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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2008.
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
 For or 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
    
    20-4530834(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)
 3280 Peachtree Road N.W., Suite 2300, Atlanta GA
    
    30305(Address of Principal Executive Offices)
    
    (ZIP Code)
 (404) 949-0700
 þ o
  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. AND SUBSIDIARIES (Radio Holdings)
INDEX
 PART I. FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements (Unaudited)
    
    
    3Condensed Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007
    
    
    3Condensed Consolidated Statements of Operations For the Three Months Ended March 31, 2008 and 2007
    
    
    4Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2007
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    9Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    13Item 4. Controls and Procedures
    
    
    13PART II. OTHER INFORMATION
    
    
    14Item 1. Legal Proceedings
    
    
    14Item 1A. Risk Factors
    
    
    14Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    14Item 3. Defaults Upon Senior Securities
    
    
    14Item 4. Submission of Matters to a Vote of Security Holders
    
    
    14Item 5. Other Information
    
    
    14Item 6. Exhibits
    
    
    14SignaturesExhibit IndexEX-31.1 SECTION 302, CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICEREX-31.2 CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICEREX-32.1 OFFICER CERTIFICATION
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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 CMP SUSQUEHANNA RADIO HOLDINGS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
 March 31,
    
    
    December 31,2008
    
    
    2007ASSETSCurrent assets:Cash and cash
equivalents
    
    $
    880
    
    
    $
    1,895Accounts receivable, less allowance for
doubtful accounts of $1,051 and
$1,050 in
2008 and
2007,
respectively
    
    
    38,030
    
    
    
    47,270Prepaid expenses
and other
current assets
    
    
    5,420
    
    
    
    2,174Total
current
assets
    
    
    44,330
    
    
    
    51,339Property, plant and
equipment, net
    
    
    35,114
    
    
    
    36,503Intangible assets, net (including goodwill of
$412,795 in both 2008 and 2007)
    
    
    1,163,598
    
    
    
    1,163,930Deferred financing costs, net (including
accumulated amortization of $6,664 in 2008
and $5,836 in 2007)
    
    
    17,529
    
    
    
    18,929Long Term Investments
    
    
    6,991
    
    
    
    6,991Total assets
    
    $
    1,267,562
    
    
    $
    1,277,692LIABILITIES AND
STOCKHOLDERS
EQUITYCurrent liabilities:Accounts payable
    
    $
    527
    
    
    $
    483Current portion
of long-term
debt
    
    
    21,885
    
    
    
    25,160Accrued interest
    
    
    9,355
    
    
    
    4,574Accrued state
income taxes
    
    
    467
    
    
    
    1,211Other current
liabilities
    
    
    8,650
    
    
    
    9,338Total
Current
Liabilities
    
    
    40,884
    
    
    
    40,766Long-term debt
    
    
    872,364
    
    
    
    884,999Other liabilities
    
    
    8,935
    
    
    
    9,196Deferred income
taxes
    
    
    247,138
    
    
    
    246,700Total
liabilities
    
    
    1,169,321
    
    
    
    1,181,661Stockholders equityCommon stock  Voting $.01 par value,
authorized 1,000 shares and issued 100 shares
    
    
    
    
    
    
    Additional paid-in
capital
    
    
    299,928
    
    
    
    299,928Accumulated
deficit
    
    
    (201,687
    )
    
    
    (203,897
    )Total stockholders
equity
    
    
    98,241
    
    
    
    96,031Total
liabilities
and
stockholders
equity
    
    $
    1,267,562
    
    
    $
    1,277,692
 See accompanying notes to condensed consolidated financial statements.
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CMP SUSQUEHANNA RADIO HOLDINGS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
(Unaudited)
 Three Months EndedMarch 31,2008
    
    
    2007Broadcast revenues, net
    
    $
    44,936
    
    
    $
    46,126Operating expenses:Station operating
expenses, excluding
depreciation and
amortization (including provision for
doubtful accounts of $348 and $715 in 2008 and
2007, respectively)
    
    
    25,994
    
    
    
    26,553Corporate general and administrative expenses
    
    
    1,676
    
    
    
    1,683Depreciation and amortization
    
    
    1,759
    
    
    
    2,794Total operating expenses
    
    
    29,429
    
    
    
    31,030Operating income
    
    
    15,507
    
    
    
    15,096Non-operating income
(expense):Gain on extinguishment of debt
    
    
    3,683
    
    
    
    Interest expense, net
    
    
    (16,410
    )
    
    
    (19,508
    )Other expense
    
    
    (20
    )
    
    
    (9
    )Total non-operating expenses, net
    
    
    (12,747
    )
    
    
    (19,517
    )Income (loss) before income taxes
    
    
    2,760
    
    
    
    (4,421
    )Provision (benefit) for income taxes
    
    
    550
    
    
    
    (2,093
    )Net Income (Loss)
    
    $
    2,210
    
    
    $
    (2,328
    )
 See accompanying notes to condensed consolidated financial statements.
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CMP SUSQUEHANNA RADIO HOLDINGS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
 Three Months EndedMarch 31,
    
    
    March 31,2008
    
    
    2007Cash flows from operating activities:Net income (loss)
    
    $
    2,210
    
    
    $
    (2,328
    )Adjustments to reconcile net income (loss) to net cash
provided by operating activities:Depreciation and amortization
    
    
    1,759
    
    
    
    2,794Amortization of debt issuance costs
    
    
    828
    
    
    
    1,225Provision for doubtful accounts
    
    
    348
    
    
    
    715Gain on extingishment of debt
    
    
    (3,683
    )
    
    
    Deferred income taxes
    
    
    438
    
    
    
    (2,735
    )Gain on sale of fixed assets or stations
    
    
    (18
    )
    
    
    Changes in assets and liabilities:Decrease in accounts receivable
    
    
    8,892
    
    
    
    7,570Increase (decrease) in accounts payable and accrued expenses
    
    
    5,454
    
    
    
    (1,380
    )Decrease in prepaid expenses and other current assets
    
    
    3,246
    
    
    
    (3,042
    )Increase (decrease) in other liabilities
    
    
    (261
    )
    
    
    530Increase (decrease) in other current liabilities
    
    
    (2,061
    )
    
    
    3,684Net cash provided by operating activities
    
    
    10,660
    
    
    
    7,033Cash flows from investing activities:Capital expenditures
    
    
    (419
    )
    
    
    (180
    )Proceeds from sale of assets or radio stations
    
    
    398
    
    
    
    Net cash used in investing activities
    
    
    (21
    )
    
    
    (180
    )Cash flows from financing activities:Increase in revolving credit borrowings
    
    $
    8,000
    
    
    $
    Repurchase of senior subordinated notes
    
    
    (13,904
    )
    
    
    Repayment of long-term debt
    
    
    (5,750
    )
    
    
    (11,750
    )Net cash used in financing activities
    
    
    (11,654
    )
    
    
    (11,750
    )Decrease in cash and cash equivalents
    
    
    (1,015
    )
    
    
    (4,897
    )Cash and cash equivalents, beginning of period
    
    
    1,895
    
    
    
    7,898Cash and cash equivalents, end of the period
    
    $
    880
    
    
    $
    3,001Supplemental disclosures of cash flow informationTrade Revenue
    
    $
    558
    
    
    $
    653Trade Expense
    
    $
    493
    
    
    $
    483Interest paid
    
    $
    10,828
    
    
    $
    12,846Taxes paid
    
    $
    
    
    
    $
    
 See accompanying notes to condensed consolidated financial statements.
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CMP Susquehanna Radio Holdings Corp. and Subsidiaries
 
 Notes to Condensed Consolidated Financial Statements
 (Unaudited)
 1. Interim Financial Data and Basis of Presentation
 Interim Financial Data
    Change in Entity
   Recent Accounting Pronouncement
 FAS 161. Disclosures about Derivative Instruments and Hedging Activities
  2. Long-term Debt
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March 31,
    
    
    December 31,2008
    
    
    20079.875% Senior subordinated notes
    
    $
    224,499
    
    
    $
    242,659Term loan
    
    
    662,750
    
    
    
    664,500Revolving credit facility
    
    
    7,000
    
    
    
    3,000Total
    
    $
    894,249
    
    
    $
    910,159Less amounts payable within one year
    
    
    21,885
    
    
    
    25,160$
    872,364
    
    
    $
    884,999
     3. Contingencies
    7




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4. Related Party
  5. Dispositions
  8




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
   Advertising Revenue and Station Operating Income
     9




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Results of Operations
  For the Three
    
    
    Increase/Months Ended
    
    
    (Decrease)March 31,
    
    
    2008 vs
    
    
    Percent2008
    
    
    2007
    
    
    2007
    
    
    ChangeSTATEMENT OF OPERATIONS DATA:Net revenues
    
    $
    44,936
    
    
    $
    46,126
    
    
    $
    (1,190
    )
    
    
    -2.6
    %Station operating expenses excluding depreciation,
amortization
    
    
    25,994
    
    
    
    26,553
    
    
    
    (559
    )
    
    
    -2.1
    %Corporate general and administrative
    
    
    1,676
    
    
    
    1,683
    
    
    
    (7
    )
    
    
    -0.4
    %Depreciation and amortization
    
    
    1,759
    
    
    
    2,794
    
    
    
    (1,035
    )
    
    
    -37.0
    %Operating income
    
    $
    15,507
    
    
    $
    15,096
    
    
    $
    411
    
    
    
    2.7
    %Gain on extinguishment of debt
    
    
    3,683
    
    
    
    
    
    
    
    3,683
    
    
    
    N/AInterest expense, net
    
    
    (16,410
    )
    
    
    (19,508
    )
    
    
    (3,098
    )
    
    
    -15.9
    %Other income (expense), net
    
    
    (20
    )
    
    
    (9
    )
    
    
    11
    
    
    
    122.2
    %Income tax provision (benefit)
    
    
    550
    
    
    
    (2,093
    )
    
    
    (2,643
    )
    
    
    126.3
    %Net income (loss)
    
    $
    2,210
    
    
    $
    (2,328
    )
    
    $
    4,538
    
    
    
    194.9
    %OTHER DATA:Station operating income (1)
    
    $
    18,942
    
    
    $
    19,573
    
    
    $
    (631
    )
    
    
    -3.2
    %Station operating income margin (2)
    
    
    42.2
    %
    
    
    42.4
    %Cash flows related to:Operating activities
    
    
    10,660
    
    
    
    7,033Investing activities
    
    
    (21
    )
    
    
    (180
    )Financing activities
    
    
    (11,654
    )
    
    
    (11,750
    )Capital expenditures
    
    
    419
    
    
    
    180
 
 (1)
    
    Station operating income consists of operating income before corporate general and
administrative expenses and depreciation and amortization. Station operating income is not
a measure of performance calculated in accordance with GAAP. Station
operating income
should not be considered in isolation or as a substitute for net income, operating income
(loss), cash flows from operating activities or any other measure for determining our
operating performance or liquidity that is calculated in accordance with GAAP. See
managements explanation of this measure and the reasons for its use and presentation,
along with a quantitative reconciliation of station operating income to its most directly
comparable financial measure calculated and presented in accordance with GAAP, below.(2)
    
    Station operating income margin is defined as station operating income as a percentage
of net revenue. 10




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Three Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007.
 Net Revenues.
 Station Operating Expenses excluding Depreciation and Amortization.
 Corporate General and Administrative Expenses.
 Depreciation and Amortization.
 Interest Expense, Net.
 Income Taxes.
 Station Operating Income.
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Three Months EndedMarch, 31
    
    
    Increase/
    
    
    % Percent2008
    
    
    2007
    
    
    (Decrease)
    
    
    ChangeOperating income
    
    $
    15,507
    
    
    $
    15,096
    
    
    $
    411
    
    
    
    2.7
    %Corporate general and administrative
    
    
    1,676
    
    
    
    1,683
    
    
    
    (7
    )
    
    
    -0.4
    %Depreciation and amortization
    
    
    1,759
    
    
    
    2,794
    
    
    
    (1,035
    )
    
    
    -37.0
    %Station operating income
    
    $
    18,942
    
    
    $
    19,573
    
    
    $
    (631
    )
    
    
    -3.2
    %
 Intangible Assets.
 Liquidity and Capital Resources
     Sources of Liquidity
     12




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Future Needs for Liquidity
   
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
   
 Item 4. Controls and Procedures
   13




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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 31.1
    
        Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
       Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
       Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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SIGNATURE
  CMP SUSQUEHANNA RADIO HOLDINGS CORP.Date: May 12, 2008
    by:
    /s/ Martin R. GausvikMartin R. GausvikExecutive Vice President,
Treasurer and Chief Financial Officer 
 EXHIBIT INDEX
 31.1
    
       Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
       Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
       Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.