present value of benefit obligations include a
discount rate of 6.75% (7.25% in 2001) and an expected long-term
rate of return on plan assets of 9.0%. For the postretirement
welfare plan, the assumed health care cost trend rate for
retirees is 10.0% (8.5% in 2001). This rate is assumed to
decrease gradually to 5.0% by year 2008 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 2.4% and an increase in the
aggregate of the service cost and interest cost components of
the net periodic postretirement benefit cost of approximately
1.5% for 2002. 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 2.2% and a decrease in the
aggregate of the service cost and interest cost components of
the net periodic postretirement benefit cost of approximately
1.4% for 2002.

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. Under the terms
of the plan, Cox Radios contribution is determined
annually and is based upon Cox Radio attaining certain financial
performance criteria. Cox Radio makes a contribution up to 50%
of eligible employee contributions to the plan, with a maximum
employer contribution of 6% of the employees eligible
compensation. Cox Radios expense under the plan was
$2.0 million, $0.9 million and $1.5 million for
the years ended December 31, 2002, 2001 and 2000,
respectively.

Other

Certain Cox Radio employees, whose savings and
investment plan contributions are at the Internal Revenue
Service, or IRS, maximum or are restricted in order to pass the
IRS nondiscrimination test, are

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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

eligible to participate in Cox Enterprises
non-qualified savings restoration plan. Under the terms of this
plan, Cox Radio matches 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. 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 three years in the period ended
December 31, 2002, Cox Radio maintained two stock-based
compensation plans. Cox Radio accounts for stock-based
compensation using the intrinsic value method prescribed in
Accounting Principles Board (APB) Opinion No. 25, and
related Interpretations. Compensation for the Cox Radio Amended
and Restated Long-Term Incentive Plan and the Employee Stock
Purchase Plan is measured as the excess, if any, of the quoted
market price of Cox Radios stock at the date of the grant
over the exercise price. Further, the Employee Stock Purchase
Plan qualifies as a noncompensatory plan under APB Opinion
No. 25, and, as such, no compensation cost is recognized
for these awards. Specific information regarding each plan is
presented below.

Cox Radio
Employee Stock Purchase Plans

During 2001, Cox Radio adopted a third Employee
Stock Purchase Plan (the Plan), under which Cox
Radio was authorized to issue purchase rights totaling 750,000
shares of Class A common stock. The Plan has four alternate
entry dates: January 2, 2002; July 1, 2002; January 2,
2003; and July 1, 2003. Employees are eligible to
participate in the Plan as of the first entry date on which they
are employed and are regularly scheduled to work at least 20
hours per week. Under the terms of this Plan, the purchase price
is the lower 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
December 31, 2003, the end of the Plan. The initial
purchase price was set at $18.59, $24.96 and $21.18 for the
first, second and third entry dates, respectively. Purchase
rights totaling 271,121 shares, 11,540 shares and 6,089 shares
of Class A common stock were issued under the Plan with
respect to the first, second and third entry dates,
respectively. Employees are allowed to purchase the shares via
payroll deduction through December 31, 2003, at which time
the shares will be issued. The weighted-average fair value of
each purchase right granted was $8.91, $8.14 and $6.01 for the
first, second and third enrollment dates, respectively. During
2002 and 2001, 2,480 shares and 0 shares, respectively, were
issued under the Plan due to cancellation of employees
participation or termination of employment. The fair value of
the employees purchase rights granted in 2002 and 2001 was
determined using the Black-Scholes model using assumptions
reflected in Note 2.

During 1999, Cox Radio adopted an Employee Stock
Purchase Plan, under which Cox Radio was authorized to issue
purchase rights totaling 750,000 shares of Class A common
stock to substantially all employees who were employed on
February 1, 1999 and who worked at least 20 hours per week.
Pursuant to this plan, Cox Radio issued purchase rights totaling
229,293 shares of Class A common stock. Under the terms of
this plan, the purchase price ($16.05 per share) was 85% of the
average market value during the ten trading days ended on
August 2, 1999. Employees were allowed to purchase the
shares via payroll deductions through October 31, 2001, at
which time the shares were issued to the employees. During 2001,
2000 and 1999, 15,717, 5,229 and 0 shares, respectively, were
issued to employees under the plan due to cancellation of
employees participation in the plan or termination of
employment. Upon conclusion of the 1999 plan on October 31,
2001, 172,187 shares of Class A common stock were issued to
the remaining plan participants. The grant date fair value of
each purchase right granted in 1999 was $6.29. The fair value of
the employees purchase rights granted in 1999 was
estimated using the Black-Scholes model using assumptions
reflected in Note 2.

59



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Cox Radio
Amended and Restated Long-Term Incentive Plan

Pursuant to the Amended and Restated Long-Term
Incentive Plan (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 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 this plan.

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 100% of his
or her base salary as of the beginning of the year of the
performance award payment.

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 Cox Radio
Class A common stock exceeds the exercise price by 140% for
ten consecutive trading days. Because the exercise price of
stock options awarded during 2002, 2001 and 2000 equaled or
exceeded the then current market price of Cox Radio Class A
common stock, no compensation cost has been recognized for these
options. The fair value of the options granted during 2002, 2001
and 2000 is estimated on the date of grant using the
Black-Scholes model using assumptions reflected in Note 2.

A summary of the status of Cox Radios stock
options granted under the Long-Term Incentive Plan as of
December 31, 2002, 2001 and 2000 and changes during the
years ending on those dates is presented below:

|                                                                   |  |        |           |                |  |        |       |                |  |        |           |                |  |   |       |  |  |   |           |   |  |   |       | 
|------------------------------------------------------------------ |  | ------ | --------- | -------------- |  | ------ | ----- | -------------- |  | ------ | --------- | -------------- |  | - | ----- |  |  | - | --------- | - |  | - | ----- | 
|                                                                   |  |        |           |                |  |       
|                                                                   |  | 2002   |           | 2001           |  | 2000  
|                                                                   |  |        |           |                |  |       
|                                                                   |  |        |           | Weighted       |  |        |       | Weighted       |  |        |           | Weighted      
|                                                                   |  |        |           | Average        |  |        |       | Average        |  |        |           | Average       
|                                                                   |  | Shares |           | Exercise Price |  | Shares |       | Exercise Price |  | Shares |           | Exercise Price
|                                                                   |  |        |           |                |  |        |       |                |  |        |           |               
|Outstanding at beginning of year                                   |  |        | 3,023,884 |                |  | $      | 20.62 |                |  |        | 2,293,768 |                |  | $ | 18.35 |  |  |   | 1,668,231 |   |  | $ | 10.04 | 
|Granted                                                            |  |        | 1,660,509 |                |  |        | 24.66 |                |  |        | 1,342,943 |                |  |   | 21.84 |  |  |   | 970,374   |   |  |   | 31.66 | 
|Exercised                                                          |  |        | (298,106  | )              |  |        | 11.10 |                |  |        | (384,767  | )              |  |   | 8.26  |  |  |   | (256,892  | ) |  |   | 10.08 | 
|Forfeited                                                          |  |        | (177,663  | )              |  |        | 24.63 |                |  |        | (228,060  | )              |  |   | 25.84 |  |  |   | (87,945   | ) |  |   | 31.54 | 
|                                                                   |  |        |           |                |  |        |       |                |  |        |           |                |  |   |       |  |  |   |           |   |  |   |       | 
|Outstanding at end of year                                         |  |        | 4,208,624 |                |  | $      | 22.72 |                |  |        | 3,023,884 |                |  | $ | 20.62 |  |  |   | 2,293,768 |   |  | $ | 18.35 | 
|                                                                   |  |        |           |                |  |        |       |                |  |        |           |                |  |   |       |  |  |   |           |   |  |   |       | 
|Options exercisable at year-end                                    |  |        | 730,447   |                |  | $      | 10.60 |                |  |        | 1,026,032 |                |  | $ | 10.69 |  |  |   | 1,410,739 |   |  | $ | 10.03 | 
|Weighted-average fair value of options granted
    during the year |  | $      | 12.38     |                |  |        |       |                |  | $      | 10.33     |                |  |   |       |  |  | $ | 14.16     |   |  |   |       | 

60



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table summarizes information about
stock options outstanding at December 31, 2002:

|                |                 |  |  |                     |  |                     |           |                  |  |             |           |                  |  |   |       |  |  |  |         |  |  |   |       | 
|--------------- | --------------- |  |  | ------------------- |  | ------------------- | --------- | ---------------- |  | ----------- | --------- | ---------------- |  | - | ----- |  |  |  | ------- |  |  | - | ----- | 
|                |                 |  |  |                     |  |                    
|                |                 |  |  | Options Outstanding |  | Options Exercisable
|                |                 |  |  |                    
|                |                 |  |  |                    
|                |                 |  |  |                     |  | Weighted-Average    |           |                  |  | Number of   |           |                 
|Range of        |                 |  |  | Number of Options   |  | Remaining           |           | Weighted-Average |  | Options     |           | Weighted-Average
|Exercise Prices |                 |  |  | Outstanding         |  | Contractual Life    |           | Exercise Price   |  | Exercisable |           | Exercise Price  
|                |                 |  |  |                     |  |                     |           |                  |  |             |           |                 
|                | $ 6.17    8.46 |  |  |                     |  |                     | 326,274   |                  |  |             | 3.9 years |                  |  | $ | 6.56  |  |  |  | 326,274 |  |  | $ | 6.56  | 
|                | $13.39  21.81  |  |  |                     |  |                     | 1,514,518 |                  |  |             | 7.0 years |                  |  |   | 19.68 |  |  |  | 401,278 |  |  |   | 13.77 | 
|                | $22.51  25.53  |  |  |                     |  |                     | 1,609,048 |                  |  |             | 9.0 years |                  |  |   | 24.64 |  |  |  | 1,800   |  |  |   | 24.66 | 
|                | $31.66          |  |  |                     |  |                     | 758,784   |                  |  |             | 7.0 years |                  |  |   | 31.66 |  |  |  | 1,095   |  |  |   | 31.66 | 
|                |                 |  |  |                     |  |                     |           |                  |  |             |           |                  |  |   |       |  |  |  |         |  |  |   |       | 
|                |                 |  |  |                     |  |                     | 4,208,624 |                  |  |             | 7.5 years |                  |  | $ | 22.72 |  |  |  | 730,447 |  |  | $ | 10.60 | 
|                |                 |  |  |                     |  |                     |           |                  |  |             |           |                  |  |   |       |  |  |  |         |  |  |   |       | 

13. Transactions with Affiliated
Companies

Cox Radio receives certain services from, and has
entered into certain transactions with, Cox Enterprises. Costs
of the services that are allocated to Cox Radio are based on
actual direct costs incurred or on Cox Enterprises
estimate of expenses relative to the services provided to other
subsidiaries of Cox Enterprises. Cox Radio believes that these
allocations were made on a reasonable basis, and that receiving
these 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.

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 $3.8 million and
$4.8 million existed at December 31, 2002 and 2001,
respectively, as a result of Cox Radios checks
outstanding. The amounts due (to) from Cox Enterprises
represent the net balance of the intercompany transactions and
are generally due on demand. Outstanding amounts due from Cox
Enterprises bear interest equal to Cox Enterprises current
commercial paper borrowing rate and outstanding amounts due to
Cox Enterprises bear interest at 40 basis points above Cox
Enterprises current commercial paper borrowing rate.
During 2002, Cox Enterprises weighted average commercial
paper rates ranged from 1.6% to 2.3%. The amounts due from Cox
Enterprises totaled $3.1 million and $1.1 million as of
December 31, 2002 and 2001, respectively.

Cox Radio receives certain management services
from Cox Enterprises and Cox Enterprises wholly-owned
subsidiary, Cox Broadcasting. These services include 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 Operations. Cox Radio was allocated expenses for
the years ended December 31, 2002, 2001 and 2000 of
approximately $3.3 million, $3.1 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. 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, an insurance company
indirectly

61



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

owned by descendants of Governor James M.
Cox, the founder of Cox Enterprises, including James C.
Kennedy, Chairman of Coxs Board of Directors, and his
sister, who each own 25%. This insurance company is an insurer
and reinsurer 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
$0.3 million for the years ended December 31, 2002,
2001 and 2000.

Cox Radios employees participate in certain
Cox Enterprises employee benefit plans, and Cox Radio made
payments to Cox Enterprises in 2002 for the costs incurred by
reason of such participation, including self-insured employee
medical insurance costs of approximately $6.8 million,
retiree medical payments of approximately $0.1 million and
executive pension plan payments of approximately
$0.7 million. Costs incurred for these items in 2001 and
2000 were self-insured employee medical insurance costs of
approximately $5.5 million and $4.0 million,
respectively, retiree medical payments of approximately
$0.1 million and $0.1 million, respectively, and
executive pension plan payments of approximately
$0.9 million and $0.7 million, respectively.

Cox Radio pays rent and certain other occupancy
costs for space in Cox Enterprises corporate headquarters
building. Rent and occupancy expense is allocated based on
occupied space. During 2002, Cox Enterprises, Cox Radio and
certain other affiliates of Cox Enterprises moved to a new
headquarters building. Related rent and occupancy expense was
approximately $0.3 million for the year ended
December 31, 2002 compared to $0.1 million for each of
the years ended December 31, 2001 and 2000. This new
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 Enterprise, with an
indirect 36% interest held in the aggregate by the children of
James C. Kennedy, Chairman of Coxs Board of Directors and
an indirect less than 3% interest held in the aggregate by Mr.
Kennedy, his mother and his sister.

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

|                                                             |                                                          |                        |         |          |  
|------------------------------------------------------------ | -------------------------------------------------------- | ---------------------- | ------- | -------- | -
|                                                             |                                                          | (Amounts in Thousands)
|                                                             |                                                          |                       
|Intercompany due to Cox Enterprises,
    December 31, 1999   |                                                          | $                      | (17,138 | )       
|                                                             | Cash transferred to Cox Enterprises                      |                        |         | 284,308  |  
|                                                             | Acquisitions                                             |                        |         | (814,865 | )
|                                                             | Borrowings on revolver                                   |                        |         | 334,686  |  
|                                                             | Net proceeds from issuance of Class A common
    stock   |                        |         | 344,199  |  
|                                                             | Net operating expense allocations and
    reimbursements |                        |         | (113,922 | )
|                                                             |                                                          |                        |         |         
|Intercompany due from Cox Enterprises,
    December 31, 2000 |                                                          |                        | 17,268  |         
|                                                             |                                                          |                        |         |         
|                                                             | Cash transferred to Cox Enterprises                      |                        |         | 305,523  |  
|                                                             | Acquisitions                                             |                        |         | (50,216  | )
|                                                             | Payments on revolver                                     |                        |         | (300,000 | )
|                                                             | Net proceeds from issuance of senior notes               |                        |         | 249,667  |  
|                                                             | Net operating expense allocations and
    reimbursements |                        |         | (221,158 | )
|                                                             |                                                          |                        |         |         
|Intercompany due from Cox Enterprises,
    December 31, 2001 |                                                          |                        | 1,084   |         
|                                                             |                                                          |                        |         |         
|                                                             | Cash transferred to Cox Enterprises                      |                        |         | 318,777  |  
|                                                             | Acquisitions                                             |                        |         | (484     | )
|                                                             | Payments on revolver                                     |                        |         | (89,848  | )
|                                                             | Net operating expense allocations and
    reimbursements |                        |         | (226,470 | )
|                                                             |                                                          |                        |         |         
|Intercompany due from Cox Enterprises,
    December 31, 2002 |                                                          | $                      | 3,059   |         
|                                                             |                                                          |                        |         |         

62



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COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

Cox Radio has entered into lease agreements with
Cox Broadcasting with respect to studio and tower site
properties in Atlanta and Dayton that are used for radio
operations in those markets. The annual rental cost in the
aggregate was approximately $0.6 million for each of the
years ended December 31, 2002, 2001 and 2000.

In July 2000, Cox Radio entered into a
cross-promotion agreement with Cox Interactive Media (CIM), a
wholly owned subsidiary of Cox Enterprises. Cox Radio agreed to
provide radio and Internet advertising to CIM over a three-year
period in common markets, and CIM agreed to provide Internet
advertising on its city web sites in those markets. In 2002, CIM
ceased operating web sites in the markets covered by the cross
promotion agreement, and consequently the parties mutually
agreed to cease cross promotion. Cox Radio recognized both
income and expense related to the agreement of approximately
$1.0 million, $1.6 million and $0.8 million in
2002, 2001 and 2000, respectively.

14. Supplemental Cash Flow
Information

|                                  |                            |                        |   |        |  |      |   |        |  |  |   |        | 
|--------------------------------- | -------------------------- | ---------------------- | - | ------ |  | ---- | - | ------ |  |  | - | ------ | 
|                                  |                            | 2002                   |   | 2001   |  | 2000
|                                  |                            |                        |   |        |  |     
|                                  |                            |                       
|                                  |                            | (Amounts in Thousands)
|Additional cash flow information: |                            |                        |   |        |  |      |   |        |  |  |   |       
|                                  | Cash paid for interest     |                        | $ | 39,808 |  |      | $ | 46,383 |  |  | $ | 34,021 | 
|                                  | Cash paid for income taxes |                        | $ | 8,673  |  |      | $ | 696    |  |  | $ | 22,835 | 

15. Contingencies

In October 1999, the Radio Music License
Committee, of which Cox Radio is a participant, filed a motion
in the New York courts against Broadcast Music, Inc. to commence
a rate-making proceeding on behalf of the radio industry and to
seek a determination of fair and reasonable industry-wide
license fees for the broadcast of music. Cox Radio is currently
operating under interim license agreements for the period
commencing January 1, 1997 at the rates and terms set forth
in prior agreements. In September 2002, the rate court
proceeding between the Radio Music License Committee and
Broadcast Music, Inc. was adjourned, as the parties are engaged
in settlement discussions. The outcome of this matter cannot be
predicted at this time.

On October 11, 2000, Cox Radio and its
controlling shareholder, Cox Broadcasting, Inc., were sued in
Georgia federal court by broadcast station broker, Force
Communications, for alleged breach of contract and other
theories involving a failure to pay the broker a commission
allegedly due on two transactions. The suit sought contract
damages in excess of $5 million plus interest, costs,
expenses and attorneys fees. Following completion of
discovery, the parties filed cross-motions for summary judgment
and on July 1, 2002, the court granted defendants
motion for summary judgment and denied Force
Communications cross-motion for partial summary judgment.
On July 5, 2002, the court entered judgment in favor of Cox
Radio and Cox Broadcasting, Inc. on all counts. On July 31,
2002, Force Communications filed a notice of appeal to the
United States Court of Appeals for the 11th Circuit from the
order entering summary judgment in favor of Cox Radio and Cox
Broadcasting, Inc. and from the entry of judgment. Force
Communications, Cox Radio and Cox Broadcasting, Inc. agreed on
January 23, 2003 to resolve this matter through binding
arbitration. Pursuant to that agreement, the arbitrator will
issue an award that may range from a low of $600,000 to a high
of $1.6 million, and following payment of such arbitration
award, the 11th Circuit appeal will be dismissed with prejudice.
The outcome of this matter cannot be predicted at this time.

63



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

On June 13, 2001, Cox Radio was named as
defendant in a putative class action suit filed in an amended
complaint in the state court in Fulton County, Georgia, alleging
violations of the Federal Telephone Consumer Protection Act. The
complaint seeks statutory damages in the amount of $1,500 plus
attorneys fees, on behalf of each person throughout
the State of Georgia who received an unsolicited
pre-recorded telephone message delivering an
advertisement from a Cox Radio radio station. The
parties have entered into agreements, approved by the court,
staying all proceedings while awaiting a ruling by the Georgia
Court of Appeals in a similar action pending against a
third-party radio broadcast company. The Georgia Court of
Appeals vacated and remanded the third-party case March
14, 2003 with instructions to the trial court to consider
constitutional issues. At the present time, Cox Radio cannot
reasonably estimate the possible loss or range of loss with
respect to this lawsuit. Cox Radio intends to defend this action
vigorously. The outcome of this matter cannot be predicted at
this time.

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

16. 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                                           |         | 2nd     |  | 3rd     |         | 4th    
|                                                                                        |  | Quarter                                       |         | Quarter |  | Quarter |         | Quarter
|                                                                                        |  |                                               |         |         |  |         |         |        
|                                                                                        |  |                                              
|                                                                                        |  | (Amounts in Thousands, Except Per Share Data)
|2002                                                                                    |  |                                               |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|Net revenues                                                                            |  | $                                             | 86,030  |         |  | $       | 113,910 |         |  | $ | 112,538 |  |  | $ | 108,114 | 
|Cost of services (exclusive of depreciation shown
    separately below)                 |  |                                               | 19,866  |         |  |         | 25,092  |         |  |   | 26,079  |  |  |   | 22,115  | 
|Selling, general and administrative                                                     |  |                                               | 36,115  |         |  |         | 42,630  |         |  |   | 41,108  |  |  |   | 41,240  | 
|Corporate general and administrative expenses                                           |  |                                               | 4,101   |         |  |         | 4,365   |         |  |   | 3,711   |  |  |   | 3,312   | 
|Depreciation                                                                            |  |                                               | 3,002   |         |  |         | 3,028   |         |  |   | 3,074   |  |  |   | 2,992   | 
|Amortization                                                                            |  |                                               | 30      |         |  |         | 29      |         |  |   | 30      |  |  |   | 29      | 
|Operating income                                                                        |  |                                               | 22,408  |         |  |         | 38,797  |         |  |   | 38,926  |  |  |   | 38,200  | 
|Cumulative effect of an accounting change, net of
    tax(1)                            |  |                                               | (13,934 | )       |  |         |        |         |  |   |        |  |  |   |        | 
|                                                                                        |  |                                               |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|Net (loss) income                                                                       |  | $                                             | (6,614  | )       |  | $       | 17,478  |         |  | $ | 17,814  |  |  | $ | 17,263  | 
|                                                                                        |  |                                               |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|Net income per common share before cumulative
    effect of accounting change  basic   |  | $                                             | 0.07    |         |  | $       | 0.17    |         |  | $ | 0.18    |  |  | $ | 0.17    | 
|Cumulative effect of an accounting change(1)                                            |  |                                               | (0.14   | )       |  |         |        |         |  |   |        |  |  |   |        | 
|                                                                                        |  |                                               |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|Net (loss) income per common
    share  basic                                          |  | $                                             | (0.07   | )       |  | $       | 0.17    |         |  | $ | 0.18    |  |  | $ | 0.17    | 
|                                                                                        |  |                                               |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|Net income per common share before cumulative
    effect of accounting change  diluted |  | $                                             | 0.07    |         |  | $       | 0.17    |         |  | $ | 0.18    |  |  | $ | 0.17    | 
|Cumulative effect of an accounting change(1)                                            |  |                                               | (0.14   | )       |  |         |        |         |  |   |        |  |  |   |        | 
|                                                                                        |  |                                               |         |         |  |         |         |         |  |   |         |  |  |   |         | 
|Net (loss) income per common
    share  diluted                                        |  | $                                             | (0.07   | )       |  | $       | 0.17    |         |  | $ | 0.18    |  |  | $ | 0.17    | 
|                                                                                        |  |                                               |         |         |  |         |         |         |  |   |         |  |  |   |         | 

64



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##### Table of Contents



COX RADIO, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                                                                               |  |                                               |          |         |  |         |         |         |  |   |        |  |  |   |          |  
|---------------------------------------------------------------------------------------------- |  | --------------------------------------------- | -------- | ------- |  | ------- | ------- | ------- |  | - | ------ |  |  | - | -------- | -
|                                                                                               |  | 1st                                           |          | 2nd     |  | 3rd     |         | 4th    
|                                                                                               |  | Quarter                                       |          | Quarter |  | Quarter |         | Quarter
|                                                                                               |  |                                               |          |         |  |         |         |        
|                                                                                               |  |                                              
|                                                                                               |  | (Amounts in Thousands, Except Per Share Data)
|2001                                                                                           |  |                                               |          |         |  |         |         |         |  |   |        |  |  |   |          |  
|Net revenues                                                                                   |  | $                                             | 86,525   |         |  | $       | 107,871 |         |  | $ | 99,220 |  |  | $ | 101,687  |  
|Cost of services (exclusive of depreciation shown
    separately below)                        |  |                                               | 20,234   |         |  |         | 24,127  |         |  |   | 24,916 |  |  |   | 23,135   |  
|Selling, general and administrative                                                            |  |                                               | 36,462   |         |  |         | 40,206  |         |  |   | 36,048 |  |  |   | 41,229   |  
|Corporate general and administrative expenses                                                  |  |                                               | 3,644    |         |  |         | 3,555   |         |  |   | 2,530  |  |  |   | 3,551    |  
|Depreciation                                                                                   |  |                                               | 3,076    |         |  |         | 2,657   |         |  |   | 2,746  |  |  |   | 2,913    |  
|Amortization                                                                                   |  |                                               | 14,811   |         |  |         | 14,517  |         |  |   | 14,362 |  |  |   | 14,553   |  
|Operating income                                                                               |  |                                               | 10,590(2 | )       |  |         | 22,567  |         |  |   | 18,704 |  |  |   | 16,267   |  
|Cumulative effect of an accounting change, net of
    tax(3)                                   |  |                                               | (787     | )       |  |         |        |         |  |   |       |  |  |   |         |  
|                                                                                               |  |                                               |          |         |  |         |         |         |  |   |        |  |  |   |          |  
|Net (loss) income                                                                              |  | $                                             | (2,144   | )       |  | $       | 5,671   |         |  | $ | 3,563  |  |  | $ | 13,601(4 | )
|                                                                                               |  |                                               |          |         |  |         |         |         |  |   |        |  |  |   |          |  
|Net (loss) income per common share before
    cumulative effect of accounting change  basic   |  | $                                             | (0.01    | )       |  | $       | 0.06    |         |  | $ | 0.04   |  |  | $ | 0.14     |  
|Cumulative effect of an accounting change(3)                                                   |  |                                               | (0.01    | )       |  |         |        |         |  |   |       |  |  |   |         |  
|                                                                                               |  |                                               |          |         |  |         |         |         |  |   |        |  |  |   |          |  
|Net (loss) income per common
    share  basic                                                 |  | $                                             | (0.02    | )       |  | $       | 0.06    |         |  | $ | 0.04   |  |  | $ | 0.14     |  
|                                                                                               |  |                                               |          |         |  |         |         |         |  |   |        |  |  |   |          |  
|Net (loss) income per common share before
    cumulative effect of accounting change  diluted |  | $                                             | (0.01    | )       |  | $       | 0.06    |         |  | $ | 0.04   |  |  | $ | 0.14     |  
|Cumulative effect of an accounting change(3)                                                   |  |                                               | (0.01    | )       |  |         |        |         |  |   |       |  |  |   |         |  
|                                                                                               |  |                                               |          |         |  |         |         |         |  |   |        |  |  |   |          |  
|Net (loss) income per common
    share  diluted                                               |  | $                                             | (0.02    | )       |  | $       | 0.06    |         |  | $ | 0.04   |  |  | $ | 0.14     |  
|                                                                                               |  |                                               |          |         |  |         |         |         |  |   |        |  |  |   |          |  






|    |                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents a $13.9 million ($0.14 per
    diluted share) after-tax loss related to the cumulative effect
    of accounting change as a result of adopting SFAS No. 142.                                                                       
|(2) | Includes a pre-tax gain on the sale of WHOO-AM in
    Orlando, Florida of approximately $2.4 million.                                                                                                                                         
|(3) | Represents a $0.8 million ($0.01 per diluted
    share) after-tax loss related to the cumulative effect of
    accounting change as a result of adopting SFAS No. 133,
    Accounting for Derivative Instruments and Hedging
    Activities.
|(4) | Includes a $10.9 million deferred tax
    benefit related to a revision of Cox Radios effective
    state income tax rate.                                                                                                                   

65



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##### Table of Contents








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

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 2003 Annual Meeting of Shareholders.






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

The information required by this Item is
incorporated by reference to Cox Radios Proxy Statement
for the 2003 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 2003 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 2003 Annual Meeting of Shareholders.






|          |                        
|--------- | -----------------------
|ITEM  14. | 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 a date within 90 days prior
to the date of the filing of this report, 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.

There were no significant changes in Cox
Radios internal controls or in other factors that could
significantly affect these controls subsequent to the date of
such evaluation.

Cox Radios management, including the Chief
Executive Officer and Chief Financial Officer, do not expect
that our disclosure controls and procedures or our internal
controls will prevent all error and all fraud. A control system,
no matter how well conceived and operated, provides reasonable
assurance that the objectives of the control system are met. The
design of a control system reflects resource constraints; the
benefits of controls must be considered relative to their costs.
Because there are inherent limitations in all control systems,
no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within the
company have been or will be detected. These inherent
limitations include the realities that judgments in
decision-making can be faulty and that breakdowns occur because
of simple error or mistake. Controls can be circumvented by the
individual acts of some persons, by collusion of two or more
people, or by management override of the control. The design of
any system of controls is based in part upon certain assumptions
about the likelihood of future events. There can be no assurance
that any design will succeed in achieving its stated goals under
all future conditions; over time, controls may become inadequate
because of changes in conditions or deterioration in the degree
of

66



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compliance with the policies or procedures.
Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.





PART IV






|          |                                                                    
|--------- | -------------------------------------------------------------------
|ITEM  15. | Exhibits, Financial Statement Schedules and
    Reports on Form 8-K

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

(1) Audited Consolidated Balance Sheets as
of December 31, 2002 and 2001 and Consolidated Statements
of Operations, Shareholders Equity and Cash Flows for each
of the three years in the period ended December 31, 2002;
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)2.1   |  |  |            |  | Merger Agreement dated as of March 14, 2000
    by and among Marlin Broadcasting, Inc., Cox Radio, Inc., Cox
    Miami Merger Sub, Inc. and Marlin Broadcasting, LLC.                                                                                                                                                                                            
|        | (2)2.2   |  |  |            |  | Asset Purchase Agreement dated as of
    March 3, 2000 by and among Clear Channel Broadcasting,
    Inc., Clear Channel Broadcasting Licenses, Inc., Citicasters
    Co., Capstar Radio Operating Company, Capstar TX Limited
    Partnership, AMFM Texas Broadcasting, L.P., AMFM Texas Licenses
    Limited Partnership, Cox Radio, Inc. and CXR Holdings, Inc.
|        | (3)2.3   |  |  |            |  | Asset Exchange Agreement dated as of May 31,
    2000 by and among Cox Radio, Inc., CXR Holdings, Inc., Salem
    Communications Corporation and South Texas Broadcasting, Inc.                                                                                                                                                                                  
|        | (4)2.4   |  |  |            |  | Letter dated May 31, 2000 by and among Cox
    Radio, Inc., CXR Holdings, Inc., Salem Communications
    Corporation and South Texas Broadcasting, Inc.                                                                                                                                                                                                          
|        | (5)2.5   |  |  |            |  | Letter dated June 7, 2000 by and among Cox
    Radio, Inc., CXR Holdings, Inc., Salem Communications
    Corporation and South Texas Broadcasting, Inc.                                                                                                                                                                                                          
|        | (6)2.6   |  |  |            |  | Stock Purchase Agreement dated as of June 7,
    2000 by and among Midwestern Broadcasting Company, Inc., the
    stockholders of Midwestern Broadcasting Company, Inc. and Cox
    Radio, Inc.                                                                                                                                                                  
|        | (7)2.7   |  |  |            |  | Asset Purchase Agreement dated as of
    November 8, 2000 by and among Cox Radio, Inc., CXR
    Holdings, Inc. and Radio One, Inc.                                                                                                                                                                                                                               
|        | (8)3.1   |  |  |            |  | Amended and Restated Certificate of Incorporation
    of Cox Radio, Inc.                                                                                                                                                                                                                                                                                         
|        | (9)3.2   |  |  |            |  | Certificate of Amendment of Certificate of
    Incorporation of Cox Radio, Inc.                                                                                                                                                                                                                                                                                  
|        | (10)3.3  |  |  |            |  | Amended and Restated Bylaws of Cox Radio, Inc.                                                                                                                                                                                                                                                                                                                   
|        | (11)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.                                                                                                                                                                                                                                           
|        | (12)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.                                                                                                                                                                                                                      
|        | (13)4.3  |  |  |            |  | Form of Specimen Class A common stock
    certificate.                                                                                                                                                                                                                                                                                                           
|        | (14)10.1 |  |  |            |  | 364-Day Credit Agreement dated as of
    June 30, 2000 among Cox Radio, Inc., the Banks party
    thereto, The Chase Manhattan Bank, as Administrative Agent, Bank
    of America, N.A., as Syndications Agent, and Citibank, N.A., as
    Documentation Agent.                                                                                                  

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|        |          |  |  |             |  |                                                                                                                                                                                                                                                                                                                                  
|------- | -------- |  |  | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |          |  |  |            
|Number  |          |  |  | Description
|        |          |  |  |            
|        | (15)10.2 |  |  |            |  | Amended and Restated 364-Day Credit Agreement
    dated as of June 29, 2001 among Cox Radio, Inc., the Banks
    party thereto, The Chase Manhattan Bank, as Administrative
    Agent, Bank of America, N.A. and Fleet National Bank, as
    Syndication Agents, and Citibank, N.A. and Mizuho Bank, as
    Documentation Agents.
|        | (16)10.3 |  |  |            |  | Amended and Restated 364-Day Credit Agreement
    dated as of June 28, 2002 among Cox Radio, Inc., the Banks
    party thereto, JPMorgan Chase Bank, as Administrative Agent, and
    Bank of America, N.A. and Wachovia Bank, National Association,
    as Syndication Agents.                                                  
|        | (17)10.4 |  |  |            |  | Five-Year Credit Agreement dated as of
    June 30, 2000 among Cox Radio, Inc., the Banks referred to
    therein, The Chase Manhattan Bank, as Administrative Agent, Bank
    of America, N.A., as Syndications Agent, and Citibank, N.A., as
    Documentation Agent.                                                          
|        | (18)10.5 |  |  |            |  | First Amendment dated as of June 29, 2001 to
    the Five-Year Credit Agreement dated as of June 30, 2000
    among Cox Radio, Inc., the Banks party thereto, The Chase
    Manhattan Bank, as Administrative Agent, Bank of America, N.A.,
    as Syndications Agent, and Citibank, N.A., as Documentation
    Agent.           
|        | (19)10.6 |  |  |            |  | Second Amendment dated as of December 17,
    2001 to the Five-Year Credit Agreement dated as of June 30,
    2000 among Cox Radio, Inc., the Banks party thereto, JP Morgan
    Chase Bank, as Administrative Agent, Bank of America, N.A., as
    Syndications Agent, and Citibank, N.A., as Documentation Agent.              
|        | (20)10.7 |  |  |            |  | Cox Radio, Inc. Amended and Restated Long-Term
    Incentive Plan.                                                                                                                                                                                                                                                               
|        | (21)10.8 |  |  |            |  | Cox Radio, Inc. Restricted Stock Plan for
    Non-Employee Directors.                                                                                                                                                                                                                                                            
|        | 13       |  |  |            |  | Portions of the 2002 Annual Report to
    Shareholders (expressly incorporated by reference in Part II,
    Item 5 of this report).                                                                                                                                                                                              
|        | 21       |  |  |            |  | Subsidiaries of Cox Radio, Inc.                                                                                                                                                                                                                                                                                                  
|        | 23.1     |  |  |            |  | Consent of Deloitte & Touche LLP.                                                                                                                                                                                                                                                                                                
|        | 24.1     |  |  |            |  | Power of Attorney (included on page 70).                                                                                                                                                                                                                                                                                         
|        | 99.1     |  |  |            |  | Certification of Chief Executive Officer Pursuant
    to 18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                       
|        | 99.2     |  |  |            |  | Certification of Chief Financial Officer Pursuant
    to 18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                       






| |     |                                                                                                                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------
| | (1) | Incorporated by reference to Exhibit 2.2 of
    Cox Radios Report on Form 8-K dated April 19, 2000.                               
| | (2) | Incorporated by reference to Exhibit 2.3 of
    Cox Radios Report on Form 8-K dated April 19, 2000.                               
| | (3) | Incorporated by reference to Exhibit 10.5 of
    Cox Radios Report on Form 10-Q for the period ended
    June 30, 2000.           
| | (4) | Incorporated by reference to Exhibit 10.6 of
    Cox Radios Report on Form 10-Q for the period ended
    June 30, 2000.           
| | (5) | Incorporated by reference to Exhibit 10.7 of
    Cox Radios Report on Form 10-Q for the period ended
    June 30, 2000.           
| | (6) | Incorporated by reference to Exhibit 10.8 of
    Cox Radios Report on Form 10-Q for the period ended
    June 30, 2000.           
| | (7) | Incorporated by reference to Exhibit 2.9 of
    Cox Radios Report on Form 10-Q for the period ended
    September 30, 2000.       
| | (8) | Incorporated by reference to Exhibit 3.1 of
    Cox Radios Registration Statement on Form S-1
    (Commission File No. 333-08737).
| | (9) | Incorporated by reference to Exhibit 3.2 of
    Cox Radios Form 8-A12B/A filed on February 15,
    2002.                          

|     |                                                                                                                                    
|---- | -----------------------------------------------------------------------------------------------------------------------------------
|(10) | Incorporated by reference to Exhibit 3.2 of
    Cox Radios Registration Statement on Form S-1
    (Commission File No. 333-08737).

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|     |                                                                                                                                                                                     
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(11) | Incorporated by reference to Exhibit 4.4 of
    Cox Radios Report on Form 10-Q for the period ended
    June 30, 1998.                                                             
|(12) | Incorporated by reference to Exhibit 4.2 of
    Cox Radios Report on Form 10-Q for the period ended
    March 31, 1999                                                             
|(13) | Incorporated by reference to Exhibit 4.1 of
    Cox Radios Report on Form 8-A12B/A dated February 15,
    2002.                                                                    
|(14) | Incorporated by reference to Exhibit 10.9 of
    Cox Radios Report on Form 10-Q for the period ended
    June 30, 2000.                                                            
|(15) | Incorporated by reference to Exhibit 10.2 of
    Cox Radios Report on Form 10-Q for the period ended
    June 30, 2001.                                                            
|(16) | Incorporated by reference to Exhibit 10.1 of
    Cox Radios Report on Form 10-Q for the period ended
    June 30, 2002.                                                            
|(17) | Incorporated by reference to Exhibit 10.10
    of Cox Radios Report on Form 10-Q for the period ended
    June 30, 2000.                                                           
|(18) | Incorporated by reference to Exhibit 10.3 of
    Cox Radios Report on Form 10-Q for the period ended
    June 30, 2001.                                                            
|(19) | Incorporated by reference to Exhibit 10.5 of
    Cox Radios Report on Form 10-K for the period ended
    December 31, 2001.                                                        
|(20) | Incorporated by reference to Appendix B of
    Cox Radios Definitive Proxy Statement on Schedule 14A
    dated March 29, 2001 (management contract or compensation
    plan).      
|(21) | Incorporated by reference to Exhibit 10.11
    of Cox Radios Registration Statement on Form S-1
    (Commission File No. 333-08737) (management contract or
    compensation plan).

(b) Reports on Form 8-K

On December 20, 2002, Cox Radio filed a
Current Report on Form 8-K announcing that effective
December 31, 2002, David Easterly retired from Cox
Radios Board of Directors, reducing the number of
directors to eight.

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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. NEIL

| |                                          
| | -----------------------------------------
| |                                          
| | Robert F. Neil                           
| | President and Chief Executive
    Officer

Date: March 31, 2003

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
|                                             |  |                                                                                                               |  |     
|                                            
|/s/ JAMES C. KENNEDYJames C. Kennedy         |  | Chairman of the Board of Directors                                                                            |  |      | March 31, 2003 | 
|                                            
|                                            
|/s/ ROBERT F. NEILRobert F. Neil             |  | President and Chief Executive Officer; Director
    (principal executive officer)                             |  |      | March 31, 2003 | 
|                                            
|                                            
|/s/ NEIL O. JOHNSTONNeil O. Johnston         |  | Vice-President and Chief Financial Officer
    (principal accounting officer and principal financial officer) |  |      | March 31, 2003 | 
|                                            
|/s/ ERNEST D. FEARS, JR.Ernest D. Fears, Jr. |  | Director                                                                                                      |  |      | March 31, 2003 | 
|                                            
|/s/ PAUL M. HUGHESPaul M. Hughes             |  | Director                                                                                                      |  |      | March 31, 2003 | 

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|                                           |  |          |  |      |                |  |  | 
|------------------------------------------ |  | -------- |  | ---- | -------------- |  |  | 
|                                           |  |          |  |     
|Signature                                  |  | Title    |  | Date
|                                           |  |          |  |     
|                                          
|/s/ MARC W. MORGANMarc W. Morgan           |  | Director |  |      | March 31, 2003 | 
|                                          
|/s/ RICHARD A. FERGUSONRichard A. Ferguson |  | Director |  |      | March 31, 2003 | 
|                                          
|/s/ NICHOLAS D. TRIGONYNicholas D. Trigony |  | Director |  |      | March 31, 2003 | 
|                                          
|/s/ G. DENNIS BERRYG. Dennis Berry         |  | Director |  |      | March 31, 2003 | 

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CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14 OF THE

SECURITIES EXCHANGE ACT OF 1934


I, Robert F. Neil, Chief Executive Officer of Cox
Radio, Inc., certify that:

1. I have reviewed this annual report on
Form 10-K of Cox Radio, Inc.;

2. Based on my knowledge, this annual report
does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this
annual report;

3. Based on my knowledge, the financial
statements, and other financial information included in this
annual report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual
report;

4. The registrants other certifying
officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:



| |                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this annual report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this annual report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                

5. The registrants other certifying
officers and I have disclosed, based on our most recent
evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons
performing the equivalent functions):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrants ability to record, process,
    summarize and report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    

6. The registrants other certifying
officers and I have indicated in this annual report whether
there were significant changes in internal controls or in other
factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies
and material weaknesses.



|                        | 
|----------------------- | 
|/s/ ROBERT F. NEIL      | 
|                        | 
|Robert F. Neil          | 
|Chief Executive Officer | 

Date: March 31, 2003

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##### Table of Contents



CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14 OF THE

SECURITIES EXCHANGE ACT OF 1934


I, Neil O. Johnston, Chief Financial Officer of
Cox Radio, Inc., certify that:

1. I have reviewed this annual report on
Form 10-K of Cox Radio, Inc.;

2. Based on my knowledge, this annual report
does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this
annual report;

3. Based on my knowledge, the financial
statements, and other financial information included in this
annual report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual
report;

4. The registrants other certifying
officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:



| |                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this annual report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this annual report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                

5. The registrants other certifying
officers and I have disclosed, based on our most recent
evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons
performing the equivalent functions):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrants ability to record, process,
    summarize and report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    

6. The registrants other certifying
officers and I have indicated in this annual report whether
there were significant changes in internal controls or in other
factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies
and material weaknesses.



|                        | 
|----------------------- | 
|/s/ NEIL O. JOHNSTON    | 
|                        | 
|Neil O. Johnston        | 
|Chief Financial Officer | 

Date: March 31, 2003

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##### Table of Contents






SCHEDULE II

COX RADIO, INC.

VALUATION AND QUALIFYING ACCOUNTS

Allowance for Doubtful Accounts

|                       |  |               |       |             |  |            |   |            |  |               |       |  |  |   |       |  |  |   |       | 
|---------------------- |  | ------------- | ----- | ----------- |  | ---------- | - | ---------- |  | ------------- | ----- |  |  | - | ----- |  |  | - | ----- | 
|For the Fiscal         |  | Balance As of |       | Assumed in  |  | Charges to |   |            |  | Balance As of
|Years Ended            |  | Beginning     |       | Business    |  | Costs and  |   |            |  | End of       
|December 31            |  | of Period     |       | Combination |  | Expenses   |   | Deductions |  | Period       
|                       |  |               |       |             |  |            |   |            |  |              
|                      
|(Amounts in thousands)
|2002                   |  | $             | 4,536 |             |  | $          |  |            |  | $             | 4,590 |  |  | $ | 4,335 |  |  | $ | 4,791 | 
|2001                   |  | $             | 3,477 |             |  | $          |  |            |  | $             | 5,217 |  |  | $ | 4,158 |  |  | $ | 4,536 | 
|2000                   |  | $             | 2,966 |             |  | $          |  |            |  | $             | 3,297 |  |  | $ | 2,786 |  |  | $ | 3,477 | 

74