##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2008o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from          to
 Commission file number 333-143558
 CMP Susquehanna Radio Holdings Corp.
  Delaware(State of Incorporation)
    
    36-4159663(I.R.S. Employer Identification No.)
 3280 Peachtree Road N.W.
Suite 2300
Atlanta, GA 30305
(404) 949-0700  (Address, including zip code, and telephone number, including area code, of registrants principal offices)
 Securities Registered Pursuant to Section 12(b) of the Act:
 Securities Registered Pursuant to Section 12(g) of the Act:
  o þ
 þ o
 þ o
 o þ
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller Reporting Company o(Do not check if a smaller reporting company)
 o þ




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##### 



CMP SUSQUEHANNA RADIO HOLDINGS CORP.
 ANNUAL REPORT ON FORM 10-K
For the Fiscal Year Ended December 31, 2008
  
 Item
    
    
    
    PageNumber
    
    
    
    NumberIndexPART I1
    
    Business
    
    
    11A.
    
    Risk Factors
    
    
    171B.
    
    Unresolved Staff Comments
    
    
    252
    
    Properties
    
    
    253
    
    Legal Proceedings
    
    
    264
    
    Submission of Matters to a Vote of Security Holders
    
    
    26PART II5
    
    Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    266
    
    Selected Consolidated Financial Data
    
    
    267
    
    Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    287A.
    
    Quantitative and Qualitative Disclosure about Market Risk
    
    
    468
    
    Financial Statements and Supplementary Data
    
    
    479
    
    Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    479A.
    
    Controls and Procedures
    
    
    479B.
    
    Other Information
    
    
    48PART III10
    
    Directors and Executive Officers and Corporate Governance
    
    
    4811
    
    Executive Compensation
    
    
    4912
    
    Security Ownership of Certain Beneficial Owners and Management & Related
Stockholder Matters
    
    
    4913
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    5014
    
    Principal Accountant Fees and services
    
    
    53PART IV15
    
    Exhibits and Financial Statement Schedules
    
    
    54Signatures
    
    
    56EX-21.1EX-23.1EX-23.2EX-23.3EX-31.1EX-31.2EX-32.1




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##### Table of Contents



PART I
 
 Item 1.
    
    Business
 Certain Definitions
     
    
    we obtained total radio industry listener and revenue levels from the Radio Advertising
Bureau (the RAB);
    
    we derived historical market revenue statistics and market revenue share percentages
from data published by Miller Kaplan, Arase & Co., LLP (Miller Kaplan), a public
accounting firm that specializes in serving the broadcasting industry and BIA Financial
Network, Inc. (BIA), a media and telecommunications advisory services firm;
    
    we derived all audience share data and audience rankings, including ranking by
population, except where otherwise stated to the contrary, from surveys of people ages 12
and over (Adults 12+), listening Monday through Sunday, 6 a.m. to 12 midnight, and based
on the Fall 2008 Arbitron Market Report, referred to as Arbitrons Market Report,
pertaining to each market; and
    
    all dollar amounts are rounded to the nearest million, unless otherwise indicated.
  1




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Company Overview
   2




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Highlights during 2008
 Economic Developments
   Liquidity Considerations
    Subsequent Events
  3




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Strategy
  
    
    Focus on Clusters in Large Markets.We believe that large markets provide an attractive
combination of scale, stability and opportunity for future growth. We have followed a
focused strategy of operating sizeable clusters of stations within our markets, and we
manage a large share of the radio advertising within each market. This market position
allows us to offer advertisers more attractive advertising packages targeted towards more
specific audiences. In addition, the ability to share human resources, information
technology, engineering, legal, marketing and other costs across cluster stations helps to
improve our Station Operating Income margins.
    
    Improve Operating Performance Using Cumuluss Best-in-Class Practices.In May 2006, our
direct parent, Holdings, entered into a management agreement with Cumulus, the second
largest radio company in the United States based on number of stations owned or operated.
Cumulus has been recognized as having one of the top management teams in the radio
industry. The Chairman and Chief Executive Officer of Cumulus, Lewis W. Dickey, Jr., is our
Chairman, President and Chief Executive Officer. Mr. Dickey was named Best Radio & TV
Broadcasting CEO by Institutional Investor (January 2005). Among the reasons identified
for this recognition were Mr. Dickeys record for reducing Cumuluss debt and improving its
free cash flow while still acquiring operationally critical assets. We believe that the
combination of best-in-class business practices from Cumuluss management team, together
with the enhanced purchasing power, scale and supplier relationships that result from the
common management of the portfolios of Cumulus and our company, helps us drive local sales
growth and operating efficiencies and improve Station Operating Income margins.
 
    
    Employ Market Research and Targeted Programming.We seek to maximize station operating
performance through market research and targeted programming. We maintain and regularly
update extensive listener databases that provide valuable insight into our listener base.
We also retain consultants and research organizations to continually evaluate listeners
preferences and use information gathered from these sources to optimize our programming and
marketing strategies. These strategies have included format changes and utilization of
customized marketing campaigns to expand our listener base. We believe these
 4




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strategies have contributed to the strong ratings and market positions of our stations. We
believe the combination of our existing local market research abilities with the scale of
Cumuluss in-house market research allows us to maximize our future station operating
performance.
    
    Continue to Build Strong Relationships with Listeners and Advertisers.We are focused
on developing and maintaining strong relationships with both our listener and advertiser
bases in our stations communities. Our stations maintain close relationships with
listeners via e-mail event notification and weekly/biweekly station newsletters made
possible by maintaining extensive listener databases. In addition, our stations host
numerous high-profile community service events, concerts and listener promotions each year.
These relationships with our listeners allow us to offer value-added marketing services to
our advertiser base, including contacting listeners via targeted marketing campaigns.
    
    Maintain Balanced Advertising Load.We closely manage our on-air inventory to maximize
revenue without jeopardizing listening levels and resulting ratings. We believe the
inventory levels maintained by our stations are lower inventory levels of our competitors.
Our stations generally respond to demand for on-air inventory by varying pricing rather
than varying target inventory levels. We believe that this strategy supports long-term
positive ratings trends and stable revenue growth.
    
    Pursue Strategic Acquisitions and Alternatives.Our portfolio development strategy has
been focused on clustering radio stations in our existing markets and making opportunistic
acquisitions in new markets in which we believe we can cost-effectively achieve a leading
position in terms of audience and revenue share. We may also pursue strategic alternatives,
such as asset swaps, to diversify or strengthen our portfolio of stations. In evaluating
potential new stations, we assess the strategic fit of the station with our existing
clusters of radio stations. When entering a new market, we would typically seek to acquire
a platform upon which to expand our portfolio of stations and build a leading cluster of
stations. We believe our ability to further develop our portfolio has been enhanced by our
association with Cumulus, which we believe has a long history of successfully identifying
and integrating acquisitions and asset swaps.
    
    Pursue Internet Initiatives.We have aggressively pursued Internet opportunities, such
as online streaming and incorporating advertisement-replacement technologies into streams.
We have achieved success with radio streaming and, as a result, all of our stations are
currently streamed over the Internet. Further, we believe San Franciscos KFOG and Dallass
The Ticket are among the most streamed stations in the country. These Internet
initiatives expand our audience reach through new distribution methods while offering
potential new revenue sources.
 Acquisitions and Dispositions
 5




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Completed Acquisitions
  Completed Dispositions
  2007
  KCHZ Trust
   Acquisition of SPC
    Industry Overview
  6




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Advertising Sales
      7




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
    
    a stations share of audiences in the demographic groups targeted by advertisers;
    
    the number of stations in the market competing for the same demographic groups;
    
    the supply of and demand for radio advertising time; and
    
    certain qualitative factors.
  Competition
    8




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Employees
   9




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Federal Regulation of Radio Broadcasting
 General.
 License Grant and Renewal.
  Service Areas.
  10




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Frequency
    
    
    
    
    
    
    
    
    
    
    Power inMarket and
    
    City of
    
    
    (FM-MHZ)
    
    
    FCC
    
    
    HAAT
    
    
    Kilowatts
    
    
    LicenseStations
    
    License
    
    
    (AM-KHZ)
    
    
    Class
    
    
    (Meters)
    
    
    (Day)
    
    
    Expiration DateAtlanta, GAWNNX  FM
    
    College Park
    
    100.5 MHz
    
    
    C2
    
    
    
    298
    
    
    
    13.0
    
    
    April 1, 2012WWWQ  FM
    
    Atlanta
    
    99.7 MHz
    
    
    C0
    
    
    
    340
    
    
    
    97.0
    
    
    April 1, 2012Cincinnati, OHWFTK  FM
    
    Lebanon
    
    96.5 MHz
    
    
    B
    
    
    
    247
    
    
    
    19.5
    
    
    October 1, 2012WGRR  FM
    
    Hamilton
    
    103.5 MHz
    
    
    B
    
    
    
    316
    
    
    
    11.0
    
    
    October 1, 2012WRRM  FM
    
    Cincinnati
    
    98.5 MHz
    
    
    B
    
    
    
    246
    
    
    
    17.5
    
    
    October 1, 2012Dallas, TXKDBN  FM
    
    Haltom City
    
    93.3 MHz
    
    
    C2
    
    
    
    120
    
    
    
    50.0
    
    
    August 1, 2013KGVL  AM
    
    Greenville
    
    1400 KHz
    
    
    C
    
    
    
    N/A
    
    
    
    1.0
    
    
    August 1, 2013KIKT  FM
    
    Greenville
    
    93.5 MHz
    
    
    A
    
    
    
    100
    
    
    
    1.8
    
    
    August 1, 2013KKLF  AM
    
    Richardson
    
    1700 KHz
    
    
    B
    
    
    
    N/A
    
    
    
    10.0
    
    
    August 1, 2013KLIF  AM
    
    Dallas
    
    570 KHz
    
    
    B
    
    
    
    N/A
    
    
    
    5.0
    
    
    August 1, 2013KPLX  FM
    
    Ft. Worth
    
    99.5 MHz
    
    
    C
    
    
    
    511
    
    
    
    100.0
    
    
    August 1, 2013KTCK  AM
    
    Dallas
    
    1310 KHz
    
    
    B
    
    
    
    N/A
    
    
    
    9.0
    
    
    August 1, 2013KTDK  FM
    
    Sanger
    
    104.1 MHz
    
    
    C3
    
    
    
    192
    
    
    
    6.2
    
    
    August 1, 2013Houston, TXKRBE  FM
    
    Houston
    
    104.1 MHz
    
    
    C
    
    
    
    585
    
    
    
    92.2
    
    
    August 1, 2013Indianapolis, INWFMS  FM
    
    Indianapolis
    
    95.5 MHz
    
    
    B
    
    
    
    302
    
    
    
    13.0
    
    
    August 1, 2012WISG  FM(1)
    
    Clifford
    
    89.9 MHz
    
    
    
    
    
    
    25
    
    
    
    0.1
    
    
    September 19, 2011WJJK  FM
    
    Noblesville
    
    104.5 MHz
    
    
    B
    
    
    
    150
    
    
    
    50.0
    
    
    August 1, 2012Kansas City, MOKCFX  FM
    
    Harrisonville
    
    101.1 MHz
    
    
    C0
    
    
    
    335
    
    
    
    97.0
    
    
    February 1, 2013KCJK  FM
    
    Garden City
    
    105.1 MHz
    
    
    C1
    
    
    
    349
    
    
    
    69.0
    
    
    February 1, 2013KCMO  AM
    
    Kansas City
    
    710 KHz
    
    
    B
    
    
    
    
    
    
    
    10.0
    
    
    February 1, 2013KCMO  FM
    
    Kansas City
    
    94.9 MHz
    
    
    C0
    
    
    
    332
    
    
    
    100.0
    
    
    February 1, 2013Louisville, KYWLCL  FM
    
    Sellersburg
    
    93.9 MHz
    
    
    A
    
    
    
    152
    
    
    
    2.7
    
    
    August 1, 2012WQKC  AM
    
    Jeffersonville
    
    1450 KHz
    
    
    C
    
    
    
    
    
    
    
    1.0
    
    
    August 1, 2012San Francisco, CAKFFG  FM
    
    Los Altos
    
    97.7 MHz
    
    
    A
    
    
    
    136
    
    
    
    3.3
    
    
    December 1, 2013KFOG  FM
    
    San Francisco
    
    104.5 MHz
    
    
    B
    
    
    
    459
    
    
    
    7.1
    
    
    December 1, 2013KNBR  AM
    
    San Francisco
    
    680 KHz
    
    
    A
    
    
    
    
    
    
    
    50.0
    
    
    December 1, 2013KSAN  FM
    
    San Mateo
    
    107.7 MHz
    
    
    B
    
    
    
    354
    
    
    
    8.9
    
    
    December 1, 2013KTCT  AM
    
    San Mateo
    
    1050 KHz
    
    
    B
    
    
    
    
    
    
    
    50.0
    
    
    December 1, 2013York, PA(2)WARM  FM
    
    York
    
    103.3 MHz
    
    
    B
    
    
    
    398
    
    
    
    6.4
    
    
    August 1, 2014WGLD  AM
    
    Red Lion
    
    1440 KHz
    
    
    D
    
    
    
    
    
    
    
    1.0
    
    
    August 1, 2014WSBA  AM
    
    York
    
    910 KHz
    
    
    B
    
    
    
    
    
    
    
    5.0
    
    
    August 1, 2014WSOX  FM
    
    Red Lion
    
    96.1 MHz
    
    
    B
    
    
    
    290
    
    
    
    13.5
    
    
    August 1, 2014
 
 (1)
    
    Under a Construction Permit(2)
    
    These stations also reach Lancaster, PA. 11




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Regulatory Approvals.
    Ownership Matters.
     12




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a Report and Order and Order on Reconsideration
 Programming and Operation.
 13




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Local Marketing Agreements.
  Joint Sales Agreements.
  New Services.
  14




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tm tm tm
 a Report and Order
  Antitrust and Market Concentration Considerations.
 15




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Directors and Executive Officers
  Name
    
    Age
    
    PositionLewis W. Dickey, Jr.
    
    
    47
    
    
    Chairman, President and Chief
Executive Officer and DirectorMartin R. Gausvik
    
    
    52
    
    
    Executive Vice President,
Treasurer and Chief Financial
OfficerJohn G. Pinch
    
    
    60
    
    
    Executive Vice President and
Co-Chief Operating OfficerJohn W. Dickey
    
    
    42
    
    
    Executive Vice President and
Co-Chief Operating OfficerDavid Tolley
    
    
    41
    
    
    Director
 Lewis W. Dickey, Jr. The Franchise 
Building Radio Brands
 Martin R. Gausvik
 John G. Pinch
 John W. Dickey
 16




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David M. Tolley
 Intellectual Property
    
 Item 1A. Risk Factors
  Risks Related to Our Business
 Our results of operations have been and could continue to be adversely affected by the downturn in
the U.S. economy or in the economies of the regions in which we operate.
    17




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We operate in a very competitive business environment.
   
    
    another radio station in the market we are to convert its programming format to a
format similar to our station or launch aggressive promotional campaigns;
    
    a new station were to adopt a competitive format; or
    
    existing competitors were to strengthen its operations.
  We face many unpredictable business risks that could have a material adverse effect on our future
operations.
  
    
    changing economic conditions, both generally and relative to the radio broadcasting
industry in particular;
    
    shifts in population, listenership, demographics or audience tastes;
    
    the level of competition from existing or future technologies for advertising
revenues including, but not limited to, other radio stations, satellite radio,
television stations, newspapers, the Internet, and other entertainment and
communications media; and
    
    changes in laws as well as changes in governmental regulations and policies and
actions of federal regulatory bodies, including the DOJ, the Federal Trade Commission
and the FCC.
  Disruptions in capital markets could restrict our ability to access further financing.
  18




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We are exposed to credit risk on our accounts receivable. This risk is heightened during periods
when economic conditions worsen.
  We are exposed to risk of counterparty performance to derivative transactions.
  A decrease in our market ratings or market share can adversely affect our revenues.
  We must respond to the rapid changes in technology, services and standards that characterize our
industry in order to remain competitive.
  
    
    audio programming by cable television systems, direct broadcast satellite systems,
internet content providers (both landline and wireless), Internet-based audio radio
services, satellite delivered digital audio radio service and other digital audio
broadcast formats;
    
    HD Radio TM digital radio, which could provide multi-channel, multi-format at
digital radio serves in the same bandwidth currently occupied by traditional AM and FM
radio services; and
    
    Low power FM radio, which could result in additional FM radio broadcast stations in
markets where we have stations.
 19




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We are dependent upon key personnel.
    In recent years, the FCC has engaged in more vigorous enforcement of its indecency rules against
the broadcast industry, which could have a material adverse effect on our business.
  Due to the effect of discontinued operations, SPCs historical consolidated financial statements
included in this report are not representative of our results and will not be comparable to our
future financial statements.
  20




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There are conflicts of interest in our relationship with Cumulus.
  Our radio stations depend on certain on-air personalities, the loss of whom could have a material
adverse effect.
  We may not be able to successfully execute our portfolio development strategy.
  We have written off, and could in the future be required to write off, a significant portion of the
fair market value of our FCC broadcast licenses and goodwill, which may adversely affect our
financial condition and results of operations.
 Goodwill and Other Intangible Assets,
 21




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Licensing and ownership rules may limit the growth of our radio broadcasting operations.
     a Report and Order and Order on Reconsideration
 22




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Risks Related to Our Indebtedness
 Even though the 2009 Exchange Offer was successfully completed, if we cannot continue to comply
with the financial covenants in our debt instruments, or obtain waivers or other relief from our
lenders, we may default, which could result in loss of our sources of liquidity and acceleration of
our indebtedness.
   We have a substantial amount of indebtedness, which may adversely affect our cash flow and our
ability to operate our business, remain in compliance with debt covenants and make payments on our
indebtedness.
   
    
    increasing our vulnerability to general economic downturns and adverse industry
conditions;
    
    requiring a substantial portion of cash flow from operations to be dedicated to the
payment of principal and interest on our indebtedness, therefore reducing our ability to
use our cash flow to fund our operations, capital expenditures and future business
opportunities;
    
    exposing us to the risk of increased interest rates as certain of our borrowings,
including borrowings under our senior secured credit facilities, will be at variable rates
of interest;
    
    restricting us from making strategic acquisitions or causing us to make non-strategic
divestitures;
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
    
    limiting our ability to obtain additional financing for working capital, capital
expenditures, debt service requirements, acquisitions and general corporate or other
purposes; and
    
    limiting our ability to adjust to changing market conditions and placing us at a
disadvantage compared to our competitors who have less debt.
  Our debt agreements contain restrictions that limit our flexibility in operating our business.
  
    
    incur additional indebtedness or issue preferred stock;
    
    pay dividends on or make distributions in respect of our capital stock or make other
restricted payments;
    
    make certain investments;
    
    sell certain assets;
    
    create liens on certain assets to secure debt;
    
    consolidate, merge, sell or otherwise dispose of all or substantially all of our
assets;
    
    enter into certain transactions with our affiliates; and
    
    designate our subsidiaries as unrestricted subsidiaries.
   24




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Forward-Looking Statements
   
    
    our substantial indebtedness and debt service obligations;
    
    our ability to refinance our debt and access adequate capital as needed on favorable
terms;
    
    interest rate movement;
    
    general economic and business conditions, both nationally and in our markets;
    
    expectations and estimates concerning future financial performance;
    
    the impact of competition from other radio stations, media forms and communication
service providers;
    
    the impact of existing and future regulations affecting our businesses, including
radio licensing and ownership rules;
    
    increases in programming costs;
    
    the accuracy of our predictions of anticipated trends in its business;
    
    advances in technology and our ability to adapt to and capitalized on such advances;
    
    decreases in our customers advertising expenditures;
    
    our ability to achieve anticipated cost savings; and
    
    other factors contained in our reports filed with the SEC.
   
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  25




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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, Related Stockholder Matters and Issuer Purchases of
Equity Securities
 Market Information for Common Stock
  Holders
  Dividends
  
 Item 6.
    
    Selected Consolidated Financial Data
  26




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##### Table of Contents



(Dollars in thousands)Radio Holdings
    
    
    
    SPC
    
    
    Radio Holdings
    
    
    SPCYear Ended
    
    
    May 5 Through
    
    
    
    January 1
    
    
    Pro Forma
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    
    Though May 4,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2006
    
    
    
    2006
    
    
    2006
    
    
    2005
    
    
    2004(Unaudited)STATEMENT OF OPERATIONS DATA:Net revenues
    
    $
    203,412
    
    
    $
    223,437
    
    
    $
    155,607
    
    
    
    $
    65,987
    
    
    $
    222,012
    
    
    $
    231,587
    
    
    $
    231,058Operating expenses:excluding depreciation, amortization, and
including non-cash contract termination cost of
$6,723 for the period May 5, 2006 through
December 31, 2006
    
    
    119,970
    
    
    
    123,388
    
    
    
    91,870
    
    
    
    
    49,510
    
    
    
    138,400
    
    
    
    152,542
    
    
    
    147,608Corporate general and administrative expenses(1)
    
    
    7,152
    
    
    
    7,214
    
    
    
    4,106
    
    
    
    
    31,029
    
    
    
    7,425
    
    
    
    24,708
    
    
    
    20,297Depreciation and amortization, including pre-sold
advertising amortization of $23,023 for the
period May 5, 2006 through December 31, 2006(2)
    
    
    7,353
    
    
    
    10,393
    
    
    
    30,798
    
    
    
    
    2,421
    
    
    
    35,343
    
    
    
    7,401
    
    
    
    7,759(Gain)/Loss on sale of assets(3)
    
    
    (6
    )
    
    
    96
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (300
    )
    
    
    (10,151
    )Costs related to sale of business, principally
advisory fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,513
    
    
    
    
    
    
    
    
    
    
    
    Impairment of goodwill and intangible assets
    
    
    669,786
    
    
    
    188,019
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impairment of long-term investment
    
    
    2,991
    
    
    
    5,509
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (261
    )Total operating expenses
    
    
    807,246
    
    
    
    334,619
    
    
    
    126,774
    
    
    
    
    97,473
    
    
    
    181,168
    
    
    
    184,351
    
    
    
    165,252Operating income (loss) from continuing operations
    
    
    (603,834
    )
    
    
    (111,182
    )
    
    
    28,833
    
    
    
    
    (31,486
    )
    
    
    40,844
    
    
    
    47,236
    
    
    
    65,806Other income (expense) from continuing operations:Interest expense(4)
    
    
    (65,309
    )
    
    
    (78,509
    )
    
    
    (54,061
    )
    
    
    
    (4,638
    )
    
    
    (80,369
    )
    
    
    (17,141
    )
    
    
    (19,841
    )Gain (loss) on early extinguishment of debt(5)
    
    
    20,935
    
    
    
    1,258
    
    
    
    
    
    
    
    
    (6,492
    )
    
    
    
    
    
    
    
    
    
    
    (3,024
    )Other income (expense)
    
    
    (9
    )
    
    
    (323
    )
    
    
    (1,655
    )
    
    
    
    
    
    
    
    1,675
    
    
    
    
    
    
    
    Income (loss) from continuing operations before
income taxes and minority interests
    
    
    (648,217
    )
    
    
    (188,756
    )
    
    
    (26,883
    )
    
    
    
    (42,616
    )
    
    
    (37,850
    )
    
    
    30,095
    
    
    
    42,941Provision (benefit) for income taxes
    
    
    (122,588
    )
    
    
    (3,466
    )
    
    
    (8,276
    )
    
    
    
    (16,640
    )
    
    
    (12,131
    )
    
    
    4,541
    
    
    
    17,543Minority interests(6)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,368
    )
    
    
    
    
    
    
    1,795
    
    
    
    (8,507
    )Earnings (loss) from continuing operations
    
    $
    (525,629
    )
    
    $
    (185,290
    )
    
    $
    (18,607
    )
    
    
    $
    (27,344
    )
    
    $
    (25,719
    )
    
    $
    27,349
    
    
    $
    16,891Discontinued operations:Gain (loss) from operations of discountinued
operations (including gain on sale of $498,387 in 2006)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    502,718
    
    
    
    
    
    
    
    (19,659
    )
    
    
    (12,866
    )Provision (benefit) for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    195,647
    
    
    
    
    
    
    
    (9,765
    )
    
    
    (2,321
    )Minority interest income (expense)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (73,966
    )
    
    
    
    
    
    
    (1,446
    )
    
    
    (997
    )Gain (loss) on discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    233,105
    
    
    
    
    
    
    
    (11,340
    )
    
    
    (11,542
    )Net income (loss)
    
    $
    (525,629
    )
    
    $
    (185,290
    )
    
    $
    (18,607
    )
    
    
    $
    205,761
    
    
    $
    (25,719
    )
    
    $
    16,009
    
    
    $
    5,349OTHER FINANCIAL DATAStation Operating Income (7)
    
    $
    83,442
    
    
    $
    100,049
    
    
    $
    63,737
    
    
    
    $
    16,477
    
    
    $
    83,612
    
    
    $
    79,045
    
    
    $
    83,450Cash provided by (used in) operating activities
    
    $
    25,977
    
    
    $
    14,905
    
    
    $
    22,706
    
    
    
    $
    (204,009
    )
    
    
    *
    *
    
    $
    60,491
    
    
    $
    119,903Cash provided by (used in) investing activities
    
    $
    1,120
    
    
    $
    (1,059
    )
    
    $
    (1,220,515
    )
    
    
    $
    719,806
    
    
    
    *
    *
    
    $
    (3,191
    )
    
    $
    (169,868
    )Cash provided by (used) in financing activities
    
    $
    54,194
    
    
    $
    (19,849
    )
    
    $
    1,205,707
    
    
    
    $
    (523,134
    )
    
    
    *
    *
    
    $
    (56,766
    )
    
    $
    45,469BALANCE SHEET DATATotal assets
    
    $
    665,222
    
    
    $
    1,277,692
    
    
    $
    1,494,386
    
    
    
    $
    454,497
    
    
    $
    1,494,386
    
    
    $
    878,796
    
    
    
    *
    *Long-term debt (including current portion)
    
    $
    941,774
    
    
    $
    910,159
    
    
    $
    931,500
    
    
    
    $
    208,153
    
    
    $
    931,500
    
    
    $
    255,328
    
    
    
    *
    *Total stockholders equity
    
    $
    (430,197
    )
    
    $
    96,031
    
    
    $
    281,503
    
    
    
    $
    99,747
    
    
    $
    281,503
    
    
    $
    74,118
    
    
    
    *
    *
 
 **
    
    Calculation not meaningful(1)
    
    Corporate general and administrative expenses during the historical periods consist of substantially all of the corporate level general and administrative expenses
for SPC, which were previously shared among SPCs cable, dinnerware, real estate and radio operations. The portion of these expenses that were not internally
allocated to the Radio segment is recorded in other segment. The portion that was internally allocated to Radio Holdings includes amounts paid to SPC and
Media for SPCs corporate management and shared services under a management agreement that was terminated in connection with the Acquisition.
Corporate general and administrative expenses on a pro forma basis reflect a decrease primarily relating to the elimination of certain costs and a replacement of
costs with the annual management fee payable under the management agreement with Cumulus equal to the greater of $4.0 million or 4% of Holdings consolidated
EBITDA (as described in the management agreement with Cumulus) with certain adjustments. See the notes to the audited consolidated financial statements of SPC
for segment information for continuing operations.(2)
    
    For the years ended December 31, 2004 and 2005, the portion of depreciation and amortization attributable to SPCs radio operations was $6.6 million and $6.2
million, respectively. See the notes to the audited consolidated financial statements of SPC for segment information for continuing operations.(3)
    
    On November 12, 2004, SPCs subsidiary, Susquehanna Media Co., sold the assets of a radio station for $11.5 million in cash. The gain on the sale recognized in
2004 was $10.2 million. An additional $0.3 million of gain was recognized in 2005. See notes to the audited consolidated financial statements of SPC for
additional information.(4)
    
    Interest expense attributed to SPCs radio operations for the years ended December 31, 2004 and 2005 was $8.0 million and $4.1 million, respectively. Interest
expense for the year ended December 31, 2004 includes $3.6 million of interest and $0.1 million of other expense related to the summary judgment grated in favor
of Bridge Capital Investors II against SPCs indirect subsidiary, Susquehanna Radio Corp., by the United States District Court for the Northern District of Georgia
on January 26, 2005. Pro forma interest expense includes amortization of capitalized debt issuance cost.(5)
    
    Represents a $3.0 million loss on debt extinguishment (including $0.9 million charge for unamortized deferred financing costs) incurred in 2004 relating to the
redemption of SPCs then-outstanding 8.5% senior subordinated notes due 2009. See the notes to the audited consolidated financial statements of SPC for
additional information.(6)
    
    Represents changes in the value of (a) outstanding shares under Susquehanna Radio Corp.s Employee Stock Plan (ESOP) that allowed certain key employees to
purchase Susquehanna Radio Corp.s Class B non-voting common stock and (b) outstanding shares of station subsidiaries owned by persons other than SPC and
its subsidiaries. Those shares and other interests were redeemed or eliminated prior to, or in connection with the Acquistion. See the notes to the audited
consolidated financial statements of SPC for additional information.(7)
    
    The following table sets forth a quantitative reconciliation of Station Operating Income to its most directly comparable financial measure calculated and presented
in accordance with GAAP for the periods shown below. 27




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##### Table of Contents



(Dollars in thousands)Radio Holdings
    
    
    
    SPC
    
    Radio Holdings
    

    SPCYear Ended
    
    
    May 5 Through
    
    
    
    January 1
    
    
    Pro Forma
    
    
    Year EndedDecember 31,
    

    December 31,
    
    
    
    Through May 4,
    

    December 31,
    

    December 31,2008
    

    2007
    

    2006
    
    
    
    2006
    

    2006
    

    2005
    

    2004Operating income (loss) from
continuing operations
    
    $
    (603,834
    )
    
    $
    (111,182
    )
    
    $
    28,833
    
    
    
    $
    (31,486
    )
    
    
    40,844
    
    
    $
    47,236
    
    
    $
    65,806Corporate general and
administrative expenses
    
    
    7,152
    
    
    
    7,214
    
    
    
    4,106
    
    
    
    
    31,029
    
    
    
    7,425
    
    
    
    24,708
    
    
    
    20,297Depreciation and amortization
    
    
    7,353
    
    
    
    10,393
    
    
    
    30,798
    
    
    
    
    2,421
    
    
    
    35,343
    
    
    
    7,401
    
    
    
    7,759(Gain)/Loss on sale of assets
    
    
    (6
    )
    
    
    96
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (300
    )
    
    
    (10,151
    )Costs related to sale of business
principally advisory fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,513
    
    
    
    
    
    
    
    
    
    
    
    Impairment of goodwill and
intangible assets
    
    
    669,786
    
    
    
    188,019
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impairment of long-term investment
    
    
    2,991
    
    
    
    5,509
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (261
    )Station Operating Income
    
    $
    83,442
    
    
    $
    100,049
    
    
    $
    63,737
    
    
    
    $
    16,477
    
    
    
    83,612
    
    
    $
    79,045
    
    
    $
    83,450
 
 Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
  Highlights during 2008 and Overview
   Liquidity Considerations
   28




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##### Table of Contents



Advertising Revenue and Station Operation Income
    29




---



##### Table of Contents



Results of Operations
  Radio Holdings

    
    Amount Change
    
    Percent ChangeYear Ended
    
    
    Pro
    
    
    2008
    
    
    2007 vs.
    
    
    2008
    
    
    2007December 31,
    
    
    Forma
    
    
    vs.
    
    
    Pro Forma
    
    
    vs
    
    
    vs Pro2008
    
    2007
    
    2006
    
    2007
    
    2006
    
    2007
    
    Form 2006Net revenues
    
    $
    203,412
    
    
    $
    223,437
    
    
    $
    222,012
    
    
    $
    (20,025
    )
    
    $
    1,425
    
    
    
    -9.0
    %
    
    
    0.6
    %Operating expenses:Station operating expense excluding
depreciation amortization and
including non-cash contract
termination costs of $6,723 for the
period May 5, 2006 through December
31, 2006
    
    
    119,970
    
    
    
    123,388
    
    
    
    138,400
    
    
    
    (3,418
    )
    
    
    (15,012
    )
    
    
    -2.8
    %
    
    
    -10.8
    %Corporate general and
administrative expenses
    
    
    7,152
    
    
    
    7,214
    
    
    
    7,425
    
    
    
    (62
    )
    
    
    (211
    )
    
    
    -0.9
    %
    
    
    -2.8
    %Depreciation and amortization,
including pre-sold advertising
amortization of $23,023 for the
period May 5, 2006 through December
31, 2006
    
    
    7,353
    
    
    
    10,393
    
    
    
    35,343
    
    
    
    (3,040
    )
    
    
    (24,950
    )
    
    
    -29.3
    %
    
    
    -70.6
    %(Gain)/Loss on sale of assets
    
    
    (6
    )
    
    
    96
    
    
    
    
    
    
    
    (102
    )
    
    
    96
    
    
    
    -106.3
    %
    
    
    *
    *Impairment of goodwill and
intangible assets
    
    
    669,786
    
    
    
    188,019
    
    
    
    
    
    
    
    481,767
    
    
    
    188,019
    
    
    
    256.2
    %
    
    
    *
    *Impairment of long-term investment
    
    
    2,991
    
    
    
    5,509
    
    
    
    
    
    
    
    (2,518
    )
    
    
    5,509
    
    
    
    -45.7
    %
    
    
    *
    *Total operating expenses
    
    
    807,246
    
    
    
    334,619
    
    
    
    181,168
    
    
    
    472,627
    
    
    
    153,451
    
    
    
    141.2
    %
    
    
    84.7
    %Operating income (loss) from
continuing operations
    
    
    (603,834
    )
    
    
    (111,182
    )
    
    
    40,844
    
    
    
    (492,652
    )
    
    
    (152,026
    )
    
    
    443.1
    %
    
    
    **
    %Non-operating income (expense) from
continuing operations:Interest expense, net
    
    
    (65,309
    )
    
    
    (78,509
    )
    
    
    (80,369
    )
    
    
    13,200
    
    
    
    1,860
    
    
    
    -16.8
    %
    
    
    -2.3
    %Gain on early extinguishment of debt
    
    
    20,935
    
    
    
    1,258
    
    
    
    
    
    
    
    19,677
    
    
    
    1,258
    
    
    
    1564.1
    %
    
    
    *
    *Other income (expense)
    
    
    (9
    )
    
    
    (323
    )
    
    
    1,675
    
    
    
    314
    
    
    
    (1,998
    )
    
    
    -97.2
    %
    
    
    -119.3
    %Income (loss) from continuing
operations before income taxes and
minority interest
    
    
    (648,217
    )
    
    
    (188,756
    )
    
    
    (37,850
    )
    
    
    (459,461
    )
    
    
    (150,906
    )
    
    
    243.4
    %
    
    
    398.7
    %(Benefit) provision for income taxes
    
    
    (122,588
    )
    
    
    (3,466
    )
    
    
    (12,131
    )
    
    
    (119,122
    )
    
    
    8,665
    
    
    
    3436.9
    %
    
    
    -71.4
    %Minority interest income (expense)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    *
    *
    
    
    *
    *Earnings (loss) from continuing
operations
    
    $
    (525,629
    )
    
    $
    (185,290
    )
    
    $
    (25,719
    )
    
    $
    (340,339
    )
    
    $
    (159,571
    )
    
    
    183.7
    %
    
    
    620.4
    %
 
 **
    
    Calculation not meaningful  30




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##### Table of Contents



Year Ended December 31, 2008 Compared to the Year Ended December 31, 2007
 Net Revenues.
 Station Operating Expenses, excluding Depreciation and Amortization.
 Corporate, General and Administrative Expenses.
 Depreciation and Amortization.
 Impairment Charge. Goodwill and Other Intangible Assets
 Impairment of long-term investment.
 Other Expense (Income)
 Gain on Early Extinguishment of Debt.
 Income
Taxes.
 31




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##### Table of Contents



Station Operating Income.
 Intangible Assets.
  Year Ended December 31, 2007 Compared to the Pro Forma Year Ended December 31, 2006
 Unaudited
Pro Forma Condensed Consolidated Statement of Operations
  
    
    the Acquisition;
    
    interest expense for the issuance of $250 million of the Existing Notes;
    
    interest expense for the borrowing of $700 million of term loans under Radio Holdings
senior secured credit facilities;
    
    the elimination of certain corporate level general and administrative expenses;
 
    
    the elimination of minority interest, the impact of the SPC tax-sharing agreement and
certain other liabilities retained by the selling stockholders of SPC; and
    
    the elimination of minority interest, the impact of the SPC tax-sharing agreement and
certain other liabilities retained by the selling stockholders of SPC; and
 
    
    elimination of certain interest expense due to the repayment of SPCs then-existing
indebtedness.
   32




---



##### Table of Contents



Unaudited Pro Forma Condensed Consolidated Statement of Operations Information
for the Year Ended December 31, 2006
 SPC
    
    
    Radio HoldingsHistorical
    
    
    Historical
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Pro FormaJanuary 1, to
    
    
    May 5, to
    
    
    Historical
    
    
    Pro Forma
    
    
    ConsolidatedMay 4, 2006
    

    December 31, 2006
    
    Total
    
    Adjustments
    
    Total(Dollars in thousands)Net Revenues
    
    $
    65,987
    
    
    $
    155,607
    
    
    $
    221,594
    
    
    $
    418
    
    
    
    (a
    )
    
    $
    222,012Operating expenses:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Station operating expense
excluding depreciation
amortization and including
non-cash contract termination
costs of $6,723
    
    
    49,510
    
    
    
    91,870
    
    
    
    141,380
    
    
    
    (2,980
    )
    
    
    (b
    )
    
    
    138,400Corporate, general, and
administrative expenses
    
    
    31,029
    
    
    
    4,106
    
    
    
    35,135
    
    
    
    (27,710
    )
    
    
    (c
    )
    
    
    7,425Depreciation and amortization
    
    
    2,421
    
    
    
    30,798
    
    
    
    33,219
    
    
    
    2,124
    
    
    
    (d
    )
    
    
    35,343Costs related to sale of
business, principally advisory
fees
    
    
    14,513
    
    
    
    
    
    
    
    14,513
    
    
    
    (14,513
    )
    
    
    (e
    )
    
    
    Total operating expenses
    
    
    97,473
    
    
    
    126,774
    
    
    
    224,247
    
    
    
    (43,079
    )
    
    
    
    
    
    
    181,168Operating income (loss) from
continuing operations
    
    
    (31,486
    )
    
    
    28,833
    
    
    
    (2,653
    )
    
    
    43,497
    
    
    
    
    
    
    
    40,844Non-operating income (expense)
from continuing operations:Interest expense, net
    
    
    (4,638
    )
    
    
    (54,061
    )
    
    
    (58,699
    )
    
    
    (21,670
    )
    
    
    (f
    )
    
    
    (80,369
    )Loss on early extinguishment of
debt
    
    
    (6,492
    )
    
    
    
    
    
    
    (6,492
    )
    
    
    6,492
    
    
    
    (g
    )
    
    
    Other income (expense)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,675
    
    
    
    (h
    )
    
    
    1,675Loss from continuing operations
before income taxes and minority
interest
    
    
    (42,616
    )
    
    
    (25,228
    )
    
    
    (67,844
    )
    
    
    29,994
    
    
    
    
    
    
    
    (37,850
    )(Benefit) provision for income
taxes
    
    
    (16,640
    )
    
    
    (8,276
    )
    
    
    (24,916
    )
    
    
    12,785
    
    
    
    (i
    )
    
    
    (12,131
    )Minority interest income (expense)
    
    
    (1,368
    )
    
    
    
    
    
    
    (1,368
    )
    
    
    1,368
    
    
    
    (j
    )
    
    
    Loss from continuing operations
    
    $
    (27,344
    )
    
    $
    (16,952
    )
    
    $
    (44,296
    )
    
    $
    18,577
    
    
    
    
    
    
    $
    (25,719
    )
 See accompanying notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations Information.
 33




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##### Table of Contents



Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations Information
 (a)
    
    Reflects the additional revenue generated by a radio station, for the period January 1, 2006 through May 4, 2006, which
was contributed to us on May 5, 2006 by an affiliate.(b)
    
    Reflects the decrease in station operating expense primarily related to the elimination of expenses associated with an ESOP
and pension plan that was terminated in connection with the Acquisition. Ongoing benefits and overall compensation
structure do not include an employee stock purchase plan or pension plan or otherwise replace this benefit. There is also an
increase of station operating expenses of $0.2 million for the January 1, 2006 through May 4, 2006, resulting from stations
contributed to us on May 5, 2006 by an affiliate.(c)
    
    Reflects the decrease in corporate, general, and administrative expenses primarily relating to the elimination of expenses that
have been replaced by those contractually provided under the Cumulus management agreement for an annual cash fee that
is the greater of $4 million or 4% of Holdings consolidated free cash flows (as described in the Cumulus management
agreement) with certain adjustments. Ongoing advisory fees payable to the Sponsors pursuant to the advisory services
agreement, which annually total the greater of $1 million or 1% of Holdings consolidated free cash flows (as described in the
Cumulus management agreement) with certain adjustments, have been added to the corporate, general, and administrative
expenses.(d)
    
    Reflects the increase in depreciation and amortization expense primarily due to the amortization of identified intangible assets
using a weighted average straight-line life of 1.2 years. These intangible assets exclude broadcast licenses which are not
amortized because they are classified as having indefinite lives.(e)
    
    Reflects the elimination of certain non-recurring costs related to the sale of the business by the previous SPC shareholders.(f)
    
    Reflects the increase in interest expense resulting from the issuance of debt to finance a portion of the purchase price for the
Acquisition. The interest rate on the new debt of $950.0 million is assumed to be at a weighted average of 8.3%. A 1/8%
fluctuation of the weighted average interest rate would result in a change in interest expense and net loss of approximately
$1.2 million and approximately $0.8 million before and after taxes, respectively. Pro forma interest expense includes
amortization of capitalized debt issuance costs.(g)
    
    Reflects the elimination of non-recurring costs related to the termination of certain credit facilities due to the repayment of all
existing debt of SPC.(h)
    
    As of the consummation of the Acquisition, Radio Holdings incurred approximately $1.7 million in expenses related to a
commitment fee for a bridge loan which could have been activated if needed to complete the transaction. The bridge loan
was never utilized and the commitment was terminated and a termination fee was paid. This amount is non-recurring and was
included in the unaudited pro forma a condensed consolidated statement of operations.(i)
    
    Reflects the income tax benefit at an effective tax rate of 30.55%. Although realization is not assured, management believes
that it is more likely than not that the deferred tax assets will be realized. The amount of the deferred tax asset considered
realizable, however, could be reduced in the future, if estimates of future taxable income are reduced.(j)
    
    Reflects the elimination of minority interest that was made because those interest were redeemed or eliminated prior to, or in
connection with, the Acquisition. 34




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##### Table of Contents



Net Revenues.
 Station Operating Expenses, excluding Depreciation and Amortization.
 Corporate, General and Administrative Expenses.
 Depreciation and Amortization.
 Impairment Charge.
 Impairment of long-term investment.
 Other Expense (Income).
 Gain (Loss) on Early Extinguishment of Debt.
 Income
Taxes.
 Station Operating Income.
 Intangible Assets.
 Seasonality
  35




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##### Table of Contents



Liquidity and Capital Resources
 Sources of Liquidity
 Consideration of Recent Economic Developments and the Outlook for 2009
    36




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##### Table of Contents



Sources of Liquidity
  20089.875% Senior subordinated notes
    
    $
    187,594Term loan
    
    $
    657,500Revolver
    
    $
    96,680Total
    
    $
    941,774Less amounts payable within one year
    
    
    7,000$
    934,774
      37




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##### Table of Contents




    
    a maximum total leverage ratio
    
    an interest coverage ratio; and
    
    a limit on annual capital expenditures.
  Covenant
    
    ActualRequirement
    
    RatioMaximum total leverage ratio
    
    
    10.50
    
    
    
    10.44Interest coverage ratio
    
    
    1.15
    
    
    
    1.47
  Fiscal Year
    
    March 31
    
    June 30
    
    September 30
    
    December 312009
    
    
    10.25:1
    
    
    
    10.25:1
    
    
    
    10.00:1
    
    
    
    9.50:12010
    
    
    9.50:1
    
    
    
    9.25:1
    
    
    
    9.00:1
    
    
    
    8.75:12011
    
    
    8.50:1
    
    
    
    8.25:1
    
    
    
    8.00:1
    
    
    
    7.75:12012
    
    
    7.50:1
    
    
    
    7.50:1
    
    
    
    7.00:1
    
    
    
    6.75:12013
    
    
    6.75:1
    
    
    
    6.75:1
    
    
    
    6.75:1
    
    
    
    6.75:1
        38




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##### Table of Contents



39




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##### Table of Contents



40




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##### Table of Contents



Cash Flow from Operating Activities
  2008
    
    2007
    
    2006Net cash provided by/(used in) operating activities
    
    $
    25,977
    
    
    $
    14,905
    
    
    $
    (181,303
    )
  Cash Flow from Investing Activities
 2008
    
    2007
    
    2006Net cash provided by/(used in) investing activities
    
    $
    1,120
    
    
    $
    (1,059
    )
    
    $
    (500,709
    )
  Cash Flow from Financing Activities
 2008
    
    2007
    
    2006Net cash provided by/(used in) financing activities
    
    $
    54,194
    
    
    $
    (19,849
    )
    
    $
    682,573
  Completed Acquisitions
  Completed Dispositions
  Early Extinguishment of Debt
  Future Needs for Liquidity
  41




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##### Table of Contents



Critical Accounting Policies and Estimates
    Goodwill and other Intangible Assets
  42




---



##### Table of Contents



Summary Disclosures about Contractual Obligations and Commercial Commitments
  TotalAmountsContractual Cash Obligations
    
    Committed
    

    2009
    
    2010
    
    2011
    
    2012
    
    2013
    
    ThereafterLong-term debt(1)
    
    $
    941,774
    
    
    $
    7,000
    
    
    $
    7,000
    
    
    $
    7,000
    
    
    $
    103,680
    
    
    $
    629,500
    
    
    $
    187,594Broadcast rights(2)
    
    
    11,385
    
    
    
    9,275
    
    
    
    617
    
    
    
    619
    
    
    
    621
    
    
    
    253
    
    
    
    Operating leases
    
    
    28,604
    
    
    
    4,905
    
    
    
    4,714
    
    
    
    3,628
    
    
    
    2,956
    
    
    
    2,849
    
    
    
    9,552Other contractual
obligations(3)
    
    
    13,172
    
    
    
    9,818
    
    
    
    1,504
    
    
    
    1,583
    
    
    
    267
    
    
    
    
    
    
    
    Total
    
    $
    994,935
    
    
    $
    30,998
    
    
    $
    13,835
    
    
    $
    12,830
    
    
    $
    107,524
    
    
    $
    632,602
    
    
    $
    197,146
 
 (1)
    
    As a result of the 2009 Exchange Offer, as of the date of this report, our contractual cash obligation with respect to our long-term
debt after 2013 will be $26.1 million, consisting of $12.1 million in aggregate principal of Existing Notes and $14.0 million in
aggregate principal of New Notes.(2)
    
    Broadcast rights represent fees we are obligated to pay in exchange for the rights for our station, KNRB AM, to broadcast San
Francisco Giant baseball games through the 2009 MLB baseball seasons and Radio Holdings, through an indirect subsidiary, holds
broadcast rights for the Kansas City Chiefs NFL franchise through the 2009 football season. The contract requires minimum rights
payments of $2.8 million, $2.9 million, and $3.0 million for the 2007, 2008, 2009 football seasons, respectivlely. See the notes to the
accompanying audited financial consolidated financial statements for more information.(3)
    
    Other contractual obligations include minimum management fee payments under the management agreement with Cumulus and the
advisory services agreement with the Sponsors, amounts owed under our contractual agreement with Arbitron and amounts payable
to certain on air talent.  Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
 SFAS No. 141(R). Business Combinations
 43




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##### Table of Contents



SFAS 157. Fair Value Measurements
 SFAS 159. The Fair Value Option for Financial
Assets and Financial Liabilities  Including an Amendment of FASB Statement No. 115
 Noncontrolling Interests in
Consolidated Financial Statements  an amendment of ARB No. 51 ( ),
 SFAS 161. Disclosures about Derivative
Instruments and Hedging Activities Accounting
for Derivative Instruments and Hedging Activities
 FSP No. 142-3. Determination of the Useful Lives of Intangible Assets
 FSP FAS 157-3.
 44




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##### Table of Contents



FSP FAS 140-4 and FIN 46R-8. Disclosures by
Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable
Interest Entities Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities-a replacement of FASB Statement No. 125 , ( ) Consolidation of Variable Interest Entities (revised December
2003)an interpretation of ARB No. 51 .
 
 Item 7A.
    
    Quantitative and Qualitative Disclosure about Market Risk
 Interest Rate Risk
     45




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##### Table of Contents



Item 8.
    
    Financial Statements and Supplementary Data
  
 Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 request-for-proposal
   Accounting for Uncertainty in Income Taxes  an interpretation of
    FASB Statement No. 109
  Regulation S-K, Form 10-Q
 
 Item 9A.
    
    Controls and Procedures
 (a) Evaluation of Disclosure Controls and Procedures
  46




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##### Table of Contents



(b) Managements Report on Internal Control over Financial Reporting
 Internal Control-Integrated Framework
     Lewis W. Dickey, Jr.
    
    Martin R. GausvikChairman, President, Chief Executive
    
    Executive Vice President, Treasurer,Officer and Director
    
    and Chief Financial Officer
 (c) Changes in Internal Control over Financial Reporting
  
 Item 9B.
    
    Other Information
  
 PART III
 
 Item 10.
    
    Directors and Executive Officers and Corporate Governance
  47




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##### Table of Contents



Board of Directors and Committees of the Board of Directors
 i.e.
  Code of Ethics
  
 Item 11.
    
    Executive Compensation
 Executive Compensation
  Compensation of Directors
  
 Item 12.
    
    Security Ownership of Certain Beneficial Owners & Management and Related Stockholder Matters
  48




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##### Table of Contents



Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
 The Capital Contribution Agreement
  CMP LLC Agreement
  Cumulus Management Agreement
    49




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##### Table of Contents



Equityholders Agreement
  Board Representation.
  Preemptive Rights; Restrictions on Transfer.
 Right of First Offer; Tag-Along and Drag-Along Rights.
 50




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##### Table of Contents



Corporate Opportunities.
 Registration Rights Agreement
  Advisory Services Agreement
   Non-Solicitation Agreement
  51




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##### Table of Contents



Service Mark License
  Director Independence
  
 Item 14.
    
    Principal Accountant Fees and Services
 Audit Fees
   Audit Related Fees
  Tax Fees
  All Other Fees
  Policy on Pre-Approval of Services Performed by Independent Auditors
  52




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##### Table of Contents



PART IV
 
 Item 15.
    
    Exhibits and Financial Statement Schedules
 Financial Statements.
 Exhibits.
 3.1
    
    
    Amended and Restated Certificate of Incorporation of CMP
Susquehanna Radio Holdings Corp., (incorporated herein by reference to
Exhibit 3.1 of our current report on Form 8-K, filed on
April 1, 2009)3.2
    
    
    Bylaws of CMP Susquehanna Guarantor Corp. (former name of CMP
Susquehanna Radio Holdings Corp.) (Incorporated herein by reference to
Exhibit 3.2 of our registration statement on Form S-4, filed on June
6, 2007 (Commission File 333-143558))4.1
    
    
    Form of Preferred Stock Certificate of CMP Susquehanna Radio
Holdings Corp. (incorporated by reference to Exhibit 4.1 of our
current report on Form 8-K, filed April 1, 2009)4.2
    
    
    Form of Warrant Certificate of CMP Susquehanna Radio Holdings
Corp. (incorporated by reference to Exhibit 4.2 of our current report
on Form 8-K, filed April 1, 2009)4.3
    
    
    Form of Common Stock Certificate of CMP Susquehanna Radio Holdings
Corp. (incorporated by reference to Exhibit 4.3 of our current report
on Form 8-K, filed April 1, 2009)4.4
    
    
    Indenture, dated May 05, 2006 among CMP Susquehanna Corp., the
Guarantors party thereto, and Wells Fargo Bank, National Association,
as trustee (incorporated by reference to Exhibit 4.1 of our
registration statement on Form S-4, filed June 6, 2006 (Commission
File 333-143558)4.5
    
    

First
Supplemental Indenture, dated as of March 26, 2009, among CMP
Susquehanna Corp., CMP Susquehanna Radio Holdings Corp., as guarantor,
the subsidiary guarantors party thereto and Wells Fargo Bank, N.A., as
trustee (incorporated by reference to Exhibit 4.4 of our current
report on Form 8-K, filed April 1, 2009)4.6
    
    

Indenture,
dated as of March 26, 2009, among CMP Susquehanna Corp.,
CMP Susquehanna Radio Holdings Corp., as guarantor, the subsidiary
guarantors party thereto and Wells Fargo Bank, N.A., as trustee
(incorporated by reference to Exhibit 4.5 of our current report on
Form 8-K, filed April 1, 2009)4.7
    
    
    Form of Variable Rate Senior Subordinated Secured Second Lien
Notes due 2014 of CMP Susquehanna Corp. (incorporated by reference to
Exhibit 4.6 of our current report on Form 8-K, filed April 1, 2009)4.8
    
    
    Registration Rights Agreement, dated May 5, 2006, among CMP
Susquehanna Corp., the Guarantors party thereto, and the initial
purchasers of the Notes (incorporated herein by reference to Exhibit
4.2 of our registration statement on Form S-4, filed on June 6, 2007
(Commission File 333-143558))10.1
    
    
    Credit Agreement, dated as of May 5, 2006, among CMP Susquehanna
Corp., CMP Susquehanna Radio Holdings Corp., Deutsche Bank Trust
Company Americas, as administrative agent, and the other
lenders party thereto (incorporated herein by reference to Exhibit
10.1 of our registration statement on Form S-4, filed on June 6, 2007
(Commission File 333-143558))
 53




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##### Table of Contents



10.2
    
    
    Guarantee Agreement, dated as of May 5, 2006, among CMP
Susquehanna Radio Holdings Corp., CMP Susquehanna Corp., the
subsidiaries of CMP Susquehanna Corp. identified therein and Deutsche
Bank Trust Company Americas, as administrative agent (incorporated
herein by reference to Exhibit 10.2 of our registration statement on
Form S-4, filed on June 6, 2007 (Commission File 333-143558))10.3
    
    
    Security Agreement, dated as of May 5, 2006, among CMP
Susquehanna Radio Holdings Corp., CMP Susquehanna Corp., the
subsidiaries of CMP Susquehanna Corp. identified therein and Deutsche
Bank Trust Company Americas, as collateral agent (incorporated herein
by reference to Exhibit 10.3 of our registration statement on Form
S-4, filed on June 6, 2007 (Commission File 333-143558))10.4
    
    

Security
Agreement, dated as of March 26, 2009, among CMP
Susquehanna Corp., CMP Susquehanna Radio Holdings Corp., as guarantor
and pledgor, the other guarantors party thereto, as pledgors, and
Wells Fargo Bank, N.A., as collateral agent (incorporated by reference
to Exhibit 10.1 of our current report on Form 8-K, filed April 1,
2009)10.5
    
    
    Intercreditor Agreement, dated as of March 26, 2009, among CMP
Susquehanna Corp., CMP Susquehanna Radio Holdings Corp., as grantor,
the other guarantors party thereto, Deutsche Bank Trust Company
Americas, as collateral agent under the first-lien credit documents,
and Wells Fargo Bank, N.A., as collateral agent under the second-lien
subordinated notes documents (incorporated by reference to Exhibit
10.2 of our current report on Form 8-K, filed April 1, 2009)10.6
    
    
    Warrant Agreement, dated as of March 26, 2009, between CMP
Susquehanna Radio Holdings Corp. and Computershare Trust Company,
N.A., as warrant agent (incorporated by reference to Exhibit 10.3 of
our current report on Form 8-K, filed April 1, 2009)10.7
    
    
    Registration Rights Agreement, dated as of March 26, 2009, among
CMP Susquehanna Radio Holdings Corp. and Holders of Preferred Stock
and Warrants (incorporated by reference to Exhibit 10.4 of our current
report on Form 8-K, filed April 1, 2009)10.8
    
    
    Management Agreement, dated as of May 3, 2006, by and between CMP
Susquehanna Holdings Corp. and Cumulus Media Inc. (incorporated herein
by reference to Exhibit 10.4 of our registration statement on Form
S-4, filed on June 6, 2007 (Commission File 333-143558))16.1
    
    
    Letter regarding change in certifying accountant, dated as of
June 23, 2008 from KPMG LLP to the Securities and Exchange Commission
(incorporated herein by reference to Exhibit 16.1 to our current
report of Form 8-K, filed on June 23, 2008)21.1*
    
    
    Subsidiaries23.1*
    
    
    Consent of PricewaterhouseCoopers LLP23.2*
    
    

Consent of KPMG, LLP23.3*
    
    

Consent of KPMG, LLP31.1*
    
    
    Certification of the Principal Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 200231.2*
    
    
    Certification of the Principal Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 200232.1*
    
    
    Officer Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
 
 *
    
    Filed herewith(b)
    
    Exhibits. See Item 15(a) (3).(c)
    
    Financial Statement Schedules.Schedule II  Valuation and Qualifying Accounts 54




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##### Table of Contents



SIGNATURES
 th
 CMP Susquehanna Radio Holdings Corp.By:
    /s/ Martin R. GausvikMartin R. GausvikExecutive Vice President, Treasurer
And Chief Financial Officer  Signature
    
    Title
    
    Date/s/ Lewis W. Dickey

Lewis W. Dickey, Jr.
    
    Chairman, President, Chief Executive Officer and
Director (Principal Executive Officer)
    
    April 15, 2009/s/ Martin R. Gausvik

Martin R. Gausvik
    
    Executive Vice President, Chief Financial Officer and 
Treasurer (Principal Financial and Accounting Officer)
    
    April 15, 2009/s/ David M. Tolley

David M. Tolley
    
    Director
    
    April 15, 2009
 55




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##### Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 Annual Consolidated Financial Statements
 Reports of Independent Registered Public Accounting Firms (CMP Susquehanna
Radio Holdings Corp. Radio Holdings)
    
    
    F-2Independent Auditors Report (Susquehanna Pfaltzgraff Co. Predecessor)
    
    
    F-3Consolidated Balance Sheets as of December 31, 2008 and 2007 (CMP
Susquehanna Radio Holdings Corp. Radio Holdings)
    
    
    F-5Consolidated Statements of Operations for the Years Ended December 31, 2008 and
2007 and for the Period from May 5, 2006 (date of inception) through December
31, 2006 (CMP Susquehanna Radio Holdings Corp. Radio Holdings), the Period
from January 1, 2006 through May 4, 2006.
    
    
    F-6Consolidated Statements of Stockholders (Deficit) Equity and Comprehensive
Income (Loss) for the Years Ended December 31, 2008, 2007, and for the Period
from May 5, 2006 (date of inception) through December 31, 2006 (CMP
Susquehanna Radio Holdings Corp. Radio Holdings), the Period from January 1,
2006 through May 4, 2006
    
    
    F-7Consolidated Statements of Cash Flows for the Years Ended December 31, 2008,
2007, and for the Period from May 5, 2006 (date of inception) through December
31, 2006 (CMP Susquehanna Radio Holdings Corp. Radio Holdings), the Period
from January 1, 2006 through May 4, 2006.
    
    
    F-8Notes to Consolidated Financial Statements (CMP Susquehanna Radio Holdings Corp.
Radio Holdings and Susquehanna Pflatzgraff Co. Predecessor)
    
    
    F-9
 F-1




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
   Fair Value Measurements.
 /s/  PricewaterhouseCoopers LLP 
 F-2




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    Accounting for
Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109
  
 F-3




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##### Table of Contents



Independent Auditors Report
 
    
 F-4




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##### Table of Contents



CMP SUSQUEHANNA RADIO HOLDINGS CORP. AND SUBSIDIARIES (Radio Holdings)
CONSOLIDATED BALANCE SHEETS
December 31, 2008 and 2007
(Dollars in thousands, except for share data)
 December 31,2008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    83,186
    
    
    $
    1,895Accounts receivable, less allowance for doubtful accounts of
$1,280 in 2008 and $1,050 in 2007, respectively
    
    
    38,580
    
    
    
    47,270Prepaid expenses and other current assets
    
    
    3,246
    
    
    
    2,174Total current assets
    
    
    125,012
    
    
    
    51,339Property, plant and equipment, net
    
    
    31,074
    
    
    
    36,503Intangible assets, net
    
    
    411,406
    
    
    
    751,135Goodwill
    
    
    79,700
    
    
    
    412,795Deferred financing costs, net (including accumulated amortization
of $9,092 in 2008 and $5,836 in 2007, respectively)
    
    
    14,030
    
    
    
    18,929Long term investments
    
    
    4,000
    
    
    
    6,991Total assets
    
    $
    665,222
    
    
    $
    1,277,692LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITYCurrent liabilities:Accounts payable
    
    $
    2,873
    
    
    $
    483Current portion of long-term debt
    
    
    7,000
    
    
    
    25,160Accrued interest
    
    
    3,391
    
    
    
    4,574Accrued state income taxes
    
    
    1,696
    
    
    
    1,211Other current liabilities
    
    
    7,635
    
    
    
    9,338Total Current Liabilities
    
    
    22,595
    
    
    
    40,766Long-term debt
    
    
    934,774
    
    
    
    884,999Other liabilities
    
    
    15,077
    
    
    
    9,196Deferred income taxes
    
    
    122,374
    
    
    
    246,700Total liabilities
    
    
    1,094,820
    
    
    
    1,181,661Stockholders (deficit) equityCommon stock  Voting $.01 par
value, authorized 1,000 shares and issued 100 shares
    
    
    
    
    
    
    Additional paid-in capital
    
    
    299,928
    
    
    
    299,928Accumulated deficit
    
    
    (729,526
    )
    
    
    (203,897
    )Total stockholders (deficit) equity
    
    
    (429,598
    )
    
    
    96,031Total liabilities and stockholders (deficit) equity
    
    $
    665,222
    
    
    $
    1,277,692
  F-5




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##### Table of Contents



CMP SUSQUEHANNA RADIO HOLDINGS CORP. AND SUBSIDIARIES (Radio Holdings)
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (Predecessor)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
 Radio Holdings
    
    
    
    PredecessorYear Ended
    
    
    Through May 5
    
    
    
    January 1December 31,
    
    
    December 31,
    
    
    
    Through May 4,2008
    
    
    2007
    
    
    2006
    
    
    
    2006Net revenues
    
    $
    203,412
    
    
    $
    223,437
    
    
    $
    155,607
    
    
    
    $
    65,987Operating expenses:Station operating expense excluding
depreciation amortization and including
non-cash contract termination costs of
$6,723 for the period May 5, 2006
through December 31, 2006
    
    
    119,970
    
    
    
    123,388
    
    
    
    91,870
    
    
    
    
    49,510Corporate general and administrative
expenses
    
    
    7,152
    
    
    
    7,214
    
    
    
    4,106
    
    
    
    
    31,029Depreciation and amortization, including
pre-sold advertising amortization of
$23,023 for the period May 5, 2006
through December 31, 2006
    
    
    7,353
    
    
    
    10,393
    
    
    
    30,798
    
    
    
    
    2,421(Gain) loss on sale of assets
    
    
    (6
    )
    
    
    96
    
    
    
    
    
    
    
    
    Costs related to sale of business, principally
advisory fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,513Impairment of goodwill and intangible assets
    
    
    669,786
    
    
    
    188,019
    
    
    
    
    
    
    
    
    Impairment of long-term investment
    
    
    2,991
    
    
    
    5,509
    
    
    
    
    
    
    
    
    Total operating expenses
    
    
    807,246
    
    
    
    334,619
    
    
    
    126,774
    
    
    
    
    97,473Operating income (loss) from continuing
operations
    
    
    (603,834
    )
    
    
    (111,182
    )
    
    
    28,833
    
    
    
    
    (31,486
    )Non-operating income (expense) from
continuing operations:Interest expense, net
    
    
    (65,309
    )
    
    
    (78,509
    )
    
    
    (54,061
    )
    
    
    
    (4,638
    )Gain (loss) on early extinguishment of debt
    
    
    20,935
    
    
    
    1,258
    
    
    
    
    
    
    
    
    (6,492
    )Other income (expense)
    
    
    (9
    )
    
    
    (323
    )
    
    
    (1,655
    )
    
    
    
    Loss from continuing operations
before income taxes and minority
interest
    
    
    (648,217
    )
    
    
    (188,756
    )
    
    
    (26,883
    )
    
    
    
    (42,616
    )Provision (benefit) for income taxes
    
    
    (122,588
    )
    
    
    (3,466
    )
    
    
    (8,276
    )
    
    
    
    (16,640
    )Minority interest income (expense)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,368
    )Loss from continuing operations
    
    $
    (525,629
    )
    
    $
    (185,290
    )
    
    $
    (18,607
    )
    
    
    $
    (27,344
    )Discontinued operations:Income from operations of
discontinued operations (including
gain on sale of $498,387 in 2006)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    502,718Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (195,647
    )Minority interest income (expense)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (73,966
    )Income on discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    233,105Net (loss) income
    
    $
    (525,629
    )
    
    $
    (185,290
    )
    
    $
    (18,607
    )
    
    
    $
    205,761
  F-6




---



##### Table of Contents



CMP SUSQUEHANNA RADIO HOLDINGS CORP. AND SUBSIDIARIES (Radio Holdings)
For the years ended December 31, 2008, 2007, and for the period May 5, 2006 through December 31, 2006
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (Predecessor)
For the period January 1, 2006 through May 4, 2006
CONSOLIDATED STATEMENTS OF STOCKHOLDERS (DEFICIT) EQUITY AND COMPREHENSIVE
INCOME (LOSS)
(Dollars in thousands)
 RetainedAdditional
    
    
    Earnings
    
    
    Accumulated
    
    
    Unearned
    
    
    TotalCommon
    
    
    Paid-In
    
    
    (Accumulated
    
    
    Comprehensive
    
    
    ESOP
    
    
    StockholderssStock
    
    
    Capital
    
    
    Deficit)
    
    
    Income (Loss)
    
    
    Shares
    
    
    (Deficit) EquityPredecessorBalance as of January 1, 2006
    
    $
    268
    
    
    $
    162,197
    
    
    $
    45,106
    
    
    $
    (8,964
    )
    
    $
    (124,489
    )
    
    $
    74,118Net income
    
    
    
    
    
    
    
    
    
    
    205,761
    
    
    
    
    
    
    
    
    
    
    
    205,761Cash dividends
    
    
    
    
    
    
    
    
    
    
    (268
    )
    
    
    
    
    
    
    
    
    
    
    (268
    )Distribution of net equity in subsidiaries to Trusts
    
    
    
    
    
    
    887
    
    
    
    (129,884
    )
    
    
    8,964
    
    
    
    
    
    
    
    (120,033
    )Purchase of Radio minority interest from control group
    
    
    
    
    
    
    
    
    
    
    (59,959
    )
    
    
    
    
    
    
    
    
    
    
    (59,959
    )ESOP shares repurchased
    
    
    (1
    )
    
    
    (35
    )
    
    
    (22
    )
    
    
    
    
    
    
    
    
    
    
    (58
    )Return of ESOP shares
    
    
    (2
    )
    
    
    (10,558
    )
    
    
    
    
    
    
    
    
    
    
    10,560
    
    
    
    Stock options
    
    
    
    
    
    
    186
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    186Balance as of May 4, 2006
    
    
    265
    
    
    
    152,677
    
    
    
    60,734
    
    
    
    
    
    
    
    (113,929
    )
    
    
    99,747Radio HoldingsEliminate Predecessor balances upon acquisition
    
    
    (265
    )
    
    
    (152,677
    )
    
    
    (60,734
    )
    
    
    
    
    
    
    113,929
    
    
    
    (99,747
    )Subtotal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Contributed capital, net
    
    
    
    
    
    
    299,928
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    299,928Balance as of May 5, 2006
    
    
    
    
    
    
    299,928
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    299,928Net loss
    
    
    
    
    
    
    
    
    
    
    (18,607
    )
    
    
    
    
    
    
    
    
    
    
    (18,607
    )Other comprehensive income:Change in fair value of derivative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    182
    
    
    
    
    
    
    
    182Total comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    (18,607
    )
    
    
    182
    
    
    
    
    
    
    
    (18,425
    )Balance as of December 31, 2006
    
    $
    
    
    
    $
    299,928
    
    
    $
    (18,607
    )
    
    $
    182
    
    
    $
    
    
    
    $
    281,503Net loss
    
    $
    
    
    
    $
    
    
    
    
    (185,290
    )
    
    $
    
    
    
    $
    
    
    
    
    (185,290
    )Other comprehensive income:Change in fair value of derivative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (182
    )
    
    
    
    
    
    
    (182
    )Total comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    (185,290
    )
    
    
    (182
    )
    
    
    
    
    
    
    (185,472
    )Balance as of December 31, 2007
    
    $
    
    
    
    $
    299,928
    
    
    $
    (203,897
    )
    
    $
    
    
    
    $
    
    
    
    $
    96,031Net loss
    
    $
    
    
    
    $
    
    
    
    
    (525,629
    )
    
    $
    
    
    
    $
    
    
    
    
    (525,629
    )Total comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    (525,629
    )
    
    
    
    
    
    
    
    
    
    
    (525,629
    )Balance as of December 31, 2008
    
    $
    
    
    
    $
    299,928
    
    
    $
    (729,526
    )
    
    $
    
    
    
    $
    
    
    
    $
    (429,598
    )
  F-7




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##### Table of Contents



CMP SUSQUEHANNA RADIO HOLDINGS CORP. AND SUBSIDIARIES (Radio Holdings)
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (Predecessor)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
 Radio Holdings
    
    
    
    PredecessorYear Ended
    
    
    May 5 Through
    
    
    
    January 1December 31,
    
    
    December 31,
    
    
    
    to May 4,2008
    
    
    2007
    
    
    2006
    
    
    
    2006Cash flows from operating activities:Net (loss) income
    
    $
    (525,629
    )
    
    $
    (185,290
    )
    
    $
    (18,607
    )
    
    
    $
    205,761Adjustments to reconcile net (loss) income to net
cash provided by (used in) operating activities:Depreciation and amortization
    
    
    7,353
    
    
    
    10,393
    
    
    
    30,798
    
    
    
    
    15,143Amortization debt issue costs
    
    
    3,256
    
    
    
    4,244
    
    
    
    2,303
    
    
    
    
    197Radio Employee Stock Plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    118Provision for doubtful accounts
    
    
    2,117
    
    
    
    351
    
    
    
    1,497
    
    
    
    
    (Gain)/Loss on extinguishment of debt
    
    
    (20,935
    )
    
    
    (1,258
    )
    
    
    
    
    
    
    
    6,492Non-cash contract termination charge
    
    
    
    
    
    
    
    
    
    
    6,723
    
    
    
    
    Deferred income taxes
    
    
    (124,327
    )
    
    
    (4,177
    )
    
    
    (11,117
    )
    
    
    
    2,633Impairment of long-term investment
    
    
    2,991
    
    
    
    5,509
    
    
    
    
    
    
    
    
    Impairment of goodwill and intangibles
    
    
    669,786
    
    
    
    188,019
    
    
    
    
    
    
    
    
    SusQtech and Pfaltzgraff
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (498,528
    )Loss (gain) on sale of assets or stations
    
    
    (6
    )
    
    
    96
    
    
    
    
    
    
    
    
    Minority Interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,334Change in
the fair value of derivative instruments
    
    
    5,944
    
    
    
    
    
    
    
    
    
    
    
    
    Changes in assets and liabilities:Accounts receivable
    
    
    6,573
    
    
    
    1,420
    
    
    
    (8,386
    )
    
    
    
    825Prepaid expenses and other current assets
    
    
    (1,073
    )
    
    
    1,338
    
    
    
    1,754
    
    
    
    
    (8,694
    )Accounts payable and other accrued expenses
    
    
    (10
    )
    
    
    (6,338
    )
    
    
    15,866
    
    
    
    
    16,835Other liabilities
    
    
    (63
    )
    
    
    598
    
    
    
    1,875
    
    
    
    
    (20,125
    )Net cash provided by (used in) operating activities
    
    
    25,977
    
    
    
    14,905
    
    
    
    22,706
    
    
    
    
    (204,009
    )Cash flows from investing activities:Purchase of property, plant and equipment, net
    
    
    (1,336
    )
    
    
    (1,573
    )
    
    
    (472
    )
    
    
    
    (8,522
    )Proceeds from sale of assets or radio stations
    
    
    2,460
    
    
    
    
    
    
    
    
    
    
    
    
    (Acquisitions) dispositions
    
    
    (4
    )
    
    
    192
    
    
    
    (1,220,043
    )
    
    
    
    728,328Purchase accounting adjustment
    
    
    
    
    
    
    322
    
    
    
    
    
    
    
    
    Net cash provided by (used in) investing activities
    
    
    1,120
    
    
    
    (1,059
    )
    
    
    (1,220,515
    )
    
    
    
    719,806
  F-8




---



##### Table of Contents



CMP SUSQUEHANNA RADIO HOLDINGS CORP. AND SUBSIDIARIES (Radio Holdings)
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (Predecessor)
CONSOLIDATED STATEMENTS OF CASH FLOWS  (Continued)
(Dollars in thousands)
 Radio Holdings
    
    
    
    PredecessorYear Ended
    
    
    May 5 Through
    
    
    
    January 1December 31,
    
    
    December 31,
    
    
    
    to May 4,2008
    
    
    2007
    
    
    2006
    
    
    
    2006Cash flows from financing activities:Increase in cash overdrafts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,214Proceeds from bank facilities
    
    
    
    
    
    
    
    
    
    
    700,000
    
    
    
    
    (466,219
    )Subordinated debt
    
    
    
    
    
    
    (5,849
    )
    
    
    250,000
    
    
    
    
    Increase in revolving credit facilities
    
    
    108,680
    
    
    
    14,000
    
    
    
    
    
    
    
    
    113,200Repurchase of senior notes
    
    
    (32,486
    )
    
    
    
    
    
    
    
    
    
    
    
    Repayment of credit facilities
    
    
    (22,000
    )
    
    
    (28,000
    )
    
    
    (18,500
    )
    
    
    
    Capital contributions
    
    
    
    
    
    
    
    
    
    
    299,928
    
    
    
    
    Payment of debt issuance costs
    
    
    
    
    
    
    
    
    
    
    (25,721
    )
    
    
    
    Repurchase of ESOP shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (58
    )Proceeds from stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    186Payment of dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (268
    )Distribution of cash accounts to Trusts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48,579
    )Purchase of minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (123,610
    )Net cash provided by (used in) financing activities
    
    
    54,194
    
    
    
    (19,849
    )
    
    
    1,205,707
    
    
    
    
    (523,134
    )Net increase (decrease) in cash and cash equivalents
    
    
    81,291
    
    
    
    (6,003
    )
    
    
    7,898
    
    
    
    
    (7,337
    )Cash and cash equivalents, beginning of period
    
    
    1,895
    
    
    
    7,898
    
    
    
    
    
    
    
    
    7,337Cash and cash equivalents, end of period
    
    $
    83,186
    
    
    $
    1,895
    
    
    $
    7,898
    
    
    
    $
    Supplemental disclosures of cash flow informationInterest paid
    
    $
    56,482
    
    
    $
    77,174
    
    
    $
    44,017
    
    
    
    $
    17,309Taxes paid
    
    
    1,767
    
    
    
    1,800
    
    
    
    
    
    
    
    
    219,600Non-cash distribution to Trusts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81,305
  F-9




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##### Table of Contents



CMP SUSQUEHANNA RADIO HOLDINGS CORP. AND SUBSIDIARIES (Radio Holdings)
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (Predecessor)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Formation, Nature of Operations and Financial Statement Presentation
 Formation and Nature of Operations of CMP Susquehanna Radio Holdings Corp.
    Nature of Operations and Sales of Businesses of Susquehanna Pfaltzgraff Co.
    F-10




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##### Table of Contents



Liquidity
Considerations
    Financial Statement Presentation
  Change in Entity
   2. Significant Accounting Policies
 Principles of Consolidation
  Reportable Segment
  Reclassification
  F-11




---



##### Table of Contents



Use of Estimates
  Cash and Cash Equivalents
  Accounts Receivable and Concentration of Credit Risks
   Property, Plant and Equipment
   Capitalized Software Costs
 Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use
 F-12




---



##### Table of Contents



Accounting for National Advertising Agency Contract
   
    
    A $6.7 million non-cash charge recorded by the Company related to the termination of
its contract with the Companys former national advertising agent in 2006.
    
    Potential commission rebates from Katz should national revenue not meet certain targets
for certain periods during the contract term. These amounts are measured annually with
settlement to occur shortly thereafter. The rebate amounts currently deemed probable of
settlement relate to the first two years of the contract.
 
    
    Potential additional commissions in excess of the base rates if Katz should exceed
certain revenue targets. No additional commission payments have been assumed.
   Fair Values of Financial Instruments
  Impairment of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived
Assets
 F-13




---



##### Table of Contents



Goodwill and Intangible Assets
 Goodwill and Other Intangible Assets Accounting for
Impairment or Disposal of Long-Lived Assets.
  Impairment of Goodwill and Indefinite Life Intangible Assets
 Goodwill and Other Intangible Assets,
 Derivative Financial Instruments
 Accounting for Derivative Instruments and Hedging Activities,
 Debt Issuance Costs
  Revenue Recognition
 Revenue Recognition.
 F-14




---



##### Table of Contents



Trade Agreements
  Station Operating Expenses
  Advertising
  Comprehensive Income
 Reporting Comprehensive Income
 Income Taxes
 Accounting for Income Taxes. Accounting for Uncertainty in Income Taxes,
and Related Implementation Issues,
  Extinguishment of Debt
 Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections
 F-15




---



##### Table of Contents



Recent Accounting Pronouncements
 SFAS No. 141(R). Business Combinations
 SFAS 157. Fair Value Measurements
 SFAS 159. The Fair Value Option for Financial
Assets and Financial Liabilities  Including an Amendment of FASB Statement No. 115
 Noncontrolling Interests in
Consolidated Financial Statements  an amendment of ARB No. 51 ( ),
 SFAS 161. Disclosures about Derivative
Instruments and Hedging Activities Accounting
for Derivative Instruments and Hedging Activities
 FSP No. 142-3. Determination of the Useful Lives of Intangible Assets
 FSP FAS 157-3.
 F-16




---



##### Table of Contents



FSP FAS 140-4 and FIN 46R-8. Disclosures by
Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable
Interest Entities Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities-a replacement of FASB Statement No. 125 , ( ) Consolidation of Variable Interest Entities (revised December
2003)an interpretation of ARB No. 51 .
 3. Discontinued Operations of the Predecessor
  2006
    2006Revenues from discontinued operations
    
    $
    70,394Interest expense, net
    
    
    6,065
  2006Gain on disposal of businesses included in discontinued
operations before income taxes and minority interests
    
    $
    498,387Income taxes related to gain on disposal of businesses included
in discontinued operations
    
    
    (194,371
    )Gain on disposal of business, net
    
    
    304,016
 F-17




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##### Table of Contents



4. Property, Plant and Equipment
  EstimatedUseful Life
    

    2008
    

    2007Land
    
    
    
    
    
    $
    6,129
    
    
    $
    6,257Machinery and equipment
    
    
    3 to 20 years
    
    
    
    32,015
    
    
    
    31,129Buildings and improvements
    
    
    10 to 40 years
    
    
    
    7,896
    
    
    
    7,790Construction in progress
    
    
    
    
    
    
    375
    
    
    
    75546,415
    
    
    
    45,931Less accumulated depreciation
    
    
    
    
    
    
    (15,341
    )
    
    
    (9,428
    )$
    31,074
    
    
    $
    36,503
  5. Long-term Debt
  2008
    

    20079.875% Senior subordinated notes
    
    $
    187,594
    
    
    $
    242,659Term loan
    
    
    657,500
    
    
    
    664,500Revolver
    
    
    96,680
    
    
    
    3,000Total
    
    $
    941,774
    
    
    $
    910,159Less amounts payable within one year
    
    
    7,000
    
    
    
    25,160$
    934,774
    
    
    $
    884,999
  2009
    
    $
    7,0002010
    
    
    7,0002011
    
    
    7,0002012
    
    
    103,6802013
    
    
    629,500Thereafter
    
    
    187,594$
    941,774
 F-18




---



##### Table of Contents



F-19




---



##### Table of Contents




    
    a maximum total leverage ratio;
    
    a minimum leverage ratio; and
    
    a limit on annual capital expenditures.
  CovenantRequirementMaximum total leverage ratio
    
    
    10.50Interest coverage ratio
    
    
    1.15
  Fiscal Year
    
    March 31
    

    June 30
    

    September 30
    
    December 312009
    
    
    10.25:1
    
    
    
    10.25:1
    
    
    
    10.00:1
    
    
    
    9.50:12010
    
    
    9.50:1
    
    
    
    9.25:1
    
    
    
    9.00:1
    
    
    
    8.75:12011
    
    
    8.50:1
    
    
    
    8.25:1
    
    
    
    8.00:1
    
    
    
    7.75:12012
    
    
    7.50:1
    
    
    
    7.50:1
    
    
    
    7.00:1
    
    
    
    6.75:12013
    
    
    6.75:1
    
    
    
    6.75:1
    
    
    
    6.75:1
    
    
    
    6.75:1
     F-20




---



##### Table of Contents



Early Extinguishment of Debt
     Predecessor
  6. Derivative Financial Instruments
  2008 Swap
   F-21




---



##### Table of Contents



2006 Swap
     7. Fair Value Measurements
 Disclosures about Fair Value of
Financial Instruments
    F-22




---



##### Table of Contents



Value Measurement at Reporting Date UsingQuoted Prices
    
    
    Significant Other
    
    
    SignificantTotal
    
    
    in Active Markets
    
    
    Observable Inputs
    
    
    Unobservable InputsFair Value
    

    (Level 1)
    
    (Level 2)
    
    (Level 3)LiabilitiesInterest Rate Swap
    
    $
    (5,944
    )
    
    $
    
    
    
    $
    (5,944
    )
    
    $
    Total Liabilities
    
    $
    (5,944
    )
    
    $
    
    
    
    $
    (5,944
    )
    
    $
    
 Interest Rate Swap.
  8. Income Taxes
  Radio Holdings
    
    
    
    PredecessorYear ended
    
    
    May 5 Through
    
    
    
    January 1December 31,
    
    
    December 31,
    
    
    
    Though May 4,2008
    
    2007
    

    2006
    
    
    
    2006Current:Federal
    
    $
    193
    
    
    $
    (500
    )
    
    $
    558
    
    
    
    $
    4,839State
    
    
    1,546
    
    
    
    1,211
    
    
    
    2,283
    
    
    
    
    854Total current
    
    
    1,739
    
    
    
    711
    
    
    
    2,841
    
    
    
    
    5,693Deferred:Federal
    
    
    (103,014
    )
    
    
    (3,549
    )
    
    
    (9,547
    )
    
    
    
    (18,983
    )State
    
    
    (20,342
    )
    
    
    (628
    )
    
    
    (1,570
    )
    
    
    
    (3,350
    )State tax rate changes
    
    
    (971
    )
    
    
    
    
    
    
    
    
    
    
    
    Total deferred
    
    
    (124,327
    )
    
    
    (4,177
    )
    
    
    (11,117
    )
    
    
    
    (22,333
    )Income tax expense (benefit)
    
    $
    (122,588
    )
    
    $
    (3,466
    )
    
    $
    (8,276
    )
    
    
    $
    (16,640
    )
  F-23




---



##### Table of Contents



Radio Holdings
    
    
    
    PredecessorYear Ended
    
    
    May 5 Through
    
    
    
    January 1December 31,
    
    
    December 31,
    
    
    
    Though May 4,2008
    
    
    2007
    
    
    2006
    
    
    
    2006U.S. statutory rate
    
    $
    (226,876
    )
    
    $
    (66,065
    )
    
    $
    (9,423
    )
    
    
    $
    (14,916
    )State income taxes, net of
Federal income tax effect
    
    
    (12,328
    )
    
    
    (8,412
    )
    
    
    420
    
    
    
    
    (1,622
    )Change in state tax rates
    
    
    (971
    )
    
    
    
    
    
    
    
    
    
    
    
    Permanent differences/Other
    
    
    (44
    )
    
    
    738
    
    
    
    727
    
    
    
    
    (102
    )Impairment charge
    
    
    115,563
    
    
    
    52,941
    
    
    
    
    
    
    
    
    Increase in valuation allowance
    
    
    2,068
    
    
    
    17,332
    
    
    
    
    
    
    
    
    Income tax expense (benefit)
    
    $
    (122,588
    )
    
    $
    (3,466
    )
    
    $
    (8,276
    )
    
    
    $
    (16,640
    )
 F-24




---



##### Table of Contents



2008
    
    2007Current deferred tax assets:Accounts receivable
    
    $
    487
    
    
    $
    404Accrued expenses and other
    
    
    650
    
    
    
    514Current deferred tax assets
    
    
    1,137
    
    
    
    918Less: valuation allowance
    
    
    (1,137
    )
    
    
    (918
    )Net current deferred tax assets
    
    
    
    
    
    
    Non-current deferred tax assets:Intangibles & others
    
    
    9,034
    
    
    
    12,167Other liabilities
    
    
    8,658
    
    
    
    6,222Net operating loss and other carryforwards
    
    
    21,871
    
    
    
    21,632Noncurrent deferred tax assets
    
    
    39,563
    
    
    
    40,021Less: valuation allowance
    
    
    (35,017
    )
    
    
    (33,035
    )Net noncurrent deferred tax assets
    
    
    4,546
    
    
    
    6,986Noncurrent deferred tax liabilities:Tangible
assets, primarily property & equipment
    
    
    2,780
    
    
    
    4,313Intangible assets
    
    
    122,374
    
    
    
    246,700Other liabilities
    
    
    1,766
    
    
    
    2,673Noncurrent deferred tax liabilities
    
    
    126,920
    
    
    
    253,686Net noncurrent deferred tax liabilities
    
    
    122,374
    
    
    
    246,700Net deferred tax liabilities
    
    $
    122,374
    
    
    $
    246,700
     F-25




---



##### Table of Contents



9. Acquisitions and Dispositions
 2008
  2007
  2006
 Acquisition of Predecessor
  F-26




---



##### Table of Contents



Purchase price
    
    $
    1,207,991Acquisition costs
    
    
    12,052Total purchase price consideration
    
    $
    1,220,043Allocated to:Current assets
    
    
    (47,776
    )Property, plant, and equipment, net
    
    
    (44,081
    )Broadcast licenses, non-amortizable
    
    
    (795,572
    )Other intangible assets, amortizable
    
    
    (37,611
    )Investments and other assets (including
assets held for sale of $13,500)
    
    
    (17,640
    )Current liabilities and long-term liabilities
    
    
    6,293Income tax holdback
    
    
    5,692Deferred income taxes
    
    
    260,815Allocation of excess purchase price over the assets acquired
    
    $
    550,163
  (In thousands)2006Net revenues
    
    $
    223,109Loss before cumulative effect of change in accounting
principle
    
    
    (65,205
    )Net loss
    
    $
    (65,205
    )
     F-27




---



##### Table of Contents



F-28




---



##### Table of Contents



10. Goodwill and Intangible Assets
  Year EndedDecember 31,2008
    

    2007Indefinite-lived, at carrying value:Federal Communications Commission licenses
    
    $
    406,767
    
    
    $
    745,265Goodwill
    
    
    79,700
    
    
    
    412,795Subtotal
    
    
    486,467
    
    
    
    1,158,060Definite-lived favorable transmitter leases
    
    
    2,413
    
    
    
    2,413Other, primarily pre-sold advertising and talent
agreements
    
    
    35,198
    
    
    
    35,19837,611
    
    
    
    37,611Less accumulated amortization
    
    
    (32,972
    )
    
    
    (31,741
    )Subtotal
    
    
    4,639
    
    
    
    5,870$
    491,106
    
    
    $
    1,163,930
   Years ended December 31,2009
    
    $
    6942010
    
    
    5302011
    
    
    4652012
    
    
    4612013
    
    
    454Thereafter
    
    
    2,035$
    4,639
   F-29




---



##### Table of Contents



Goodwill
     Indefinite-Lived Intangibles
  Broadcast Licenses
   F-30




---



##### Table of Contents



11. Other Current Liabilities
  2008
    

    2007Accrued employee-related costs
    
    $
    839
    
    
    $
    1,242Deferred revenue
    
    
    136
    
    
    
    104Accrued real estate costs
    
    
    432
    
    
    
    360Accrued external commissions
    
    
    1,762
    
    
    
    2,034Trade expense
    
    
    218
    
    
    
    246Accrued advertising fees
    
    
    
    
    
    
    1,069Accrued professional fees
    
    
    134
    
    
    
    588Other accrued expenses
    
    
    4,114
    
    
    
    3,695$
    7,635
    
    
    $
    9,338
 12. Lease Commitments
  Years ended December 31,2009
    
    $
    4,9052010
    
    
    4,7142011
    
    
    3,6282012
    
    
    2,9562013
    
    
    2,849Thereafter
    
    
    9,552$
    28,604
 13. Commitments and Contingencies
  F-31




---



##### Table of Contents



14. Subsequent Event
  F-32




---



##### Table of Contents



15. Guarantor and Non Guarantor Financial Information
   F-33




---



##### Table of Contents



CMP Susquehanna Radio
    
    
    CMPHoldings Corp.
    
    
    Susquehanna(Parent
    
    
    Corp
    
    
    GuarantorGuarantor)
    
    (Issuer)
    

    Subsidiaries
    
    Eliminations
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    
    
    
    $
    83,186
    
    
    $
    
    
    
    $
    83,186Accounts receivable, net
    
    
    
    
    
    
    
    
    
    
    38,580
    
    
    
    
    
    
    
    38,580Inter-company receivable
    
    
    
    
    
    
    758,408
    
    
    
    3,175,109
    
    
    
    (3,933,517
    )
    
    
    Prepaid expenses and other current assets
    
    
    
    

    
    
    
    
    
    
    3,246
    
    
    
    
    
    
    
    3,246Total current assets
    
    
    
    
    
    
    758,408
    
    
    
    3,300,121
    
    
    
    (3,933,517
    )
    
    
    125,012Property, plant and equipment, net
    
    
    
    
    
    
    
    
    
    
    31,074
    
    
    
    
    
    
    
    31,074Intangible assets, net
    
    
    
    
    
    
    
    
    
    
    491,106
    
    
    
    
    
    
    
    491,106Deferred financing costs, net
    
    
    
    
    
    
    14,030
    
    
    
    
    
    
    
    
    
    
    
    14,030Long Term Investments
    
    
    
    
    
    
    
    
    
    
    4,000
    
    
    
    
    
    
    
    4,000Intercompany Investment
    
    
    (429,598
    )
    
    
    
    
    
    
    
    
    
    
    429,598
    
    
    
    Total assets
    
    $
    (429,598
    )
    
    $
    772,438
    
    
    $
    3,826,301
    
    
    $
    (3,503,919
    )
    
    $
    665,222LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    
    
    
    $
    2,873
    
    
    $
    
    
    
    $
    2,873Current portion of long-term debt
    
    
    
    
    
    
    7,000
    
    
    
    
    
    
    
    
    
    
    
    7,000Accrued interest
    
    
    
    
    
    
    3,391
    
    
    
    
    
    
    
    
    
    
    
    3,391Accrued state income taxes
    
    
    
    
    
    
    
    
    
    
    1,696
    
    
    
    
    
    
    
    1,696Intercompany payable
    
    
    
    
    
    
    
    
    
    
    3,933,517
    
    
    
    (3,933,517
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    
    
    
    
    7,635
    
    
    
    
    
    
    
    7,635Total Current Liabilities
    
    
    
    
    
    
    10,391
    
    
    
    3,945,721
    
    
    
    (3,933,517
    )
    
    
    22,595Long-term debt
    
    
    
    
    
    
    934,774
    
    
    
    
    
    
    
    
    
    
    
    934,774Other liabilities
    
    
    
    
    
    
    5,944
    
    
    
    9,133
    
    
    
    
    
    
    
    15,077Deferred income taxes
    
    
    
    
    
    
    (27,014
    )
    
    
    149,388
    
    
    
    
    
    
    
    122,374Total liabilities
    
    
    
    
    
    
    924,095
    
    
    
    4,104,242
    
    
    
    (3,933,517
    )
    
    
    1,094,820Stockholders equityCommon stock  Voting $.01 par
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    value, authorized 1,000 shares and issued 100 shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    299,928
    
    
    
    
    
    
    
    299,928
    
    
    
    (299,928
    )
    
    
    299,928Retained earnings (accumulated deficit)
    
    
    (729,526
    )
    
    
    (151,657
    )
    
    
    (577,869
    )
    
    
    729,526
    
    
    
    (729,526
    )Total stockholders equity
    
    
    (429,598
    )
    
    
    (151,657
    )
    
    
    (277,941
    )
    
    
    429,598
    
    
    
    (429,598
    )Total liabilities and stockholders equity
    
    $
    (429,598
    )
    
    $
    772,438
    
    
    $
    3,826,301
    
    
    $
    (3,503,919
    )
    
    $
    665,222
 F-34




---



##### Table of Contents



CMP Susquehanna Radio
    
    
    CMPHoldings Corp.
    
    
    Susquehanna(Parent
    
    
    Corp
    
    
    GuarantorGuarantor)
    

    (Issuer)
    

    Subsidiaries
    

    Eliminations
    

    ConsolidatedNet revenues
    
    $
    
    
    
    $
    
    
    
    $
    203,412
    
    
    $
    
    
    
    $
    203,412Operating expenses:Station operating expense excluding
depreciation amortization
    
    
    
    
    
    
    
    
    
    
    119,970
    
    
    
    
    
    
    
    119,970Corporate general and administrative expenses
    
    
    
    
    
    
    
    
    
    
    7,152
    
    
    
    
    
    
    
    7,152Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    7,353
    
    
    
    
    
    
    
    7,353(Gain) Loss on sale of assets
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    (6
    )Impairment of goodwill and intangible assets
    
    
    
    
    
    
    
    
    
    
    669,786
    
    
    
    
    
    
    
    669,786Impairment of long-term investment
    
    
    
    
    
    
    
    
    
    
    2,991
    
    
    
    
    
    
    
    2,991Total operating expenses
    
    
    
    
    
    
    
    
    
    
    807,246
    
    
    
    
    
    
    
    807,246Operating income (loss) from continuing operations
    
    
    
    
    
    
    
    
    
    
    (603,834
    )
    
    
    
    
    
    
    (603,834
    )Non-operating income (expense) from continuing operations:Interest expense, net
    
    
    
    
    
    
    (65,530
    )
    
    
    221
    
    
    
    
    
    
    
    (65,309
    )Gain (Loss) on early extinguishment of debt
    
    
    
    
    
    
    20,935
    
    
    
    
    
    
    
    
    
    
    
    20,935Other income (expense)
    
    
    (525,629
    )
    
    
    
    
    
    
    (9
    )
    
    
    525,629
    
    
    
    (9
    )Income (loss) from continuing operations
before income taxes and minority interest
    
    
    (525,629
    )
    
    
    (44,595
    )
    
    
    (603,622
    )
    
    
    525,629
    
    
    
    (648,217
    )Provision (benefit) for income taxes
    
    
    
    
    
    
    (8,428
    )
    
    
    (114,160
    )
    
    
    
    
    
    
    (122,588
    )Earnings (loss) from continuing operations
    
    $
    (525,629
    )
    
    $
    (36,167
    )
    
    $
    (489,462
    )
    
    $
    525,629
    
    
    
    (525,629
    )
 F-35




---



##### Table of Contents



CMP Susquehanna Radio
    
    
    CMPHoldings Corp.
    
    
    Susquehanna(Parent
    
    
    Corp.
    
    
    GuarantorGuarantor)
    

    (Issuer)
    

    Subsidiaries
    

    Eliminations
    

    ConsolidatedNet cash
provided by (used in) operating activities
    
    
    
    
    
    
    (54,194
    )
    
    
    80,171
    
    
    
    
    
    
    
    25,977Cash flows from investing activities:Purchase of property, plant and equipment, net
    
    
    
    
    
    
    
    
    
    
    (1,336
    )
    
    
    
    
    
    
    (1,336
    )Proceeds from sales of assets or radio stations
    
    
    
    
    
    
    
    
    
    
    2,460
    
    
    
    
    
    
    
    2,460(Acquisitions) dispositions
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )Net cash provided by (used in) investing activities
    
    
    
    
    
    
    
    
    
    
    1,120
    
    
    
    
    
    
    
    1,120Cash flows from financing activities:Subordinated debt
    
    
    
    
    
    
    (32,486
    )
    
    
    
    
    
    
    
    
    
    
    (32,486
    )Increase in revolving credit facilities
    
    
    
    
    
    
    108,680
    
    
    
    
    
    
    
    
    
    
    
    108,680Repayment of credit facilities
    
    
    
    
    
    
    (22,000
    )
    
    
    
    
    
    
    
    
    
    
    (22,000
    )Net cash provided by (used in) by financing activities
    
    
    
    
    
    
    54,194
    
    
    
    
    
    
    
    
    
    
    
    54,194Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    
    
    
    
    
    
    
    
    81,291
    
    
    
    
    
    
    
    81,291Cash and Cash Equivalents, beginning of period
    
    
    
    
    
    
    
    
    
    
    1,895
    
    
    
    
    
    
    
    1,895Cash and Cash Equivalents, end of period
    
    $
    
    
    
    $
    
    
    
    $
    83,186
    
    
    $
    
    
    
    $
    83,186
 F-36




---



##### Table of Contents



CMP SusquehannaRadio HoldingsCorp.
    
    
    CMP Susquehanna(Parent
    
    
    Corp.
    
    
    GuarantorGuarantor)
    
    
    (Issuer)
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    
    
    
    $
    1,895
    
    
    $
    
    
    
    $
    1,895Accounts receivable, net
    
    
    
    
    
    
    
    
    
    
    47,270
    
    
    
    
    
    
    
    47,270Inter-company receivable
    
    
    
    
    
    
    761.729
    
    
    
    2,153,010
    
    
    
    (2,914,739
    )
    
    
    Prepaid expenses and other current assets
    
    
    
    
    
    
    
    
    
    
    2,174
    
    
    
    
    
    
    
    2,174Total current assets
    
    
    
    
    
    
    761,729
    
    
    
    2,204,349
    
    
    
    (2,914,739
    )
    
    
    51,339Property, plant and equipment, net
    
    
    
    
    
    
    
    
    
    
    36,503
    
    
    
    
    
    
    
    36,503Intangible assets, net
    
    
    
    
    
    
    
    
    
    
    1,163,930
    
    
    
    
    
    
    
    1,163,930Deferred financing costs, net
    
    
    
    
    
    
    18,929
    
    
    
    
    
    
    
    
    
    
    
    18,929Long Term Investments
    
    
    
    
    
    
    
    
    
    
    6,991
    
    
    
    
    
    
    
    6,991Intercompany Investment
    
    
    96,031
    
    
    
    
    
    
    
    
    
    
    
    (96,031
    )
    
    
    Total assets
    
    $
    96,031
    
    
    $
    780,658
    
    
    $
    3,411,773
    
    
    $
    (3,010,770
    )
    
    $
    1,277,692LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    
    
    
    $
    483
    
    
    $
    
    
    
    $
    483Current portion of long-term debt
    
    
    
    
    
    
    25,160
    
    
    
    
    
    
    
    
    
    
    
    25,160Accrued interest
    
    
    
    
    
    
    4,574
    
    
    
    
    
    
    
    
    
    
    
    4,574Accrued state income taxes
    
    
    
    
    
    
    
    
    
    
    1,211
    
    
    
    
    
    
    
    1,211Intercompany payable
    
    
    
    
    
    
    
    
    
    
    2,914,739
    
    
    
    (2,914,739
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    
    
    
    
    9,338
    
    
    
    
    
    
    
    9,338Total Current Liabilities
    
    
    
    
    
    
    29,734
    
    
    
    2,925,771
    
    
    
    (2,914,739
    )
    
    
    40,766Long-term debt
    
    
    
    
    
    
    884,999
    
    
    
    
    
    
    
    
    
    
    
    884,999Other liabilities
    
    
    
    
    
    
    
    
    
    
    9,196
    
    
    
    
    
    
    
    9,196Deferred income taxes
    
    
    
    
    
    
    (18,585
    )
    
    
    265,285
    
    
    
    
    
    
    
    246,700Total liabilities
    
    
    
    
    
    
    896,148
    
    
    
    3,200,252
    
    
    
    (2,914,739
    )
    
    
    1,181,661Stockholders equityCommon stock
 Voting $.01 par value, authorized 1,000 shares and issued 100 shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    299,928
    
    
    
    
    
    
    
    299,928
    
    
    
    (299,928
    )
    
    
    299,928Retained earnings (accumulated deficit)
    
    
    (203,897
    )
    
    
    (115,490
    )
    
    
    (88,407
    )
    
    
    203,897
    
    
    
    (203,897
    )Total stockholders equity
    
    
    96,031
    
    
    
    (115,490
    )
    
    
    211,521
    
    
    
    (96,031
    )
    
    
    96,031Total liabilities and stockholders equity
    
    $
    96,031
    
    
    $
    780,658
    
    
    $
    3,411,773
    
    
    $
    (3,010,770
    )
    
    $
    1,277,692
 F-37




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##### Table of Contents



CMP Susquehanna
    
    
    CMPRadio Holdings
    
    
    SusquehannaCorp.
    
    
    Corp.(Parent
    
    
    
    
    
    
    GuarantorGuarantor)
    
    (Issuer)
    

    Subsidiaries
    

    Eliminations
    
    ConsolidatedNet revenues
    
    $
    
    
    
    $
    
    
    
    $
    223,437
    
    
    $
    
    
    
    $
    223,437Operating expenses:Station operating expense excluding depreciation amortization
    
    
    
    
    
    
    
    
    
    
    123,388
    
    
    
    
    
    
    
    123,388Corporate general and administrative expenses
    
    
    
    
    
    
    
    
    
    
    7,214
    
    
    
    
    
    
    
    7,214Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    10,393
    
    
    
    
    
    
    
    10,393Gain (Loss) on sale of assets
    
    
    
    
    
    
    
    
    
    
    96
    
    
    
    
    
    
    
    96Impairment of goodwill and intangible assets
    
    
    
    
    
    
    
    
    
    
    188,019
    
    
    
    
    
    
    
    188,019Impairment of long-term investment
    
    
    
    
    
    
    
    
    
    
    5,509
    
    
    
    
    
    
    
    5,509Total operating expenses
    
    
    
    
    
    
    
    
    
    
    334,619
    
    
    
    
    
    
    
    334,619Operating income (loss) from continuing operations
    
    
    
    
    
    
    
    
    
    
    (111,182
    )
    
    
    
    
    
    
    (111,182
    )Non-operating income (expense) from continuing operations:Interest expense, net
    
    
    
    
    
    
    (78,818
    )
    
    
    309
    
    
    
    
    
    
    
    (78,509
    )Gain (Loss) on early extinguishment of debt
    
    
    
    
    
    
    1,258
    
    
    
    
    
    
    
    
    
    
    
    1,258Other income (expense)
    
    
    (185,290
    )
    
    
    (361
    )
    
    
    38
    
    
    
    185,290
    
    
    
    (323
    )Income (loss) from continuing operations before income taxes and minority interest
    
    
    (185,290
    )
    
    
    (77,921
    )
    
    
    (110,835
    )
    
    
    185,290
    
    
    
    (188,756
    )Provision (benefit) for income taxes
    
    
    
    
    
    
    (1,402
    )
    
    
    (2,064
    )
    
    
    
    
    
    
    (3,466
    )Earnings (loss) from continuing operations
    
    $
    (185,290
    )
    
    $
    (76,519
    )
    
    $
    (108,771
    )
    
    $
    185,290
    
    
    $
    (185,290
    )
 F-38




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##### Table of Contents



CMP SusquehannaRadio Holdings
    
    
    CMPCorp.
    
    
    Susquehanna(Parent
    
    
    Corp.
    
    
    GuarantorGuarantor)
    
    (Issuer)
    
    Subsidiaries
    
    Eliminations
    

    ConsolidatedNet cash
provided by (used in) operating activities
    
    
    
    
    
    
    19,849
    
    
    
    (4,944
    )
    
    
    
    
    
    
    14,905Cash flows from investing activities:Purchase of property, plant and equipment, net
    
    
    
    
    
    
    
    
    
    
    (1,573
    )
    
    
    
    
    
    
    (1,573
    )(Acquisitions) dispositions
    
    
    
    
    
    
    
    
    
    
    192
    
    
    
    
    
    
    
    192Purchase accounting adjustment
    
    
    
    
    
    
    
    
    
    
    322
    
    
    
    
    
    
    
    322Net cash provided by (used in) investing activities
    
    
    
    
    
    
    
    
    
    
    (1,059
    )
    
    
    
    
    
    
    (1,059
    )Cash flows from financing activities:Subordinated debt
    
    
    
    
    
    
    (5,849
    )
    
    
    
    
    
    
    
    
    
    
    (5,849
    )Increase in revolving credit facilities
    
    
    
    
    
    
    14,000
    
    
    
    
    
    
    
    
    
    
    
    14,000Repayment of credit facilities
    
    
    
    
    
    
    (28,000
    )
    
    
    
    
    
    
    
    
    
    
    (28,000
    )Net cash provided by (used in) by financing activities
    
    
    
    
    
    
    (19,849
    )
    
    
    
    
    
    
    
    
    
    
    (19,849
    )Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    
    
    
    
    
    
    
    
    (6,003
    )
    
    
    
    
    
    
    (6,003
    )Cash and Cash Equivalents, beginning of period
    
    
    
    
    
    
    
    
    
    
    7,898
    
    
    
    
    
    
    
    7,898Cash and Cash Equivalents, end of period
    
    $
    
    
    
    $
    
    
    
    $
    1,895
    
    
    $
    
    
    
    $
    1,895
 F-39




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##### Table of Contents



CMPSusquehannaRadio Holdings
    
    
    CMPCorp.
    
    
    Susquehanna(Parent
    
    
    Corp.
    
    
    Guarantor
    
    
    Non-guarantorGuarantor)
    
    
    (Issuer)
    
    
    (Subsidiaries)
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet Revenues
    
    $
    
    
    
    $
    
    
    
    $
    155,607
    
    
    $
    1,097
    
    
    $
    
    
    
    $
    156,704Operating Expenses:Station operating expenses, excluding depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    91,870
    
    
    
    790
    
    
    
    
    
    
    
    92,660Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    4,106
    
    
    
    
    
    
    
    
    
    
    
    4,106Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    30,798
    
    
    
    165
    
    
    
    
    
    
    
    30,963Total operating expenses
    
    
    
    
    
    
    
    
    
    
    126,774
    
    
    
    955
    
    
    
    
    
    
    
    127,729Operating income
    
    
    
    
    
    
    
    
    
    
    28,833
    
    
    
    142
    
    
    
    
    
    
    
    28,975Non-operating income (expense):Interest expense
    
    
    
    
    
    
    (52,771
    )
    
    
    385
    
    
    
    
    
    
    
    
    
    
    
    (52,386
    )Gain (loss) on early extinguishment of debt
    
    
    
    
    
    
    (1,675
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,675
    )Other income (expense), net
    
    
    (18,603
    )
    
    
    (1,708
    )
    
    
    53
    
    
    
    (47
    )
    
    
    18,603
    
    
    
    (1,702
    )Income (loss) from continuing operations before income taxes
and minority interest
    
    
    (18,603
    )
    
    
    (56,154
    )
    
    
    29,271
    
    
    
    95
    
    
    
    18,603
    
    
    
    (26,788
    )Provision
(benefit) for income taxes
    
    
    
    
    
    
    (17,183
    )
    
    
    8,907
    
    
    
    91
    
    
    
    
    
    
    
    (8,185
    )Earnings
(loss) from continuing operations
    
    $
    (18,603
    )
    
    $
    (38,971
    )
    
    $
    20,364
    
    
    $
    4
    
    
    $
    18,603
    
    
    $
    (18,603
    )
 F-40




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##### Table of Contents



CMPSusquehannaRadioHoldings
    
    
    CMPCorp.
    
    
    Susquehanna(Parent
    
    
    Corp.
    
    
    Guarantor
    
    
    Non-guarantorGuarantor)
    
    
    (Issuer)
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet cash
provided by (used in) operating activities
    
    
    
    
    
    
    14,336
    
    
    
    8,370
    
    
    
    (50
    )
    
    
    
    
    
    
    22,656Cash flows from investing activities:Purchase of property, plant and equipment, net
    
    
    
    
    
    
    
    
    
    
    (472
    )
    
    
    
    
    
    
    
    
    
    
    (472
    )(Acquisitions) dispositions
    
    
    (299,928
    )
    
    
    (1,220,043
    )
    
    
    
    
    
    
    
    
    
    
    299,928
    
    
    
    (1,220,043
    )Purchase accounting adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash provided by (used in) investing activities
    
    
    (299,928
    )
    
    
    (1,220,043
    )
    
    
    (472
    )
    
    
    
    
    
    
    299,928
    
    
    
    (1,220,515
    )Cash flows from financing activities:Proceeds from contributed capital
    
    
    299,928
    
    
    
    299,928
    
    
    
    
    
    
    
    
    
    
    
    (299,928
    )
    
    
    299,928Subordinated debt
    
    
    
    
    
    
    250,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250,000Proceeds from bank credit facilities
    
    
    
    
    
    
    700,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    700,000Payments for debt issue costs
    
    
    
    
    
    
    (25,721
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,721
    )Repayment of credit facilities
    
    
    
    
    
    
    (18,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,500
    )Net cash provided by (used in) by financing activities
    
    
    299,928
    
    
    
    1,205,707
    
    
    
    
    
    
    
    
    
    
    
    (299,928
    )
    
    
    1,205,707Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    
    
    
    
    
    
    
    
    7,898
    
    
    
    (50
    )
    
    
    
    
    
    
    7,848Cash and Cash Equivalents, beginning of period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash and Cash Equivalents, end of period
    
    $
    
    
    
    $
    
    
    
    $
    7,898
    
    
    $
    (50
    )
    
    $
    
    
    
    $
    7,848
 F-41




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##### Table of Contents



16. Quarterly Results (Unaudited)
  First
    
    
    Second
    
    
    Third
    
    
    FourthQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterFOR THE YEAR ENDED DECEMBER 31, 2008Net revenue
    
    $
    44,936
    
    
    $
    56,350
    
    
    $
    53,572
    
    
    $
    48,554Operating
income (loss)(1)
    
    
    15,507
    
    
    
    19,435
    
    
    
    17,455
    
    
    
    (656,231
    )Net loss(1)
    
    $
    2,210
    
    
    $
    9,509
    
    
    $
    2,441
    
    
    $
    (540,388
    )FOR THE YEAR ENDED DECEMBER 31, 2007Net revenue
    
    $
    46,127
    
    
    $
    60,051
    
    
    $
    59,814
    
    
    $
    57,445Operating income (loss)(1)
    
    
    15,235
    
    
    
    22,045
    
    
    
    23,000
    
    
    
    (171,462
    )Net income (loss)(1)
    
    $
    (2,328
    )
    
    $
    4,910
    
    
    $
    (2,114
    )
    
    $
    (185,758
    )
 
 (1)
    
    During the fourth quarter of 2007 and 2008, the Company
recorded impairment charges of $188.0 million and $669.8 million,
respectively, related to its annual FAS 142 impairment testing. F-42




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##### Table of Contents



Schedule II
CMP SUSQUEHANNA RADIO HOLDINGS CORP. AND SUBSIDIARIES (Radio Holdings)
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (Predecessor)
(Dollars in thousands, except for share data)
 Balance at
    
    
    
    
    
    
    
    
    
    BalanceBeginning
    
    
    
    
    
    
    
    
    
    at End ofFiscal Year
    
    of Year
    
    Additions
    
    Deductions
    
    YearAllowance for doubtful accounts2008
    
    $
    1,050
    
    
    $
    2,117
    
    
    $
    (1,887
    )
    
    $
    1,2802007
    
    
    1,520
    
    
    
    351
    
    
    
    (821
    )
    
    
    1,0502006 (CMP)
    
    
    578
    
    
    
    1,497
    
    
    
    (555
    )
    
    
    1,5202006 (Predecessor)
    
    
    878
    
    
    
    207
    
    
    
    (507
    )
    
    
    578Valuation allowance on deferred taxes2008
    
    
    33,953
    
    
    
    2,201
    
    
    
    -
    
    
    
    36,154
 F-43