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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 1934
 For the fiscal year ended December 31, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to
 Commission file number 333-143558
 CMP Susquehanna Radio Holdings Corp.
 (Exact Name of Registrant as Specified in Its Charter)
 Delaware
    
    36-4159663(State of Incorporation)
    
    (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:  7 8
 o þ
 o þ
 þ o
 þ
  Large accelerated filer
o
    
    Accelerated filer o
    
    Non-accelerated filer  
þ
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 o þ




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##### 



CMP SUSQUEHANNA RADIO HOLDINGS CORP.
 ANNUAL REPORT ON FORM 10-K
for the Fiscal Year Ended December 31, 2007
 Item
    
    
    
    PageNumber
    
    
    
    NumberIndexPART I1.
    
    Business
    
    11A.
    
    Risk Factors
    
    171B.
    
    Unresolved Staff Comments
    
    232.
    
    Properties
    
    233.
    
    Legal Proceedings
    
    234.
    
    Submission of Matters to a Vote of Security Holders
    
    24PART II5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    246.
    
    Selected Consolidated Financial Data
    
    247.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    267A.
    
    Quantitative and Qualitative Disclosure about Market Risk
    
    378.
    
    Financial Statements and Supplementary Data
    
    379.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    379A.
    
    Controls and Procedures
    
    379B.
    
    Other Information
    
    38PART III10.
    
    Directors and Executive Officers and Corporate Governance
    
    3811.
    
    Executive Compensation
    
    3812.
    
    Security Ownership
of Certain Beneficial Owners and Management & Related Stockholder Matters
    
    3913.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    3914.
    
    Principal Accountant Fees and services
    
    42PART IV15.
    
    Exhibits and Financial Statement Schedules
    
    42SignaturesEX-23.1 CONSENT OF KPMG LLPEX-31.1 SECTION 302 CERTIFICATION OF THE PEOEX-31.2 SECTION 302 CERTIFICATION OF THE PFOEX-32.1 SECTION 906 CERTIFICATION OF THE PEO AND PFO




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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 2007 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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tm tm tm
   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
 3




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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 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
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
base 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 is 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
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
  4




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Acquisition of SPC
      KCHZ Trust
   Industry Overview
  5




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tm tm tm
 Advertising Sales
    6




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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
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tm tm tm
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Employees
   Federal Regulation of Radio Broadcasting
 General.
 License Grant and Renewal.
  Service Areas.
   9




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10




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Frequency
    
    
    
    
    
    Power in
    
    License(FM-MHZ)
    
    FCC
    
    HAAT
    
    Kilowatts
    
    ExpirationMarket and Stations
    
    City of License
    
    (AM-KHZ)
    
    Class
    
    (Meters)
    
    (Day)
    
    DateSan Francisco, CAKNBR  AM
    
    San Francisco
    
    680 KHz
    
    A
    
    
    
    50 KW
    
    December 1, 2013KFOG  FM
    
    San Francisco
    
    104.5 MHz
    
    B
    
    442
    
    7.9 KW
    
    December 1, 2013KFFG  FM
    
    Los Altos
    
    97.7 MHz
    
    A
    
    137
    
    3.2 KW
    
    December 1, 2013KSAN  FM
    
    San Mateo
    
    107.7 MHz
    
    B
    
    354
    
    8.9 KW
    
    December 1, 2013KTCT  AM
    
    San Mateo
    
    1050 KHz
    
    B
    
    
    
    50 KW
    
    December 1, 2013Dallas/Ft. Worth, TXKLIF  AM
    
    Dallas
    
    570 KHz
    
    B
    
    
    
    5 KW
    
    August 1, 2013KTCK  AM
    
    Dallas
    
    1310 KHz
    
    B
    
    
    
    9 KW
    
    August 1, 2013KPLX  FM
    
    Ft. Worth
    
    99.5 MHz
    
    C
    
    511
    
    100 KW
    
    August 1, 2013KDBN  FM
    
    Haltom City
    
    93.3 MHz
    
    C2
    
    120
    
    50 KW
    
    August 1, 2013KTDK  FM
    
    Sanger
    
    104.1 MHz
    
    C3
    
    192
    
    4.1 KW
    
    August 1, 2013KKLF  AM
    
    Richardson
    
    1700 KHz
    
    B
    
    
    
    10 KW
    
    August 1, 2013KIKT  FM
    
    Greenville
    
    1400 KHz
    
    C
    
    NA
    
    1 KW
    
    August 1, 2013KGVL  AM
    
    Greenville
    
    93.5 KHz
    
    A
    
    328
    
    1.8 KW
    
    August 1, 2013Houston, TXKRBE  FM
    
    Houston
    
    104.1 MHz
    
    C
    
    585
    
    100 KW
    
    August 1, 2013Atlanta, GAWNNX  FM
    
    Atlanta
    
    100.5 MHz
    
    C0
    
    340
    
    100 KW
    
    April 1, 2012WWWQ  FM
    
    College Park
    
    99.7 MHz
    
    C2
    
    298
    
    12.5 KW
    
    April 1, 2012Cincinnati, OHWRRM  FM
    
    Cincinnati
    
    98.5 MHz
    
    B
    
    246
    
    18 KW
    
    October 1, 2012WGRR 
FM
    
    Hamilton
    
    103.5 MHz
    
    B
    
    316
    
    11 KW
    
    October 1, 2012WFTK  FM
    
    Lebanon
    
    96.5 MHz
    
    B
    
    247
    
    19.5 KW
    
    October 1, 2012Indianapolis, INWFMS  FM
    
    Indianapolis
    
    95.5 MHz
    
    B
    
    301
    
    13 KW
    
    August 1, 2012WISG  FM
    
    Fishers
    
    93.9 MHz
    
    A
    
    150
    
    2.75 KW
    
    August 1, 2012WJJK  FM
    
    Noblesville
    
    104.5 MHz
    
    B
    
    150
    
    50 KW
    
    August 1, 2012Kansas City, MOKCMO  FM
    
    Kansas City
    
    94.9 MHz
    
    C0
    
    332
    
    100 KW
    
    February 1, 2013KCMO  AM
    
    Kansas City
    
    710 KHz
    
    B
    
    
    
    10 KW
    
    February 1, 2013KCFX  FM
    
    Harrisonville
    
    101.1 MHz
    
    C0
    
    335
    
    100 KW
    
    February 1, 2013KCJK  FM
    
    Garden City
    
    105.1 MHz
    
    C1
    
    349
    
    69 KW
    
    February 1, 2013York, PA(1)WSBA  AM
    
    York
    
    910 KHz
    
    B
    
    
    
    5 KW
    
    August 1, 2014WARM  FM
    
    York
    
    103.3 MHz
    
    B
    
    398
    
    6.4 KW
    
    August 1, 2014WSOX  FM
    
    Red Lion
    
    96.1 MHz
    
    B
    
    290
    
    13.5 KW
    
    August 1, 2014WGLD-AM
    
    Red Lion
    
    1440 KHz
    
    D
    
    
    
    1 KW
    
    August 1, 2014Louisville, KYWAVG  AM
    
    Jeffersonville
    
    1450 KHz
    
    C
    
    
    
    1 KW
    
    August 1, 2012WQKC 
FM
    
    Seymour
    
    93.7 MHz
    
    B
    
    213
    
    25 KW
    
    August 1, 2012WSWD-FM
    
    Fairfield
    
    94.9 MHz
    
    B
    
    322
    
    105 KW
    
    October 1, 2012
 
 (1)
    
    These stations also reach Lancaster, PA. 11




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Regulatory Approvals.
    Ownership
Matters.
       a Report and Order and Order on Reconsideration
 Programming
and Operation.
 12




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Local Marketing Agreements.
  Joint Sales Agreements.
  New Services.
  tm tm tm
 13




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a
Report and Order
  Antitrust and Market Concentration Considerations.
  Directors and Executive Officers
  14




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Name
    
    Age
    
    PositionLewis W. Dickey, Jr.
    
    46
    
    Chairman, President and Chief Executive OfficerMartin R. Gausvik
    
    51
    
    Executive Vice President, Treasurer and Chief Financial OfficerJohn G. Pinch
    
    59
    
    Executive Vice President and Co-Chief Operating OfficerJohn W. Dickey
    
    41
    
    Executive Vice President and Co-Chief Operating OfficerJohn Connaughton
    
    42
    
    DirectorMichael Goody
    
    31
    
    DirectorHolcombe T. Green, Jr.
    
    68
    
    DirectorIan Loring
    
    41
    
    DirectorSoren Oberg
    
    37
    
    DirectorDavid Tolley
    
    40
    
    DirectorKent Weldon
    
    40
    
    Director
 Lewis W. Dickey, Jr. The Franchise  Building Radio Brands
 Martin R. Gausvik
 John G. Pinch
 John W. Dickey
 John Connaughton
 15




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Michael Goody
 Holcombe T. Green, Jr.
 Ian Loring
 Soren Oberg
 David M. Tolley
 Kent R. Weldon
 Environmental
  16




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Intellectual Property
    
 Item 1A. Risk Factors
 Risks Related to Our Business
 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.
  A decrease in our market ratings or market share can adversely affect our revenues.
  17




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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 Radiotm digital radio, which could provide multi-channel,
multi-format digital radio services in the same bandwidth currently occupied by traditional
AM and FM radio services;
    
    low power FM radio, which could result in additional FM radio broadcast stations in
markets where we have stations; and
    
    other digital audio recording and listening devices, such as
iPodstm
    Our results of operations could be adversely affected by a downturn in the U.S. economy or in the
economies of the regions in which we operate.
  18




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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.
  19




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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.
  Because a significant portion of our total assets is represented by intangible assets and goodwill
that is subject to mandatory, annual impairment evaluations, we could in the future be required to
write off a significant portion of these assets, which may adversely affect our financial condition
and results of operations.
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Goodwill and Other Intangible Assets
 Licensing and ownership rules may limit the growth of our radio broadcasting operations.
      21




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a Report and Order
and Order on Reconsideration
 Risks Related to 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;
    
    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;
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
    
    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.
   
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
    
 Item 3. Legal Proceedings
  23




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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
  24




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(Dollars in thousands)Radio Holdings/Radio Holdings
    
    
    
    SPC
    
    
    SPC
    
    
    SPCMay 5, 2006
    
    
    
    January 1, 2006
    
    
    Combined
    
    
    
    
    
    
    YearYear Ended
    
    
    Through
    
    
    
    Through
    
    
    Period
    
    
    
    
    
    
    EndedDecember 31,
    
    
    December 31,
    
    
    
    May 4,
    
    
    December 31,
    
    
    December 31,2007
    
    
    2006
    
    
    
    2006
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003STATEMENT OF OPERATIONS DATA:Net revenues
    
    $
    223,437
    
    
    $
    155,607
    
    
    
    $
    65,987
    
    
    $
    221,594
    
    
    $
    231,587
    
    
    $
    231,058
    
    
    $
    228,966Operating expenses: excluding depreciation,
amortization, and including non-cash contract
termination cost of $6,723 for the period
May 5, 206 through December 31, 2006
    
    
    123,388
    
    
    
    91,870
    
    
    
    
    49,510
    
    
    
    141,380
    
    
    
    152,542
    
    
    
    147,608
    
    
    
    147,748Corporate general and administrative
expenses(1)
    
    
    7,214
    
    
    
    4,106
    
    
    
    
    31,029
    
    
    
    35,135
    
    
    
    24,708
    
    
    
    20,297
    
    
    
    17,917Depreciation and amortization, including
pre-sold advertising amortization of
$23,023 for the period May 5, through
December 31, 2006(2)
    
    
    10,393
    
    
    
    30,798
    
    
    
    
    2,421
    
    
    
    33,219
    
    
    
    7,401
    
    
    
    7,759
    
    
    
    7,691(Gain)/Loss on sale of assets(3)
    
    
    96
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (300
    )
    
    
    (10,151
    )
    
    
    Costs related to sale of business, principally
advisory fees
    
    
    
    
    
    
    
    
    
    
    
    14,513
    
    
    
    14,513
    
    
    
    
    
    
    
    
    
    
    
    Restructuring and Other Charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impairment of goodwill and intangible assets
    
    
    188,019
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total operating expenses
    
    
    329,110
    
    
    
    126,774
    
    
    
    
    97,473
    
    
    
    224,247
    
    
    
    184,351
    
    
    
    165,513
    
    
    
    173,356Operating income (loss) from continuing
operations
    
    
    (105,673
    )
    
    
    28,833
    
    
    
    
    (31,486
    )
    
    
    (2,653
    )
    
    
    47,236
    
    
    
    65,545
    
    
    
    55,610Other income (expense) from continuing
operations:Interest expense(4)
    
    
    (78,509
    )
    
    
    (54,061
    )
    
    
    
    (4,638
    )
    
    
    (58,699
    )
    
    
    (17,141
    )
    
    
    (19,841
    )
    
    
    (18,820
    )Gain (loss)  on early extinguishment of debt(5)
    
    
    1,258
    
    
    
    
    
    
    
    
    (6,492
    )
    
    
    (6,492
    )
    
    
    
    
    
    
    (3,024
    )
    
    
    Impairment of long-term investment
    
    
    (5,509
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    261
    
    
    
    (168
    )Other income (expense)
    
    
    (323
    )
    
    
    (1,655
    )
    
    
    
    
    
    
    
    (1,655
    )
    
    
    
    
    
    
    
    
    
    
    Income (loss) from continuing operations
before income taxes and minority interests
    
    
    (188,756
    )
    
    
    (26,883
    )
    
    
    
    (42,616
    )
    
    
    (69,499
    )
    
    
    30,095
    
    
    
    42,941
    
    
    
    36,622Provision (benefit) for income taxes
    
    
    (3,466
    )
    
    
    (8,276
    )
    
    
    
    (16,640
    )
    
    
    (24,916
    )
    
    
    4,541
    
    
    
    17,543
    
    
    
    15,591Minority interests(6)
    
    
    
    
    
    
    
    
    
    
    
    (1,368
    )
    
    
    (1,368
    )
    
    
    1,795
    
    
    
    (8,507
    )
    
    
    (4,869
    )Earnings (loss) from continuing operations
    
    
    (185,290
    )
    
    
    (18,607
    )
    
    
    
    (27,344
    )
    
    
    (45,951
    )
    
    
    27,349
    
    
    
    16,891
    
    
    
    16,162Discontinued operations:Gain (loss) from operations of discountinued
operations (including gain on sale of
$498,387 in 2006)
    
    
    
    
    
    
    
    
    
    
    
    502,718
    
    
    
    502,718
    
    
    
    (19,659
    )
    
    
    (12,866
    )
    
    
    5,135Proceeds (benefit) for income taxes
    
    
    
    
    
    
    
    
    
    
    
    195,647
    
    
    
    195,647
    
    
    
    (9,765
    )
    
    
    (2,321
    )
    
    
    2,274Minority interest income (expense)
    
    
    
    
    
    
    
    
    
    
    
    (73,966
    )
    
    
    (73,966
    )
    
    
    (1,446
    )
    
    
    (997
    )
    
    
    (1,989
    )Gain (loss) on discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    233,105
    
    
    
    233,105
    
    
    
    (11,340
    )
    
    
    (11,542
    )
    
    
    872Net income (loss)
    
    
    (185,290
    )
    
    
    (18,607
    )
    
    
    
    205,761
    
    
    
    187,154
    
    
    
    16,009
    
    
    
    5,349
    
    
    
    17,034OTHER FINANCIAL DATAStation Operating Income (7)
    
    $
    100,049
    
    
    $
    63,737
    
    
    
    $
    16,477
    
    
    $
    80,214
    
    
    $
    79,045
    
    
    $
    83,450
    
    
    $
    81,218Cash provided by (used in) operating
activities
    
    
    14,905
    
    
    
    22,706
    
    
    
    
    (204,009
    )
    
    
    (179,628
    )
    
    
    60,491
    
    
    
    119,903
    
    
    
    85,126Cash provided by (used in) investing
activities
    
    
    (1,059
    )
    
    
    (1,220,515
    )
    
    
    
    719,806
    
    
    
    (500,709
    )
    
    
    (3,191
    )
    
    
    (169,868
    )
    
    
    (60,129
    )Cash provided by (used) in financing
activities
    
    
    (19,849
    )
    
    
    1,205,707
    
    
    
    
    (523,134
    )
    
    
    680,898
    
    
    
    (56,766
    )
    
    
    45,469
    
    
    
    (19,836
    )BALANCE SHEET DATATotal assets
    
    $
    1,277,692
    
    
    $
    1,494,386
    
    
    
    $
    454,497
    
    
    $
    1,494,386
    
    
    $
    878,796
    
    
    
    *
    *
    
    
    *
    *Long-term debt (including current portion)
    
    
    910,159
    
    
    
    931,500
    
    
    
    
    208,153
    
    
    
    931,500
    
    
    
    255,328
    
    
    
    *
    *
    
    
    *
    *Total stockholders equity
    
    
    96,031
    
    
    
    281,503
    
    
    
    
    99,747
    
    
    
    281,503
    
    
    
    74,118
    
    
    
    *
    *
    
    
    *
    *
 
 **
    
    Not meaningful 25




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##### Table of Contents



(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 are 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 those
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 free cash flows
(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, 2003, 2004, and 2005, the portion of depreciation and amortization attributable to SPCs radio operations was $6.5 million, $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, 2003, 2004, and 2005 was $6.9 million, $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 Acquisition. 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. (Dollars in thousands)Radio Holdings
    
    
    
    SPCYear
    
    
    May 5, 2006
    
    
    
    January 1, 2006
    
    
    YearEnded
    
    
    Through
    
    
    
    Through
    
    
    EndedDecember 31,
    
    
    December 31,
    
    
    
    May 4,
    
    
    December 31,2007
    
    
    2006
    
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Operating income (loss) from continuing operations
    
    $
    (105,673
    )
    
    $
    28,833
    
    
    
    $
    (31,486
    )
    
    $
    47,236
    
    
    $
    65,545
    
    
    $
    55,610Corporate general and administrative expenses
    
    
    7,214
    
    
    
    4,106
    
    
    
    
    31,029
    
    
    
    24,708
    
    
    
    20,297
    
    
    
    17,917Depreciation and amortization
    
    
    10,393
    
    
    
    30,798
    
    
    
    
    2,421
    
    
    
    7,401
    
    
    
    7,759
    
    
    
    7,691(Gain)/Loss on sale of assets
    
    
    96
    
    
    
    
    
    
    
    
    
    
    
    
    (300
    )
    
    
    (10,151
    )
    
    
    Costs related to sale of business principally advisory fees
    
    
    
    
    
    
    
    
    
    
    
    14,513
    
    
    
    
    
    
    
    
    
    
    
    Impairment of goodwill and intangible assets
    
    
    188,019
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Station Operating Income
    
    $
    100,049
    
    
    $
    63,737
    
    
    
    $
    16,477
    
    
    $
    79,045
    
    
    $
    83,450
    
    
    $
    81,218
 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
  26




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##### Table of Contents



Overview of 2007
  Our Business
   tm tm
 tm
  27




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##### Table of Contents



Advertising Revenue and Station Operation Income
 Revenues.
   Results of Operations
  28




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##### Table of Contents



Radio Holdings
    
    
    
    SPC
    
    
    Percent ChangeYear
    
    
    May 5, 2006
    
    
    
    January 1, 2006
    
    
    Year
    
    
    2007
    
    
    CombinedEnded
    
    
    Through
    
    
    
    Through
    
    
    Ended
    
    
    vs.
    
    
    PeriodDecember 31,
    
    
    December 31,
    
    
    
    May 4,
    
    
    December 31,
    
    
    Combined
    
    
    vs.2007
    
    
    2006
    
    
    
    2006
    
    
    2005
    
    
    Period
    
    
    2005Net revenues
    
    $
    223,437
    
    
    $
    155,607
    
    
    
    $
    65,987
    
    
    $
    231,587
    
    
    
    0.8
    %
    
    
    4.3
    %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
    
    
    123,388
    
    
    
    91,870
    
    
    
    
    49,510
    
    
    
    152,542
    
    
    
    12.7
    %
    
    
    7.3
    %Corporate general and administrative
expenses
    
    
    7,214
    
    
    
    4,106
    
    
    
    
    31,029
    
    
    
    24,708
    
    
    
    79.5
    %
    
    
    42.2
    %Depreciation and amortization, including
pre-sold advertising amortization of
$23,023 for the period May 5, 2006 through
December 31, 2006
    
    
    10,393
    
    
    
    30,798
    
    
    
    
    2,421
    
    
    
    7,401
    
    
    
    68.7
    %
    
    
    348.8
    %(Gain)/Loss on sale of assets
    
    
    96
    
    
    
    
    
    
    
    
    
    
    
    
    (300
    )
    
    
    *
    *
    
    
    Costs related to sale of business, principally
advisory fees
    
    
    
    
    
    
    
    
    
    
    
    14,513
    
    
    
    
    
    
    
    100.0
    %
    
    
    *
    *Impairment of goodwill and intangible assets
    
    
    188,019
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    *
    *
    
    
    *
    *Total operating expenses
    
    
    329,110
    
    
    
    126,714
    
    
    
    
    97,473
    
    
    
    184,351
    
    
    
    46.8
    %
    
    
    21.6
    %Operating income (loss) from continuing
operations
    
    
    (105,673
    )
    
    
    28,833
    
    
    
    
    (31,486
    )
    
    
    47,236
    
    
    
    *
    *
    
    
    105.6
    %Non-operating income (expense) from
continuing operations:Interest expense, net
    
    
    (78,509
    )
    
    
    (54,061
    )
    
    
    
    (4,638
    )
    
    
    (17,141
    )
    
    
    33.7
    %
    
    
    242.4
    %Gain (Loss) on early extinguishment of debt
    
    
    1,258
    
    
    
    
    
    
    
    
    (6,492
    )
    
    
    
    
    
    
    119.4
    %
    
    
    *
    *Impairment of long-term investment
    
    
    (5,509
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    *
    *
    
    
    Other income (expense)
    
    
    (323
    )
    
    
    (1,655
    )
    
    
    
    
    
    
    
    
    
    
    
    80.5
    %
    
    
    *
    *Income (loss) from continuing operations
before income taxes and minority interest
    
    
    (188,756
    )
    
    
    (26,883
    )
    
    
    
    (42,616
    )
    
    
    30,095
    
    
    
    171.6
    %
    
    
    336.9
    %Provision (benefit) for income taxes
    
    
    (3,466
    )
    
    
    (8,276
    )
    
    
    
    (16,640
    )
    
    
    4,541
    
    
    
    86.1
    %
    
    
    648.7
    %Minority interest income (expense)
    
    
    
    
    
    
    
    
    
    
    
    (1,368
    )
    
    
    1,795
    
    
    
    *
    *
    
    
    176.2
    %Earnings (loss) from continuing operations
    
    $
    (185,290
    )
    
    $
    (18,607
    )
    
    
    $
    (27,344
    )
    
    $
    27,349
    
    
    
    303.2
    %
    
    
    268.0
    %
 **
    
    not meaningful  Year Ended December 31, 2007 Compared to the Combined Period
 Net Revenues.
 Station Operating Expenses, excluding Depreciation and Amortization.
 29




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##### Table of Contents



Corporate, General and Administrative Expenses.
 Depreciation and Amortization.
 Impairment Charge.
 Other
Expense (Income)
 Gain (Loss) on Early Extinguishment of Debt.
 Income Taxes.
 Station Operating Income.
 Intangible Assets.
 Combined Period Compared to Year Ended December 31, 2005
  Net
Revenues.
 Station Operating Expenses, excluding Depreciation and Amortization.
 Corporate, General and Administrative Expenses.
 30




---



##### Table of Contents



Depreciation
and Amortization.
 Other Expense.
 Losses on Early Extinguishment of Debt.
 Income
Taxes.
 Station Operating Income.
 Intangible
Assets.
 Seasonality
  Liquidity and Capital Resources
   Cash Flow from Operating Activities
 2007
    
    2006
    
    2005Net cash provided /(used) by operating activities
    
    $
    14,905
    
    
    $
    (181,303
    )
    
    $
    60,491
 31




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##### Table of Contents



Cash Flow from Investing Activities
 2007
    
    2006
    
    2005Net cash provided by/(used) by investing activities
    
    $
    (1,059
    )
    
    $
    (500,709
    )
    
    $
    (3,191
    )
 tm
  tm
 Cash Flow from Financing Activities
 2007
    
    2006
    
    2005Net cash provided/(used) by financing activities
    
    $
    (19,849
    )
    
    $
    682,573
    
    
    $
    (56,766
    )
    32




---



##### Table of Contents



Sources of Liquidity
 The following
table summarizes our total long term debt as of December 31, 2007.
 20079.875% Senior subordinated notes
    
    $
    242,659Term loan
    
    
    664,500Revolver
    
    
    3,000Total
    
    $
    910,159Less amounts payable within one year
    
    
    25,160$
    884,999
        33




---



##### Table of Contents



Future Needs for Liquidity
  Critical Accounting Policies and Estimates
  34




---



##### Table of Contents



Revenue Recognition.
 Valuation of Long-Lived Assets.
 Impairment of Intangible Assets. Goodwill and Other Intangible Assets
  Allowance for Doubtful Accounts.
 Income Taxes.
 35




---



##### Table of Contents



Summary Disclosures about Contractual Obligations and Commercial Commitments
  TotalContractual Cash
    
    AmountsObligations
    
    Committed
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    ThereafterLong-term debt
    
    $
    910,159
    
    
    $
    25,160
    
    
    $
    7,000
    
    
    $
    7,000
    
    
    $
    7,000
    
    
    $
    7,000
    
    
    $
    856,999Broadcast rights(1)
    
    
    23,300
    
    
    
    11,650
    
    
    
    11,650
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    32,681
    
    
    
    5,596
    
    
    
    5,232
    
    
    
    4,964
    
    
    
    3,711
    
    
    
    2,859
    
    
    
    10,319Other contractual obligations(2)
    
    
    19,793
    
    
    
    10,279
    
    
    
    9,466
    
    
    
    48
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    985,933
    
    
    $
    52,685
    
    
    $
    33,348
    
    
    $
    12,012
    
    
    $
    10,211
    
    
    $
    9,859
    
    
    $
    867,318
 
 (1)
    
    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 broadcasts 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, and 2009 football
seasons, respectively. See the notes to the audited financial
consolidated financial statements of Radio Holdings for more
information.(2)
    
    Other contractual obligations include minimum management fee payments
under the management agreement with Cumulus and the advisiory 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
  Intangibles
   36




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##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosure about Market Risk
 Interest Rate Risk
     
 Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 (a) Evaluation of Disclosure Controls and Procedures
  37




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##### Table of Contents



(b) Managements Report on Internal Control over Financial Reporting
  (c) Changes in Internal Control over Financial Reporting
  
 Item 9B. Other Information
  
 PART III
 
 Item 10. Directors and Executive Officers and Corporate Governance
  Board of Directors and Committees of the Board of Directors
 i.e.
  Code of Ethics
  
 Item 11. Executive Compensation
 Executive Compensation
  38




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##### Table of Contents



Compensation of Directors
  
 Item 12. Security Ownership of Certain Beneficial Owners & Management and Related Stockholder
Matters
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence
 The Capital Contribution Agreement
  CMP LLC Agreement
  Cumulus Management Agreement
  39




---



##### Table of Contents



Equityholders Agreement
  Board
Representation.
 Preemptive Rights; Restrictions on Transfer.
 40




---



##### Table of Contents



Right of First Offer; Tag-Along and Drag-Along Rights.
 Corporate Opportunities.
 Registration Rights Agreement
  Advisory Services Agreement
  Non-Solicitation Agreement
  41




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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
  
 PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 Financial Statements.
 42




---



##### Table of Contents



Exhibits.
 3.1
    
    Certificate of Incorporation of CMP Susquehanna Radio Holdings Corp.,
as amended (incorporated herein by reference to Exhibit 3.1 of our
registration statement on Form S-4, filed on June 6, 2007 (Commission
File 333-143558))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
    
    Indenture, dated May 5, 2006, among CMP Susquehanna Corp., the Guarantors party
thereto, and Wells Fargo Bank, National Association, as trustee (incorporated
herein by reference to Exhibit 4.1 of our registration statement on Form S-4,
filed on June 6, 2007 (Commission File 333-143558))4.2
    
    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))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
    
    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))21.1
    
    Subsidiaries (incorporated herein by reference to Exhibit 21.1 of our
registration statement on Form S-4, filed on June 6, 2007 (Commission File
333-143558))23.1*
    
    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 43




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##### Table of Contents



SIGNATURES
  CMP Susquehanna Radio Holdings Corp.By
    
    /s/ Martin R. Gausvik

Martin R. GausvikExecutive Vice President, TreasurerAnd Chief Financial Officer
  Signature
    
    Title
    
    Date/s/ Lewis W. Dickey

Lewis W. Dickey, Jr.
    
    Chairman, President, Chief Executive Officer and Director (Principal Executive Officer)
    
    March 31, 2008/s/ Martin R. Gausvik

Martin R. Gausvik
    
    Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
    
    March 31, 2008/s/ John Connaughton

John Connaughton
    
    Director
    
    March 31, 2008/s/ Michael Goody

Michael Goody
    
    Director
    
    March 31, 2008/s/ Holcombe T. Green, Jr.

Holcombe T. Green, Jr.
    
    Director
    
    March 31, 2008/s/ Ian Loring

Ian Loring
    
    Director
    
    March 31, 2008/s/ Soren Oberg

Soren Oberg
    
    Director
    
    March 31, 2008/s/ David M. Tolley

David M. Tolley
    
    Director
    
    March 31, 2008/s/ Kent R. Weldon

Kent R. Weldon
    
    Director
    
    March 31, 2008
 44




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##### Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 Annual Consolidated Financial Statements
 Report of Independent Registered Public Accounting Firm (CMP
Susquehanna Radio Holdings Corp. Radio Holdings)
    
    
    F-2Independent Auditors Report (Susquehanna Pfaltzgraff Co. Predecessor)
    
    
    F-3Consolidated
Balance Sheets as of December 31, 2007 and 2006 (CMP Susquehanna
Radio Holdings Corp. Radio Holdings)
    
    
    F-4Consolidated Statements of Operations for the Year Ended December 31,
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, and
the Year Ended December 31, 2005 (Susquehanna Pfaltzgraff Co.
Predecessor)
    
    
    F-5Consolidated Statements of Stockholders Equity and Comprehensive
Income (Loss) for the Year Ended December 31, 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, and the Year Ended December 31,
2005 (Susquehanna Pfaltzgraff Co. Predecessor)
    
    
    F-6Consolidated Statements of Cash Flows for the Year Ended December
31,2007 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, and
the Year Ended December 31, 2005 (Susquehanna Pfaltzgraff Co.
Predecessor)
    
    
    F-7Notes to Consolidated Financial Statements (CMP Susquehanna Radio
Holdings Corp. Radio Holdings and Susquehanna Pfaltzgraff Co.
Predecessor)
    
    
    F-9
 F-1




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##### Table of Contents

9

Report of Independent Registered Public Accounting Firm
 
    Accounting for Uncertainty in Income
Taxes  an
interpretation of FASB Statement No. 109
  
 F-2




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##### Table of Contents



Independent Auditors Report
 
     
 F-3




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##### Table of Contents



CMP SUSQUEHANNA RADIO HOLDINGS CORP. AND SUBSIDIARIES (Radio Holdings)
 
 CONSOLIDATED BALANCE SHEETS
December 31, 2007 and 2006
(Dollars in thousands, except for share data)
 2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,895
    
    
    $
    7,898Accounts receivable, less allowance for doubtful accounts of $1,050 and
$1,520, respectively
    
    
    47,270
    
    
    
    49,041Deferred income taxes
    
    
    
    
    
    
    927Prepaid expenses and other current assets
    
    
    2,174
    
    
    
    3,511Total current assets
    
    
    51,338
    
    
    
    61,377Property, plant and equipment, net
    
    
    36,503
    
    
    
    40,852Intangible assets, net (including goodwill of $412,795 in 2007 and $550,163 in 2006)
    
    
    1,163,930
    
    
    
    1,356,250Deferred
financing costs, net (including accumulated amortization of $5,836 in 2007 and $2,303 in 2006)
    
    
    18,929
    
    
    
    23,407Long term
investments
    
    
    6,991
    
    
    
    12,500Total assets
    
    $
    1,277,692
    
    
    $
    1,494,386LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    483
    
    
    $
    2,023Current portion of long-term debt
    
    
    25,160
    
    
    
    7,000Accrued interest
    
    
    4,574
    
    
    
    6,437Accrued income taxes
    
    
    1,211
    
    
    
    2,355Other current liabilities
    
    
    9,337
    
    
    
    11,344Total
current liabilities
    
    
    40,765
    
    
    
    29,159Long-term debt
    
    
    884,999
    
    
    
    924,500Other liabilities
    
    
    9,196
    
    
    
    8,598Deferred income taxes
    
    
    246,700
    
    
    
    250,626Total liabilities
    
    
    1,181,660
    
    
    
    1,212,883Stockholders equityCommon stock  Voting $.01 par
value, authorized 1,000 shares and issued 100 shares
    
    
    
    
    
    
    Additional paid-in capital
    
    
    299,928
    
    
    
    299,928Retained earnings (accumulated deficit)
    
    
    (203,897
    )
    
    
    (18,607
    )Accumulated other comprehensive income (loss)
    
    
    
    
    
    
    182Total stockholders equity
    
    
    96,031
    
    
    
    281,503Total liabilities and stockholders equity
    
    $
    1,277,692
    
    
    $
    1,494,386
  F-4




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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, except for share data)
 Radio Holdings
    
    
    
    PredecessorYear
    
    
    May 5, 2006
    
    
    
    January 1, 2006
    
    
    YearEnded
    
    
    Through
    
    
    
    Through
    
    
    EndedDecember 31,
    
    
    December 31,
    
    
    
    May 4,
    
    
    December 31,2007
    
    
    2006
    
    
    
    2006
    
    
    2005Net revenues
    
    $
    223,437
    
    
    $
    155,607
    
    
    
    $
    65,987
    
    
    $
    231,587Operating 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
    
    
    123,388
    
    
    
    91,870
    
    
    
    
    49,510
    
    
    
    152,542Corporate general and administrative
expenses
    
    
    7,214
    
    
    
    4,106
    
    
    
    
    31,029
    
    
    
    24,708Depreciation and amortization, including
pre-sold advertising amortization of
$23,023 for the period May 5, 2006 through
December 31, 2006
    
    
    10,393
    
    
    
    30,798
    
    
    
    
    2,421
    
    
    
    7,401(Gain)/Loss on sale of assets
    
    
    96
    
    
    
    
    
    
    
    
    
    
    
    
    (300
    )Costs related to sale of business, principally
advisory fees
    
    
    
    
    
    
    
    
    
    
    
    14,513
    
    
    
    Impairment of goodwill and intangible assets
    
    
    188,019
    
    
    
    
    
    
    
    
    
    
    
    
    Total operating expenses
    
    
    329,110
    
    
    
    126,774
    
    
    
    
    97,473
    
    
    
    184,351Operating income (loss) from continuing
operations
    
    
    (105,673
    )
    
    
    28,833
    
    
    
    
    (31,486
    )
    
    
    47,236Non-operating income (expense) from
continuing operations:Interest expense, net
    
    
    (78,509
    )
    
    
    (54,061
    )
    
    
    
    (4,638
    )
    
    
    (17,141
    )Gain (Loss) on early extinguishment of debt
    
    
    1,258
    
    
    
    
    
    
    
    
    (6,492
    )
    
    
    Impairment of long-term investment
    
    
    (5,509
    )
    
    
    
    
    
    
    
    
    
    
    
    Other income (expense)
    
    
    (323
    )
    
    
    (1,655
    )
    
    
    
    
    
    
    
    Income (loss) from continuing operations
before income taxes and minority interest
    
    
    (188,756
    )
    
    
    (26,883
    )
    
    
    
    (42,616
    )
    
    
    30,095Provision (benefit) for income taxes
    
    
    (3,466
    )
    
    
    (8,276
    )
    
    
    
    (16,640
    )
    
    
    4,541Minority interest income (expense)
    
    
    
    
    
    
    
    
    
    
    
    (1,368
    )
    
    
    1,795Earnings (loss) from continuing operations
    
    $
    (185,290
    )
    
    $
    (18,607
    )
    
    
    $
    (27,344
    )
    
    $
    27,349Discontinued operations:Gain (loss)
from operations of discontinued operations (including gain on sale of
$498,387 in 2006)
    
    
    
    
    
    
    
    
    
    
    
    502,718
    
    
    
    (19,659
    )Proceeds (benefit) for income taxes
    
    
    
    
    
    
    
    
    
    
    
    195,647
    
    
    
    (9,765
    )Minority interest income (expense)
    
    
    
    
    
    
    
    
    
    
    
    (73,966
    )
    
    
    (1,446
    )Gain (loss) on discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    233,105
    
    
    
    (11,340
    )Net income (loss)
    
    $
    (185,290
    )
    
    $
    (18,607
    )
    
    
    $
    205,761
    
    
    $
    16,009
  F-5




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##### Table of Contents



CMP SUSQUEHANNA RADIO HOLDINGS CORP. AND SUBSIDIARIES (Radio Holdings)
For the year ended December 31, 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 and year ended December 31, 2005
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND COMPREHENSIVE
INCOME (LOSS)
(Dollars in thousands)
 RetainedAdditional
    
    
    Earnings
    
    
    Accumulated
    
    
    Unearned
    
    
    TotalCommon
    
    
    Paid-In
    
    
    (Accumulated
    
    
    Comprehensive
    
    
    ESOP
    
    
    StockholdrsStock
    
    
    Capital
    
    
    Deficit)
    
    
    Income (Loss)
    
    
    Shares
    
    
    EquityPredecessorBalance as of January 1, 2005
    
    $
    272
    
    
    $
    153,167
    
    
    $
    38,191
    
    
    $
    
    
    
    $
    (134,065
    )
    
    $
    57,565Net income
    
    
    
    
    
    
    
    
    
    
    16,009
    
    
    
    
    
    
    
    
    
    
    
    16,009Additional minimum pension liability, net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,964
    )
    
    
    
    
    
    
    (8,964
    )Total comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    16,009
    
    
    
    (8,964
    )
    
    
    
    
    
    
    7,045Class A common shares repurchased
    
    
    (1
    )
    
    
    (1,825
    )
    
    
    (1,885
    )
    
    
    
    
    
    
    
    
    
    
    (3,711
    )Tax benefit of lapse in restrictions on
class A common shares
    
    
    
    
    
    
    6,161
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,161Common shares repurchased
    
    
    (2
    )
    
    
    (34
    )
    
    
    (1,941
    )
    
    
    
    
    
    
    
    
    
    
    (1,977
    )ESOP common shares repurchased
    
    
    (1
    )
    
    
    (3,773
    )
    
    
    (2,700
    )
    
    
    
    
    
    
    
    
    
    
    (6,474
    )Allocation of ESOP common shares
    
    
    
    
    
    
    8,501
    
    
    
    
    
    
    
    
    
    
    
    9,576
    
    
    
    18,077Cash dividends
    
    
    
    
    
    
    
    
    
    
    (2,568
    )
    
    
    
    
    
    
    
    
    
    
    (2,568
    )Balance as of December 31, 2005
    
    $
    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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    186Radio
HoldingsBalance as of May 4, 2006
    
    
    265
    
    
    
    152,677
    
    
    
    60,734
    
    
    
    
    
    
    
    (113,929
    )
    
    
    99,747Eliminate 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
    )
    
    $
    
    
    
    $
    
    
    
    $
    96,031
  F-6




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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
    
    
    

PredecessorMay 5, 2006
    
    
    
    January 1,Year Ended
    
    
    through
    
    
    
    2006 to
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    
    May 4,
    
    
    December 31,2007
    
    
    2006
    
    
    
    2006
    
    
    2005Cash flows from operating activities:Net income (loss)
    
    $
    (185,290
    )
    
    $
    (18,607
    )
    
    
    $
    205,761
    
    
    $
    16,009Adjustments to reconcile net income(loss) to net cash
provided (used in) by operating activities:Depreciation and amortization
    
    
    10,393
    
    
    
    30,798
    
    
    
    
    15,143
    
    
    
    49,033Amortization debt issue costs
    
    
    3,533
    
    
    
    2,303
    
    
    
    
    197
    
    
    
    902Write-off of
debt issue costs
    
    
    711
    
    
    
    
    
    
    
    
    
    
    
    
    Radio Employee Stock Plan
    
    
    
    
    
    
    
    
    
    
    
    118
    
    
    
    ESOP benefit expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,962Provision for doubtful accounts
    
    
    351
    
    
    
    1,497
    
    
    
    
    
    
    
    
    (Gain)/Loss on extinguishment of debt
    
    
    (1,258
    )
    
    
    
    
    
    
    
    6,492
    
    
    
    Non-cash contract termination charge
    
    
    
    
    
    
    6,723
    
    
    
    
    
    
    
    
    Deferred income taxes
    
    
    (4,177
    )
    
    
    (11,117
    )
    
    
    
    2,633
    
    
    
    5,753Impairment of long-term investment
    
    
    5,509
    
    
    
    
    
    
    
    
    
    
    
    
    Impairment of goodwill and intangibles
    
    
    188,019
    
    
    
    
    
    
    
    
    
    
    
    
    10,631SusQtech and Pfaltzgraff
    
    
    
    
    
    
    
    
    
    
    
    (498,528
    )
    
    
    1,590Loss (gain) on sale of properties
    
    
    96
    
    
    
    
    
    
    
    
    
    
    
    
    1,436Minority Interests
    
    
    
    
    
    
    
    
    
    
    
    75,334
    
    
    
    (349
    )Changes in assets and liabilities:Accounts receivable
    
    
    1,420
    
    
    
    (8,386
    )
    
    
    
    825
    
    
    
    2,844Decrease
(increase) in investing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,665
    )Prepaid expenses and other current assets
    
    
    1,338
    
    
    
    1,754
    
    
    
    
    (8,694
    )
    
    
    3,966Accounts
payable and other current liabilities
    
    
    (6,338
    )
    
    
    15,866
    
    
    
    
    16,835
    
    
    
    (19,844
    )Other liabilities
    
    
    598
    
    
    
    1,875
    
    
    
    
    (20,125
    )
    
    
    (19,777
    )Net cash
provided by (used in) operating activities
    
    
    14,905
    
    
    
    22,706
    
    
    
    
    (204,009
    )
    
    
    60,491Cash flows from investing activities:Purchase of property, plant and equipment, net
    
    
    (1,573
    )
    
    
    (472
    )
    
    
    
    (8,522
    )
    
    
    (35,018
    )(Acquisitions) dispositions
    
    
    192
    
    
    
    (1,220,043
    )
    
    
    
    728,328
    
    
    
    Proceeds from sale of Pfaltzgraff assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,500Proceeds from sale of WABZ-FM
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300Proceeds from sale of real estate properties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,878Purchase
accounting adjustment
    
    
    322
    
    
    
    
    
    
    
    
    
    
    
    
    Decrease
(income) in tangible assets, investments and other assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,851
    )Net cash provided by (used in) investing activities
    
    
    (1,059
    )
    
    
    (1,220,515
    )
    
    
    
    719,806
    
    
    
    (3,191
    )
  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  (Continued)
 (Dollars in thousands)
 Radio Holdings
    
    
    

PredecessorMay 6, 2006
    
    
    
    January 1,Year Ended
    
    
    through
    
    
    
    2006 to
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    
    May 4,
    
    
    December 31,2007
    
    
    2006
    
    
    
    2006
    
    
    2005Cash flows from financing activities:Net decrease in revolving credit borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33,338
    )Increase in cash overdrafts
    
    
    
    
    
    
    
    
    
    
    
    2,214
    
    
    
    Proceeds from bank facilities
    
    
    
    
    
    
    700,000
    
    
    
    
    (466,219
    )
    
    
    248,750Subordinated debt
    
    
    (5,849
    )
    
    
    250,000
    
    
    
    
    
    
    
    
    Increase in revolving credit facilities
    
    
    14,000
    
    
    
    
    
    
    
    
    113,200
    
    
    
    Construction loan repayments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (931
    )Repayment of credit facilities
    
    
    (28,000
    )
    
    
    (18,500
    )
    
    
    
    
    
    
    
    (252,767
    )Capital contributions
    
    
    
    
    
    
    299,928
    
    
    
    
    
    
    
    
    Payment of debt issuance costs
    
    
    
    
    
    
    (25,721
    )
    
    
    
    
    
    
    
    Subsidiary common stock transactions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,256
    )Repurchase of ESOP shares
    
    
    
    
    
    
    
    
    
    
    
    (58
    )
    
    
    (6,474
    )Proceeds from stock options
    
    
    
    
    
    
    
    
    
    
    
    186
    
    
    
    Repurchase of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,977
    )Class A common stock transaction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,711
    )Payment of dividends
    
    
    
    
    
    
    
    
    
    
    
    (268
    )
    
    
    (2,568
    )Distribution of cash accounts to Trusts
    
    
    
    
    
    
    
    
    
    
    
    (48,579
    )
    
    
    Purchase of minority interest
    
    
    
    
    
    
    
    
    
    
    
    (123,610
    )
    
    
    Payments to minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (494
    )Net cash provided by (used in) by financing
activities
    
    
    (19,849
    )
    
    
    1,205,707
    
    
    
    
    (523,134
    )
    
    
    (56,766
    )Net Increase (Decrease) in Cash and
Cash Equivalents
    
    
    (6,003
    )
    
    
    7,898
    
    
    
    
    (7,337
    )
    
    
    534Cash and Cash Equivalents, beginning
of Period
    
    
    7,898
    
    
    
    
    
    
    
    
    7,337
    
    
    
    8,708Cash and Cash Equivalents, end of
Period
    
    $
    1,895
    
    
    $
    7,898
    
    
    
    $
    
    
    
    $
    9,242Supplemental disclosures of cash flow informationInterest paid
    
    $
    77,174
    
    
    $
    44,017
    
    
    
    $
    17,309
    
    
    $
    35,100Taxes paid
    
    
    1,800
    
    
    
    
    
    
    
    
    219,600
    
    
    
    2,200Non-cash distribution to Trusts
    
    
    
    
    
    
    
    
    
    
    
    81,305
    
    
    
    
  F-8




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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-9




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##### Table of Contents



Financial Statement Presentation
  Change in Entity
   2. Significant Accounting Policies
 Principles of Consolidation
  Reclassification
  Use of Estimates
  Cash and Cash Equivalents
  F-10




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##### Table of Contents



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
 Accounting for National Advertising Agency Contract
   F-11




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##### Table of Contents




    
    A $6.7 million non-cash charge recorded by Radio Holdings 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 Impairment or Disposal of Long-Lived Asset
(SFAS No. 144),
 Impairment of Goodwill and Indefinite Life Intangible Assets
 Goodwill and Other Intangible Assets
  Derivative Financial Instruments
  F-12




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##### Table of Contents



Accounting for Derivative Instruments and Hedging Activities
 Debt Issuance Costs
  Revenue Recognition
  Trade Agreements
  Station Operating Expenses
  Advertising
  Comprehensive Income
 Reporting Comprehensive Income
 Income Taxes
   F-13




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##### Table of Contents



Stock-Based Compensation
 Share-Based Payment Accounting for Stock-Based
Compensation
 Extinguishment of Debt
 Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections
 Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes  an interpretation of
SFAS Statement No. 109 ( 48). Accounting for Income Taxes
 
    
    a decision not to file a tax return in a particular jurisdiction for which a return
might be required,
    
    an allocation or a shift of income between taxing jurisdictions,
    
    the characterization of income or a decision to exclude reporting taxable income in a
tax return, or
    
    a decision to classify a transaction, entity, or other position in a tax return as tax
exempt
   Business
Combinations
 F-14




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##### Table of Contents



Accounting for Certain Hybrid
Financial Instruments Accounting for Derivative Instruments and Hedging
Activities
 Fair Value Measurement
  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 ( ),
 3. Discontinued Operations of the Predecessor
  2006
    Revenues from discontinued operations
    
    $
    70,394Interest expense, net
    
    
    6,065
 F-15




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##### Table of Contents



Gain 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
 2005
     2005Revenues from discontinued operations
    
    $
    259,019Depreciation and amortization
    
    
    41,632Impairment losses
    
    
    10,631ESOP expense
    
    
    3,601Interest expense, net
    
    
    17,533
  2005Losses on disposal of businesses included in loss from
discontinued operations before income taxes and minority
interests
    
    $
    (11,193
    )Benefit for income taxes on disposal of businesses
    
    
    4,029Loss on disposal of businesses
    
    $
    (7,164
    )
 F-16




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##### Table of Contents



2005ASSETSCash and cash equivalents
    
    $
    1,905Accounts receivable, net
    
    
    6,305Prepaid income taxes
    
    
    29,389Property, plant and equipment, net
    
    
    178,352Intangible assets, net
    
    
    156,297Investments and other assets
    
    
    8,957Other
    
    
    3,728Total assets held for sale
    
    $
    384,933LIABILITIESAccounts payable
    
    $
    7,132Other current liabilities
    
    
    16,223Long-term debt
    
    
    305,843Deferred income taxes
    
    
    26,214Minority interests
    
    
    7,651Other liabilities
    
    
    4,036Total liabilities held for sale
    
    $
    367,099
   4. Property, Plant and Equipment
  F-17




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##### Table of Contents



Estimated UsefulLife
    
    
    2007
    
    
    2006Land
    
    
    
    
    
    $
    6,257
    
    
    $
    6,421Machinery and equipment
    
    
    3 to 20 years
    
    
    
    31,129
    
    
    
    30,343Buildings and improvements
    
    
    10 to 40 years
    
    
    
    7,790
    
    
    
    7,790Construction in progress
    
    
    
    
    
    
    755
    
    
    
    45,931
    
    
    
    44,554Less accumulated depreciation
    
    
    
    
    
    
    (9,428
    )
    
    
    (3,702
    )$
    36,503
    
    
    $
    40,852
  5. Long-term Debt
  2007
    
    
    20069.875% Senior subordinated notes
    
    $
    242,659
    
    
    $
    250,000Term loan
    
    
    664,500
    
    
    
    681,500Revolver
    
    
    3,000
    
    
    
    Total
    
    $
    910,159
    
    
    $
    931,500Less amounts payable within one year
    
    
    25,160
    
    
    
    7,000$
    884,999
    
    
    $
    924,500
  2008
    
    $
    7,0002009
    
    
    7,0002010
    
    
    7,0002011
    
    
    7,0002012
    
    
    7,000Thereafter
    
    
    875,159$
    910,159
    F-18




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##### Table of Contents



Predecessor
   F-19




---



##### Table of Contents



2005
          6. Derivative Financial Instruments
  F-20




---



##### Table of Contents



7. Income Taxes
  Radio Holdings
    
    
    

PredecessorMay 5, 2006
    
    
    
    January 1, 2006Year Ended
    
    
    Through
    
    
    
    Through
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    
    May 4,
    
    
    December 31,2007
    
    
    2006
    
    
    
    2006
    
    
    2005Income tax expense (benefit) from
continuing operations
    
    
    (3,466
    )
    
    
    (8,276
    )
    
    
    
    (16,640
    )
    
    
    4,541Income tax expense (benefit) from
discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    195,647
    
    
    
    (9,765
    )Total income tax expense (benefit)
    
    $
    (3,466
    )
    
    $
    (8,276
    )
    
    
    $
    179,007
    
    
    $
    (5,224
    )
 F-21




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##### Table of Contents



Radio Holdings
    
    
    

PredecessorYear ended
    
    
    May 5, 2006
    
    
    
    January 1, 2006
    
    
    Year EndedDecember 31,
    
    
    to
    
    
    
    to
    
    
    December 31,2007
    
    
    December 31, 2006
    
    
    
    May 4, 2006
    
    
    2005Current:Federal
    
    $
    (500
    )
    
    $
    558
    
    
    
    $
    4,839
    
    
    $
    555State
    
    
    1,211
    
    
    
    2,283
    
    
    
    
    854
    
    
    
    169Total current
    
    
    711
    
    
    
    2,841
    
    
    
    
    5,693
    
    
    
    724Deferred:Federal
    
    
    (3,549
    )
    
    
    (9,547
    )
    
    
    
    (18,983
    )
    
    
    (309
    )State
    
    
    (628
    )
    
    
    (1,570
    )
    
    
    
    (3,350
    )
    
    
    4,126Total deferred
    
    
    (4,177
    )
    
    
    (11,117
    )
    
    
    
    (22,333
    )
    
    
    3,817Income tax expense (benefit)
    
    $
    (3,466
    )
    
    $
    (8,276
    )
    
    
    $
    (16,640
    )
    
    $
    4,541
    Radio Holdings
    
    
    
    PredecessorYear ended
    
    
    May 5, 2006
    
    
    
    January 1, 2006
    
    
    Year EndedDecember 31,
    
    
    to
    
    
    
    to
    
    
    December 31,2007
    
    
    December 31, 2006
    
    
    
    May 4, 2006
    
    
    2005U.S. statutory rate
    
    $
    (66,065
    )
    
    $
    (9,423
    )
    
    
    $
    (14,916
    )
    
    $
    10,533Permanent differences
    
    
    
    
    
    
    727
    
    
    
    
    
    
    
    
    State income taxes, net of Federal income tax effect
    
    
    (8,412
    )
    
    
    420
    
    
    
    
    (1,622
    )
    
    
    2,799FAS 142 Impairment charge
    
    
    52,941
    
    
    
    Increase in valuation charge
    
    
    17,332
    
    
    
    Compensation deduction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,840
    )Other
    
    
    738
    
    
    
    
    
    
    
    
    (102
    )
    
    
    1,049Income tax expense (benefit)
    
    $
    (3,466
    )
    
    $
    (8,276
    )
    
    
    $
    (16,640
    )
    
    $
    4,541
 F-22




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##### Table of Contents



Radio Holdings2007
    
    
    2006Current deferred tax assets:Allowance for doubtful accounts
    
    $
    404
    
    
    $
    581Accrued expenses
    
    
    514
    
    
    
    346Current deferred tax assets
    
    
    918
    
    
    
    927Less: valuation allowance
    
    
    (918
    )
    
    
    Net current deferred tax assets
    
    
    
    
    
    
    927Non-current deferred tax assets:Intangibles & others
    
    
    12,167
    
    
    
    2,389Non-cash contract termination cost
    
    
    1,960
    
    
    
    2,273Long-term
investment write-down
    
    
    4,262
    
    
    
    2,143Net operating loss and other carryforwards
    
    
    21,632
    
    
    
    16,621Noncurrent deferred tax assets
    
    
    40,021
    
    
    
    23,426Less: valuation allowance
    
    
    (33,035
    )
    
    
    (16,621
    )Net noncurrent deferred tax assets
    
    
    6,986
    
    
    
    6,805Noncurrent deferred tax liabilities:Tangible assets, primarily property & equipment
    
    
    4,313
    
    
    
    5,765Intangible assets
    
    
    246,700
    
    
    
    247,543Other liabilities
    
    
    2,673
    
    
    
    4,123Noncurrent deferred tax liabilities
    
    
    253,686
    
    
    
    257,431Net Noncurrent deferred tax liabilities
    
    $
    246,700
    
    
    $
    250,626Net deferred tax liabilities
    
    $
    246,700
    
    
    $
    249,699
      8. Acquisitions and Dispositions
 2007
  F-23




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##### Table of Contents



2006
 Acquisition of Predecessor
   Purchase price
    
    $
    1,207,991Acquisition costs
    
    
    12,052Total purchase price consideration
    
    $
    1,220,043Allocated to:Current assets
    
    
    (47,776
    )Property, plant & equipment, net
    
    
    (44,081
    )Broadcast licenses, non-amortizable
    
    
    (795,572
    )Other intangible assets, amortizable
    
    
    (37,611
    )Investments & 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)2006
    
    2005Net revenues
    
    $
    223,109
    
    
    $
    233,089Loss before cumulative effect of change in accounting principle
    
    
    (65,205
    )
    
    
    (49,359
    )Net loss
    
    $
    (65,205
    )
    
    $
    (49,359
    )
     F-24




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##### Table of Contents



9. Goodwill and Intangible Assets
  Radio Holdingsyear endedDecember 31,2007
    
    
    2006Indefinite-lived, at carrying value:Federal Communications Commission licenses
    
    $
    745,265
    
    
    $
    795,573Goodwill
    
    
    412,795
    
    
    
    550,163Subtotal
    
    
    1,158,060
    
    
    
    1,345,736Definite-lived favorable transmitter leases
    
    
    2,413
    
    
    
    2,413Other, primarily pre-sold advertising and talent agreements
    
    
    35,198
    
    
    
    35,19837,611
    
    
    
    37,611Less accumulated amortization
    
    
    (31,741
    )
    
    
    (27,097
    )Subtotal
    
    
    5,870
    
    
    
    10,514$
    1,163,930
    
    
    $
    1,356,250
   Years ended December 31,2008
    
    $
    1,2322009
    
    
    6932010
    
    
    5302011
    
    
    4652012
    
    
    461Thereafter
    
    
    2,489$
    5,870
  F-25




---



##### Table of Contents



Goodwill
     Broadcast Licenses
     10. Other Current Liabilities
  2007
    
    
    2006Accrued employee-related costs
    
    $
    1,242
    
    
    $
    1,915Deferred revenue
    
    
    104
    
    
    
    114Accrued real estate costs
    
    
    360
    
    
    
    513Accrued external commissions
    
    
    2,034
    
    
    
    1,378Trade expense
    
    
    246
    
    
    
    1,145Accrued
Advertising Fee
    
    
    1,069
    
    
    
    784Accrued
Professional Fees
    
    
    588
    
    
    
    609Other accrued expenses
    
    
    3,694
    
    
    
    4,886$
    9,337
    
    
    $
    11,344
 F-26




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##### Table of Contents



11. Predecessor Employee Benefits
      2005Net Periodic Pension CostService cost
    
    $
    201Interest cost
    
    
    2,054Expected return on assets
    
    
    (2,442
    )Amortization of prior service cost
    
    
    39
 F-27




---



##### Table of Contents



2005Amortization of loss
    
    
    534Net Periodic Pension Cost
    
    
    386Curtailment Charge
    
    
    109Total
    
    $
    495Other Comprehensive Loss
    
    
    Change in intangible asset
    
    $
    (383
    )Additional minimum pension liability
    
    
    14,992Total
    
    $
    14,609
  2005Reconciliation of Changes in Benefit ObligationProjected benefit obligation, beginning of year
    
    $
    36,226Service cost
    
    
    Interest cost
    
    
    2,054Actuarial losses
    
    
    3,701Benefits paid
    
    
    (1,771
    )Projected benefit obligation, end of year
    
    $
    40,210Reconciliation of Changes in Fair Value of AssetsFair value of assets, beginning of year
    
    $
    38,701Actual Return on Plan Assets
    
    
    500Contributions by the Employer
    
    
    Benefits Paid
    
    
    (1,771
    )Fair Value of Assets, end of year
    
    $
    37,430
  F-28




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##### Table of Contents



F-29




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##### Table of Contents



12. Predecessors Employee Stock Ownership Plan and Class A Nonvoting Common Stock
   Employers Accounting for Employee Stock Ownership
Plans
 1 2
   13. Lease Commitments
  Year Ending December 31,2008
    
    $
    5,5962009
    
    
    5,2322010
    
    
    4,9642011
    
    
    3,7112012
    
    
    2,859Thereafter
    
    
    10,319$
    32,681
 14. Commitments and Contingencies
  F-30




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##### Table of Contents



15. Segment Information for Continuing Operations
   F-31




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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
    
    Provision for
    
    
    
    
    
    BalanceBeginning
    
    Doutbtful
    
    
    
    
    
    at End ofFiscal Year
    
    of Year
    
    Accounts
    
    Write-offs
    
    Year2007 (Radio Holdings)Allowance for Doubtful Accounts
    
    $
    1,520
    
    
    
    351
    
    
    
    (821
    )
    
    $
    1,0502006 (Radio Holdings)Allowance for Doubtful Accounts
    
    $
    578
    
    
    
    1,497
    
    
    
    (555
    )
    
    $
    1,520May 4, 2006 (Predecessor)Allowance for Doubtful Accounts
    
    $
    878
    
    
    
    207
    
    
    
    (507
    )
    
    $
    578
 F-32