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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-Q

QUARTERLY REPORT
Under
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934



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(Mark One)



|[X] | QUARTERLY REPORT PURSUANT TO SECTION 13D OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------

For the quarter ended March 31, 2002
OR



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

For the transition period from ____________ to ____________

Commission File Number 1-10321

THE ACKERLEY GROUP, INC.

(Exact name of registrant as specified in its charter)


|                                                                        |  |                                             
|----------------------------------------------------------------------- |  | --------------------------------------------
|Delaware
(State or other jurisdiction of
incorporation or organization) |  | 91-1043807
(IRS Employer Identification No.)

1301 Fifth Avenue
Suite 4000
Seattle, Washington 98101
(206) 624-2888
(Address, including zip code, and telephone number,
including area code, of Registrants principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:

Yes   [X]        No   [   ]

Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the latest practicable date.

|                                     |  |                            |  | 
|------------------------------------ |  | -------------------------- |  | 
|Title of Class                       |  | Outstanding at May 1, 2002
|                                     |  |                           
|Common Stock, $.01 par value         |  | 24,298,380 shares         
|Class B Common Stock, $.01 par value |  | 11,020,622 shares         





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TABLE OF CONTENTS



|                               |                                                                                                |                                                        |  |  |  |  |  | 
|------------------------------ | ---------------------------------------------------------------------------------------------- | ------------------------------------------------------ |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | ITEM 1  FINANCIAL STATEMENTS                                                                 
|                               |                                                                                                | CONSOLIDATED BALANCE SHEETS                           
|                               |                                                                                                | CONSOLIDATED STATEMENTS OF OPERATIONS                 
|                               |                                                                                                | CONSOLIDATED STATEMENTS OF CASH FLOWS                 
|                               |                                                                                                | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|                               | ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                               | ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                            
|PART II  OTHER INFORMATION   
|                               | ITEM 1  LEGAL PROCEEDINGS                                                                    
|                               | ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                                    
|SIGNATURES                    



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TABLE OF CONTENTS

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|PART I   |  | FINANCIAL INFORMATION                                                                 |  |                                                                                         |    |     
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|ITEM 1.   |  | FINANCIAL STATEMENTS                                                                  |  |                                                                                         |    |     
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|          |  |                                                                                       |  | CONSOLIDATED BALANCE SHEETS
MARCH 31, 2002 AND DECEMBER 31, 2001                        |    |      | 1  | 
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|          |  |                                                                                       |  | CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTH PERIODS ENDED MARCH 31, 2002 AND 2001 |    |      | 2  | 
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|ITEM 2.   |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  |                                                                                         | 8  |     
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|ITEM 3.   |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISKS                           |  |                                                                                         | 16 |     
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|PART II  |  | OTHER INFORMATION                                                                     |  |                                                                                         |    |     
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|ITEM 1.   |  | LEGAL PROCEEDINGS                                                                     |  |                                                                                         | 17 |     
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|ITEM 6.   |  | EXHIBITS AND REPORTS ON FORM 8-K                                                      |  |                                                                                         | 17 |     
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|          |  |                                                                                       |  | SIGNATURES                                                                              |    |      | 18 | 

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##### Table of Contents






PART I  FINANCIAL INFORMATION




ITEM 1  FINANCIAL STATEMENTS




THE ACKERLEY GROUP, INC.
CONSOLIDATED BALANCE SHEETS



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ASSETS

|                                     |                                                                                                                                                                                                                                          |                            |                                            |         |                |         |              |         |         |         | 
|------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | ------- | -------------- | ------- | ------------ | ------- | ------- | ------- | 
|                                     |                                                                                                                                                                                                                                          |                            |                                            |         | (Unaudited)    |         |              |         |        
|                                     |                                                                                                                                                                                                                                          |                            |                                            |         | March 31,      |         | December 31,
|                                     |                                                                                                                                                                                                                                          |                            |                                            |         | 2002           |         | 2001        
|                                     |                                                                                                                                                                                                                                          |                            |                                            |         |                |         |             
|                                     |                                                                                                                                                                                                                                          |                            |                                            |         | (In thousands)
|Current assets:                      |                                                                                                                                                                                                                                          |                            |                                            |         |                |         |              |        
|                                     | Cash and cash equivalents                                                                                                                                                                                                                |                            | $                                          | 18,674  |                |         | $            | 16,794  |        
|                                     | Restricted cash                                                                                                                                                                                                                          |                            |                                            |        |                |         |              | 9,000   |        
|                                     | Accounts receivable, net of allowance                                                                                                                                                                                                    |                            |                                            | 32,845  |                |         |              | 42,607  |        
|                                     | Current portion of broadcast rights                                                                                                                                                                                                      |                            |                                            | 7,306   |                |         |              | 8,591   |        
|                                     | Prepaid expenses                                                                                                                                                                                                                         |                            |                                            | 5,674   |                |         |              | 5,347   |        
|                                     | Deferred tax asset                                                                                                                                                                                                                       |                            |                                            | 9,386   |                |         |              | 1,573   |        
|                                     | Other current assets                                                                                                                                                                                                                     |                            |                                            | 7,188   |                |         |              | 6,835   |        
|                                     |                                                                                                                                                                                                                                          |                            |                                            |         |                |         |              |        
|                                     |                                                                                                                                                                                                                                          |                            | Total current assets                       |         |                | 81,073  |              |         |         | 90,747  | 
|Property and equipment, net          |                                                                                                                                                                                                                                          |                            | 117,381                                    |         |                |         | 121,794      |        
|Goodwill, net                        |                                                                                                                                                                                                                                          |                            | 195,513                                    |         |                |         | 195,513      |        
|Other intangibles, net               |                                                                                                                                                                                                                                          |                            | 126,485                                    |         |                |         | 129,763      |        
|Investment in affiliates             |                                                                                                                                                                                                                                          |                            | 19,126                                     |         |                |         | 19,278       |        
|Other assets                         |                                                                                                                                                                                                                                          |                            | 17,855                                     |         |                |         | 19,746       |        
|                                     |                                                                                                                                                                                                                                          |                            |                                            |         |                |         |              |        
|                                     |                                                                                                                                                                                                                                          |                            | Total assets                               |         | $              | 557,433 |              |         | $       | 576,841 | 
|                                     |                                                                                                                                                                                                                                          |                            |                                            |         |                |         |              |        
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|LIABILITIES AND STOCKHOLDERS EQUITY
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|Current liabilities:                 |                                                                                                                                                                                                                                          |                            |                                            |         |                |         |              |        
|                                     | Accounts payable                                                                                                                                                                                                                         |                            | $                                          | 3,185   |                |         | $            | 4,332   |        
|                                     | Accrued interest                                                                                                                                                                                                                         |                            |                                            | 3,874   |                |         |              | 8,491   |        
|                                     | Accrued wages and commissions                                                                                                                                                                                                            |                            |                                            | 2,029   |                |         |              | 1,967   |        
|                                     | Other accrued liabilities                                                                                                                                                                                                                |                            |                                            | 10,658  |                |         |              | 12,697  |        
|                                     | Deferred revenue                                                                                                                                                                                                                         |                            |                                            | 698     |                |         |              | 558     |        
|                                     | Current portion of broadcast obligations                                                                                                                                                                                                 |                            |                                            | 6,346   |                |         |              | 7,607   |        
|                                     | Current portion of long-term debt                                                                                                                                                                                                        |                            |                                            | 289,118 |                |         |              | 289,086 |        
|                                     |                                                                                                                                                                                                                                          |                            |                                            |         |                |         |              |        
|                                     |                                                                                                                                                                                                                                          |                            | Total current liabilities                  |         |                | 315,908 |              |         |         | 324,738 | 
|Long-term debt, less current portion |                                                                                                                                                                                                                                          |                            | 1,326                                      |         |                |         | 1,493        |        
|Deferred tax liabilities             |                                                                                                                                                                                                                                          |                            | 13,404                                     |         |                |         | 11,874       |        
|Other long-term liabilities          |                                                                                                                                                                                                                                          |                            | 14,693                                     |         |                |         | 15,731       |        
|                                     |                                                                                                                                                                                                                                          |                            |                                            |         |                |         |              |        
|                                     |                                                                                                                                                                                                                                          |                            | Total liabilities                          |         |                | 345,331 |              |         |         | 353,836 | 
|Stockholders equity:                |                                                                                                                                                                                                                                          |                            |                                            |         |                |         |              |        
|                                     | Common stock, par value $.01 per
shareauthorized 50,000,000 shares; issued
March 31, 2002  25,673,326 and December 31,
2001  25,582,269 shares; and outstanding March
31, 2002  24,298,380 and December 31, 2001 
24,207,323 shares |                            |                                            | 257     |                |         |              | 256     |        
|                                     | Class B common stock, par value $.01 per
shareauthorized 11,406,510 shares; issued and
outstanding March 31, 2002 and December 31,
2001  11,020,622 shares                                                                             |                            |                                            | 110     |                |         |              | 110     |        
|                                     | Capital in excess of par value                                                                                                                                                                                                           |                            |                                            | 60,234  |                |         |              | 59,455  |        
|                                     | Retained earnings                                                                                                                                                                                                                        |                            |                                            | 161,590 |                |         |              | 173,273 |        
|                                     | Less common stock in treasury, at cost                                                                                                                                                                                                   |                            |                                            | (10,089 | )              |         |              | (10,089 | )      
|                                     |                                                                                                                                                                                                                                          |                            |                                            |         |                |         |              |        
|                                     |                                                                                                                                                                                                                                          | Total stockholders equity |                                            |         | 212,102        |         |              |         | 223,005 |        
|                                     |                                                                                                                                                                                                                                          |                            |                                            |         |                |         |              |        
|                                     |                                                                                                                                                                                                                                          |                            | Total liabilities and stockholders equity |         | $              | 557,433 |              |         | $       | 576,841 | 
|                                     |                                                                                                                                                                                                                                          |                            |                                            |         |                |         |              |        

See Notes to Consolidated Financial Statements

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THE ACKERLEY GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED

|                                                                           |                       |   |                           |        |      |   |         |        | 
|-------------------------------------------------------------------------- | --------------------- | - | ------------------------- | ------ | ---- | - | ------- | ------ | 
|                                                                           |                       |   | For the Three Month      
|                                                                           |                       |   | Periods Ended March 31,  
|                                                                           |                       |   |                          
|                                                                           |                       |   | 2002                      |        | 2001
|                                                                           |                       |   |                           |        |     
|                                                                           |                       |   | (In thousands, except per
|                                                                           |                       |   | share amounts)           
|Revenue                                                                    |                       | $ | 44,752                    |        |      | $ | 52,117  |       
|Less agency commissions and discounts                                      |                       |   | (6,273                    | )      |      |   | (7,244  | )     
|                                                                           |                       |   |                           |        |      |   |         |       
|Net revenue                                                                |                       |   | 38,479                    |        |      |   | 44,873  |       
|Expenses:                                                                  |                       |   |                           |        |      |   |         |       
|                                                                           | Operating expenses    |   |                           | 41,152 |      |   |         | 47,878 | 
|                                                                           | Amortization expense  |   |                           | 3,278  |      |   |         | 6,577  | 
|                                                                           | Depreciation expense  |   |                           | 4,827  |      |   |         | 4,281  | 
|                                                                           | Interest expense, net |   |                           | 6,769  |      |   |         | 9,548  | 
|                                                                           | Other                 |   |                           | 189    |      |   |         | 25     | 
|                                                                           |                       |   |                           |        |      |   |         |       
|Total expenses                                                             |                       |   | 56,215                    |        |      |   | 68,309  |       
|                                                                           |                       |   |                           |        |      |   |         |       
|Loss from continuing operations before income taxes and
extraordinary item |                       |   | (17,736                   | )      |      |   | (23,436 | )     
|Income tax benefit                                                         |                       |   | 6,190                     |        |      |   | 8,200   |       
|                                                                           |                       |   |                           |        |      |   |         |       
|Loss from continuing operations before extraordinary item                  |                       |   | (11,546                   | )      |      |   | (15,236 | )     
|Gain on disposal of discontinued operations, net of taxes                  |                       |   | 458                       |        |      |   |        |       
|Extraordinary item: merger costs                                           |                       |   | (595                      | )      |      |   |        |       
|                                                                           |                       |   |                           |        |      |   |         |       
|Net loss                                                                   |                       | $ | (11,683                   | )      |      | $ | (15,236 | )     
|                                                                           |                       |   |                           |        |      |   |         |       
|Earnings per Common Share:                                                 |                       |   |                           |        |      |   |         |       
|Loss from continuing operations                                            |                       | $ | (.32                      | )      |      | $ | (.43    | )     
|Gain on disposal of discontinued operations                                |                       |   | .01                       |        |      |   |        |       
|Extraordinary item: merger costs                                           |                       |   | (.02                      | )      |      |   |        |       
|                                                                           |                       |   |                           |        |      |   |         |       
|Net loss                                                                   |                       | $ | (.33                      | )      |      | $ | (.43    | )     
|                                                                           |                       |   |                           |        |      |   |         |       
|Earnings per Common Share  Assuming Dilution:                             |                       |   |                           |        |      |   |         |       
|Loss from continuing operations                                            |                       | $ | (.32                      | )      |      | $ | (.43    | )     
|Gain on disposal of discontinued operations                                |                       |   | .01                       |        |      |   |        |       
|Extraordinary item: merger costs                                           |                       |   | (.02                      | )      |      |   |        |       
|                                                                           |                       |   |                           |        |      |   |         |       
|Net loss assuming dilution                                                 |                       | $ | (.33                      | )      |      | $ | (.43    | )     
|                                                                           |                       |   |                           |        |      |   |         |       
|Weighted average number of common shares                                   |                       |   | 35,294                    |        |      |   | 35,058  |       
|Weighted average number of common shares  diluted                         |                       |   | 35,294                    |        |      |   | 35,058  |       

See Notes to Consolidated Financial Statements

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THE ACKERLEY GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED



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|                                                                            |                                                                               |                                                                                  |                        |                                                             |        |                         |         |         |         |        |    | 
|--------------------------------------------------------------------------- | ----------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | ---------------------- | ----------------------------------------------------------- | ------ | ----------------------- | ------- | ------- | ------- | ------ | -- | 
|                                                                            |                                                                               |                                                                                  |                        |                                                             |        | For the Three Month    
|                                                                            |                                                                               |                                                                                  |                        |                                                             |        | Periods Ended March 31,
|                                                                            |                                                                               |                                                                                  |                        |                                                             |        |                        
|                                                                            |                                                                               |                                                                                  |                        |                                                             |        | 2002                    |         | 2001   
|                                                                            |                                                                               |                                                                                  |                        |                                                             |        |                         |         |        
|                                                                            |                                                                               |                                                                                  |                        |                                                             |        | (In thousands)         
|Cash flows from operating activities:                                       |                                                                               |                                                                                  |                        |                                                             |        |                         |         |        
|Net loss                                                                    |                                                                               | $                                                                                | (11,683                | )                                                           |        | $                       | (15,236 | )      
|Adjustments
to reconcile net loss to net cash used in operating activities: |                                                                               |                                                                                  |                        |                                                             |        |                         |         |        
|                                                                            | Depreciation and amortization                                                 |                                                                                  |                        | 8,105                                                       |        |                         |         | 11,313  |        
|                                                                            | Amortization of broadcast rights                                              |                                                                                  |                        | 2,853                                                       |        |                         |         | 3,102   |        
|                                                                            | Deferred tax benefit                                                          |                                                                                  |                        | (6,011                                                      | )      |                         |         | (8,198  | )      
|                                                                            | Amortization of deferred financing costs                                      |                                                                                  |                        | 622                                                         |        |                         |         | 1,000   |        
|                                                                            | Income from barter transactions, net                                          |                                                                                  |                        | (61                                                         | )      |                         |         | (993    | )      
|                                                                            | Amortization of deferred gain on termination of interest rate swap
agreements |                                                                                  |                        |                                                            |        |                         |         | (809    | )      
|                                                                            | Gain on disposal of discontinued operation, net of taxes                      |                                                                                  |                        | (458                                                        | )      |                         |         |        |        
|                                                                            | Other                                                                         |                                                                                  |                        | 189                                                         |        |                         |         | 25      |        
|                                                                            | Change in assets and liabilities:                                             |                                                                                  |                        |                                                             |        |                         |         |         |        
|                                                                            |                                                                               | Accounts receivable                                                              |                        |                                                             | 10,467 |                         |         |         | 3,829   |       
|                                                                            |                                                                               | Prepaid expenses                                                                 |                        |                                                             | (327   | )                       |         |         | 3,895   |       
|                                                                            |                                                                               | Other current assets and other assets                                            |                        |                                                             | 38     |                         |         |         | (7,570  | )     
|                                                                            |                                                                               | Accounts payable, accrued interest, and accrued wages and commissions            |                        |                                                             | (5,702 | )                       |         |         | (4,328  | )     
|                                                                            |                                                                               | Other accrued liabilities, income taxes payable, and other
long-term liabilities |                        |                                                             | (2,759 | )                       |         |         | 2,810   |       
|                                                                            |                                                                               | Deferred revenues                                                                |                        |                                                             | 140    |                         |         |         | (11,297 | )     
|                                                                            |                                                                               | Broadcast obligations                                                            |                        |                                                             | (2,417 | )                       |         |         | (3,207  | )     
|                                                                            |                                                                               |                                                                                  |                        |                                                             |        |                         |         |        
|                                                                            | Net cash used in operating activities                                         |                                                                                  |                        | (7,004                                                      | )      |                         |         | (25,664 | )      
|Cash flows from investing activities:                                       |                                                                               |                                                                                  |                        |                                                             |        |                         |         |        
|                                                                            | Capital expenditures                                                          |                                                                                  |                        | (270                                                        | )      |                         |         | (5,789  | )      
|                                                                            | Payments for investments                                                      |                                                                                  |                        |                                                            |        |                         |         | (300    | )      
|                                                                            |                                                                               |                                                                                  |                        |                                                             |        |                         |         |        
|                                                                            | Net cash used in investing activities                                         |                                                                                  |                        | (270                                                        | )      |                         |         | (6,089  | )      
|Cash flows from financing activities:                                       |                                                                               |                                                                                  |                        |                                                             |        |                         |         |        
|                                                                            | Borrowings under credit agreements                                            |                                                                                  |                        | 9,000                                                       |        |                         |         | 31,000  |        
|                                                                            | Payments under credit agreements                                              |                                                                                  |                        | (229                                                        | )      |                         |         |        |        
|                                                                            | Payments under capital lease obligation                                       |                                                                                  |                        |                                                            |        |                         |         | (779    | )      
|                                                                            | Proceeds from stock issuances                                                 |                                                                                  |                        | 383                                                         |        |                         |         | 137     |        
|                                                                            |                                                                               |                                                                                  |                        |                                                             |        |                         |         |        
|                                                                            | Net cash provided by financing activities                                     |                                                                                  |                        | 9,154                                                       |        |                         |         | 30,358  |        
|                                                                            |                                                                               |                                                                                  |                        |                                                             |        |                         |         |        
|Net increase (decrease) in cash and cash equivalents                        |                                                                               |                                                                                  | 1,880                  |                                                             |        |                         | (1,395  | )      
|Cash and cash equivalents at beginning of period                            |                                                                               |                                                                                  | 16,794                 |                                                             |        |                         | 4,687   |        
|                                                                            |                                                                               |                                                                                  |                        |                                                             |        |                         |         |        
|Cash and cash equivalents at end of period                                  |                                                                               | $                                                                                | 18,674                 |                                                             |        | $                       | 3,292   |        
|                                                                            |                                                                               |                                                                                  |                        |                                                             |        |                         |         |        
|                                                                            | Supplemental cash flow information:                                           |                                                                                  |                        |                                                             |        |                         |         |         |        
|                                                                            |                                                                               |                                                                                  | Interest paid          |                                                             | $      | 10,764                  |         |         | $       | 14,730 |   
|                                                                            |                                                                               |                                                                                  | Income taxes paid, net |                                                             | $      | 80                      |         |         | $       | 176    |   
|                                                                            |                                                                               |                                                                                  | Noncash transactions:  |                                                             |        |                         |         |         |         |        |   
|                                                                            |                                                                               |                                                                                  |                        | Broadcast rights acquired and broadcast obligations assumed |        | $                       | 318     |         |         | $      | 37 | 
|                                                                            |                                                                               |                                                                                  |                        | Property and equipment acquired through barter              |        | $                       | 144     |         |         | $      | 83 | 

See Notes to Consolidated Financial Statements

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THE ACKERLEY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of The
Ackerley Group, Inc. and its subsidiaries (the Company) have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. The balance sheet at December 31, 2001 has been derived from the audited
consolidated financial statements at that date. The accompanying consolidated
financial statements do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all normal and recurring adjustments
necessary for a fair presentation of the financial position and the results of
operations for such periods have been included. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto contained in the Companys Annual Report on Form
10-K for the year ended December 31, 2001.

The results of operations for any interim period are not necessarily
indicative of anticipated results for the full year. The Companys results of
operations may vary from quarter to quarter due in part to the timing of
acquisitions and to seasonal variations in the operations of the outdoor
advertising, television broadcasting, and radio broadcasting segments. In
particular, the Companys net revenue and net income historically have been
affected positively by increased advertising activity in the second and fourth
quarters.

Certain prior years amounts have been reclassified to conform to the 2002 presentation.

NOTE 2. NEW ACCOUNTING STANDARDS

The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 142, Goodwill and Other Intangible Assets, effective January 1, 2002.
Under the new rule, goodwill and intangible assets deemed to have indefinite
lives are no longer amortized, but are subject to annual impairment tests in
accordance with the Statement. The Companys intangible assets for FCC
licenses and certain network affiliation agreements are considered to have
indefinite lives under SFAS No. 142. In addition, the adoption of SFAS No. 142
resulted in changes to the useful lives of the network affiliation agreements
that do not have an indefinite life. These changes had the impact of reducing
amortization expense for the first quarter of 2002 by approximately $2.4
million, or $.07 per share. The impact of these changes on the Companys net
loss and net loss per share for the first quarter 2001, as if SFAS No. 142 had
been adopted effective January 1, 2001, is as follows (in thousands, except per
share amounts):

|                                                                       |  |   |         |  
|---------------------------------------------------------------------- |  | - | ------- | -
|Reported net loss                                                      |  | $ | (15,236 | )
|Add back: goodwill amortization                                        |  |   | 4,116   |  
|Add back: FCC license amortization                                     |  |   | 908     |  
|Add back: indefinite lived network affiliation agreements amortization |  |   | 586     |  
|Adjust: finite lived network affiliation agreement amortization        |  |   | (1,347  | )
|                                                                       |  |   |         |  
|Adjusted net loss                                                      |  | $ | (10,973 | )
|                                                                       |  |   |         |  
|Basic and diluted earnings per share:                                  |  |   |         |  
|Reported net loss                                                      |  | $ | (.43    | )
|Add back: goodwill amortization                                        |  |   | .11     |  
|Add back: FCC license amortization                                     |  |   | .03     |  
|Add back: indefinite lived network affiliation agreements amortization |  |   | .02     |  
|Adjust: finite lived network affiliation agreement amortization        |  |   | (.04    | )
|                                                                       |  |   |         |  
|Adjusted net loss                                                      |  | $ | (.31    | )
|                                                                       |  |   |         |  

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The Company has completed the first step in its evaluation of impairment
with respect to goodwill. The results of this evaluation indicate that
goodwill in certain reporting units within the television broadcasting segment
may be impaired. The Company is proceeding with the second step of the
evaluation process in accordance with SFAS No. 142 in order to determine
whether such goodwill is impaired and, if so, to record the impairment. This
evaluation will be completed by the fourth quarter of 2002.

The Company also adopted SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, effective January 1, 2002. SFAS No. 144
supersedes SFAS No. 121, Accounting for the Impairment of Long-lived Assets and
for Long-Lived Assets to Be Disposed Of, providing a single accounting model
for long-lived assets to be disposed of. In addition, SFAS No. 144 amends
certain provisions of Accounting Principles Board Opinion No. 30, Reporting the
Results of Operations  Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions, with respect to the accounting for discontinued operations. The
adoption of SFAS No. 144 had no impact in the Companys consolidated financial
statements.

NOTE 3. MERGER

On October 5, 2001, the Company entered into a merger agreement (the
Merger Agreement) with Clear Channel Communications, Inc. (Clear Channel).
Under the terms of Merger Agreement, each share of the common stock and the
Class B common stock of the Company will be converted into the right to receive
0.35 of a share of the common stock of Clear Channel. The transaction is
intended to be tax-free to the Companys stockholders. The Companys
stockholders approved the transaction on January 24, 2002. The transaction,
which is expected to be consummated in the second quarter of 2002, is subject
to customary regulatory approvals and closing conditions. The Company incurred
legal costs of approximately $0.6 million related to the merger in the first
quarter of 2002. These costs have been classified as an extraordinary item in
the Consolidated Statements of Operations.

NOTE 4. DISCONTINUED OPERATIONS

On April 2, 2001, the Company sold substantially all of the assets of its
sports & entertainment operations to The Basketball Club of Seattle, LLC for
$200.0 million in cash and the assumption of certain liabilities. These
operations consisted principally of the Seattle SuperSonics National Basketball
Association franchise, operating rights to the Seattle Storm, a Womans
National Basketball Association franchise, and Full House Sports &
Entertainment, the Companys sports marketing business. In addition, on August
2, 2001, the Company sold separately its Boeing 727 aircraft used by the
Seattle SuperSonics for transportation to and from away games. In the first
quarter of 2002, the Company recorded a gain of $0.5 million, net of income
taxes of $0.2 million related to these sales. This gain resulted from
adjustments to certain estimates utilized in calculating the gain recorded in
2001 of $92.7 million, net of taxes.

NOTE 5. INTANGIBLE ASSETS

At March 31, 2002 and December 31, 2001, intangible assets consisted of
the following (in thousands):

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|                               |  |                       |        |                          |  |           |        |              |  |   |         |   |  |   |        |  
|------------------------------ |  | --------------------- | ------ | ------------------------ |  | --------- | ------ | ------------ |  | - | ------- | - |  | - | ------ | -
|                               |  | Gross Carrying Amount |        | Accumulated Amortization
|                               |  |                       |        |                         
|                               |  | March 31,             |        | December 31,             |  | March 31, |        | December 31,
|                               |  | 2002                  |        | 2001                     |  | 2002      |        | 2001        
|                               |  |                       |        |                          |  |           |        |             
|Amortized intangibles:         |  |                       |        |                          |  |           |        |              |  |   |         |   |  |   |        |  
|Network affiliation agreements |  | $                     | 51,609 |                          |  | $         | 51,609 |              |  | $ | (11,884 | ) |  | $ | (8,543 | )
|Leases                         |  |                       | 4,600  |                          |  |           | 4,600  |              |  |   | (217    | ) |  |   | (332   | )
|Non-compete agreement          |  |                       | 200    |                          |  |           | 200    |              |  |   | (73     | ) |  |   | (21    | )
|                               |  |                       |        |                          |  |           |        |              |  |   |         |   |  |   |        |  
|                               |  | $                     | 56,409 |                          |  | $         | 56,409 |              |  | $ | (12,174 | ) |  | $ | (8,896 | )
|                               |  |                       |        |                          |  |           |        |              |  |   |         |   |  |   |        |  
|Non-amortized intangibles:     |  |                       |        |                          |  |           |        |              |  |   |         |   |  |   |        |  
|FCC licenses                   |  | $                     | 46,466 |                          |  | $         | 46,466 |              |  |   |         |   |  |   |        |  
|Network affiliation agreements |  |                       | 35,784 |                          |  |           | 35,784 |              |  |   |         |   |  |   |        |  
|                               |  |                       |        |                          |  |           |        |              |  |   |         |   |  |   |        |  
|                               |  | $                     | 82,250 |                          |  | $         | 82,250 |              |  |   |         |   |  |   |        |  
|                               |  |                       |        |                          |  |           |        |              |  |   |         |   |  |   |        |  

Estimated amortization expense for the years ending December 31:

|     |  |   |        | 
|---- |  | - | ------ | 
|2002 |  | $ | 13,443 | 
|2003 |  | $ | 13,554 | 
|2004 |  | $ | 13,554 | 
|2005 |  | $ | 1,350  | 
|2006 |  | $ | 1,056  | 
|2007 |  | $ | 1,056  | 

There were no changes in the carrying value of goodwill in the first
quarter of 2002. Goodwill for each segment at March 31, 2002 and December 31,
2001 was as follows:

|                        |  |   |         | 
|----------------------- |  | - | ------- | 
|Outdoor Advertising     |  | $ | 45,018  | 
|Television Broadcasting |  |   | 116,625 | 
|Radio Broadcasting      |  |   | 33,870  | 
|Interactive Media       |  |   |        | 
|                        |  |   |         | 
|                        |  | $ | 195,513 | 
|                        |  |   |         | 

Under the provisions of SFAS No. 142, certain intangible assets are no
longer reported separately, but are included in goodwill. Accordingly, as of
December 31, 2001, intangible assets of $1.0 million in the Radio Broadcasting
segment and $0.3 million in the Television Broadcasting segment were
reclassified to goodwill.

NOTE 6. DEBT

The Company has a bank credit agreement (the 2001 Credit Agreement) that
consists of a $100.0 million term loan (the 2001 Term Loan) and a $20.0
million revolving credit facility (the 2001 Revolver). At March 31, 2002,
outstanding borrowings under the 2001 Term Loan were $91.0 million. There were
no outstanding borrowings under the 2001 Revolver at March 31, 2002. In
addition, the unamortized discount on the 2001 Credit Agreement was $3.1
million at March 31, 2002.

At March 31, 2002, the Company also had outstanding borrowings of $200.0
million under its senior subordinated notes (the 9% Senior Subordinated
Notes) that were issued under an indenture (the Indenture) which allows for
an aggregate principal amount of up to $250.0 million. In addition, at March
31, 2002 there was an unamortized premium of $0.8 million with respect to these
notes.

The Company has obtained waivers of compliance with certain restrictive
covenants of the 2001 Credit Agreement effective for the period December 31,
2001 through May 31, 2002. Pursuant to the terms of the waivers, the Company
cannot access the 2001 Revolver during the waiver period and, if the merger
agreement with Clear Channel is terminated or the FCC disapproves of the merger
with Clear

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Channel for any reason, then the outstanding principal amount under the 2001
Credit Agreement will accrue interest at a rate that is 2% per annum in excess
of the interest rate otherwise payable, with such increased rate retroactive to
April 1, 2002. After May 31, 2002, the Companys lenders would have the right
to accelerate the payment of the Companys indebtedness under the 2001 Credit
Agreement, unless the Company were to obtain an extension of the waivers. In
addition, an acceleration of indebtedness under the 2001 Credit Agreement could
cause an acceleration of the Companys indebtedness under the 9% Senior
Subordinated Notes. As these waivers currently expire prior to December 31,
2002, all outstanding borrowings under the 2001 Credit Agreement and the 9%
Senior Subordinated Notes have been classified as current at March 31, 2002 and
December 31, 2001. If the merger discussed in Note 3 is not consummated by May
31, 2002, the Company will likely need to obtain extensions of the waivers or
make other financing arrangements.

Under the change of control provisions of the 2001 Credit Agreement, all
outstanding borrowings thereunder will be repaid fully upon closing of the
merger with Clear Channel. Under the change of control provisions of the
Indenture, within 30 days after the closing of the merger with Clear Channel,
the Company will be required to make an offer to repurchase all of the
outstanding 9% Senior Subordinated Notes at a price of 101% plus accrued
interest to the date of the repurchase. Such repurchase must occur no less
than 30 days and no later than 45 days after the date of the repurchase offer.

NOTE 7. INDUSTRY SEGMENT INFORMATION

The Company organizes its segments based on the products and services from
which revenues are generated. The Company evaluates segment performance and
allocates resources based on Segment Operating Cash Flow, which is defined as
EBITDA before corporate overhead. The Company defines EBITDA as net revenue
less operating expenses before amortization, depreciation, interest, and other
expenses.

Selected financial information for these segments for the three month
periods ended March 31, 2002 and 2001 is presented as follows:

|                                         |  |                |         |              |  |              |         |             |  |              |        |   |  |   |       |   |  |   |         |  
|---------------------------------------- |  | -------------- | ------- | ------------ |  | ------------ | ------- | ----------- |  | ------------ | ------ | - |  | - | ----- | - |  | - | ------- | -
|                                         |  | Outdoor        |         | Television   |  | Radio        |         | Interactive |  |              |        |  
|                                         |  | Media          |         | Broadcasting |  | Broadcasting |         | Media       |  | Consolidated
|                                         |  |                |         |              |  |              |         |             |  |             
|                                         |  | (in thousands)
|Three Month Period Ended
March 31, 2002: |  |                |         |              |  |              |         |             |  |              |        |   |  |   |       |   |  |   |         |  
|Net revenue                              |  | $              | 12,287  |              |  | $            | 22,151  |             |  | $            | 3,993  |   |  | $ | 48    |   |  | $ | 38,479  |  
|Segment operating expenses               |  |                | (10,875 | )            |  |              | (21,931 | )           |  |              | (4,802 | ) |  |   | (239  | ) |  |   | (37,847 | )
|                                         |  |                |         |              |  |              |         |             |  |              |        |   |  |   |       |   |  |   |         |  
|Segment Operating Cash Flow              |  | $              | 1,412   |              |  | $            | 220     |             |  | $            | (809   | ) |  | $ | (191  | ) |  | $ | 632     |  
|                                         |  |                |         |              |  |              |         |             |  |              |        |   |  |   |       |   |  |   |         |  
|Segment assets                           |  | $              | 96,508  |              |  | $            | 351,222 |             |  | $            | 53,471 |   |  | $ | 1,170 |   |  | $ | 502,371 |  
|Capital expenditures                     |  | $              | 215     |              |  | $            | 28      |             |  | $            | 27     |   |  | $ |      |   |  | $ | 270     |  
|Three Month Period Ended
March 31, 2001: |  |                |         |              |  |              |         |             |  |              |        |   |  |   |       |   |  |   |         |  
|Net revenue                              |  | $              | 17,245  |              |  | $            | 22,874  |             |  | $            | 4,733  |   |  | $ | 21    |   |  | $ | 44,873  |  
|Segment operating expenses               |  |                | (12,705 | )            |  |              | (23,604 | )           |  |              | (5,378 | ) |  |   | (355  | ) |  |   | (42,042 | )
|                                         |  |                |         |              |  |              |         |             |  |              |        |   |  |   |       |   |  |   |         |  
|Segment Operating Cash Flow              |  | $              | 4,540   |              |  | $            | (730    | )           |  | $            | (645   | ) |  | $ | (334  | ) |  | $ | 2,831   |  
|                                         |  |                |         |              |  |              |         |             |  |              |        |   |  |   |       |   |  |   |         |  
|Segment assets                           |  | $              | 107,000 |              |  | $            | 379,709 |             |  | $            | 60,775 |   |  | $ | 1,477 |   |  | $ | 548,961 |  
|Capital expenditures                     |  | $              | 1,188   |              |  | $            | 2,442   |             |  | $            | 400    |   |  | $ | 421   |   |  | $ | 4,451   |  

A reconciliation from the segment information to the consolidated balances
for Segment Operating Cash Flow, segment assets, and segment capital
expenditures is set forth below:

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|                                                                           |  |                            |         |      |  |   |         |  
|-------------------------------------------------------------------------- |  | -------------------------- | ------- | ---- |  | - | ------- | -
|                                                                           |  | Three Months Periods Ended
|                                                                           |  | March 31, (in thousands)  
|                                                                           |  |                           
|                                                                           |  | 2002                       |         | 2001
|                                                                           |  |                            |         |     
|Segment Operating Cash Flow                                                |  | $                          | 632     |      |  | $ | 2,831   |  
|Corporate overhead                                                         |  |                            | (3,305  | )    |  |   | (5,836  | )
|                                                                           |  |                            |         |      |  |   |         |  
|EBITDA                                                                     |  |                            | (2,673  | )    |  |   | (3,005  | )
|Depreciation and amortization                                              |  |                            | (8,105  | )    |  |   | (10,858 | )
|Interest expense, net                                                      |  |                            | (6,769  | )    |  |   | (9,548  | )
|Other                                                                      |  |                            | (189    | )    |  |   | (25     | )
|                                                                           |  |                            |         |      |  |   |         |  
|Loss from continuing operations before income
taxes and extraordinary item |  | $                          | (17,736 | )    |  | $ | (23,436 | )
|                                                                           |  |                            |         |      |  |   |         |  
|Segment assets                                                             |  | $                          | 502,371 |      |  | $ | 548,961 |  
|Corporate assets                                                           |  |                            | 53,816  |      |  |   | 43,352  |  
|Assets of discontinued operations                                          |  |                            | 1,246   |      |  |   | 70,926  |  
|                                                                           |  |                            |         |      |  |   |         |  
|Consolidated total assets                                                  |  | $                          | 557,433 |      |  | $ | 663,239 |  
|                                                                           |  |                            |         |      |  |   |         |  
|Segment capital expenditures                                               |  | $                          | 270     |      |  | $ | 4,451   |  
|Corporate capital expenditures                                             |  |                            |        |      |  |   | 257     |  
|Capital expenditures of discontinued operations                            |  |                            |        |      |  |   | 1,081   |  
|                                                                           |  |                            |         |      |  |   |         |  
|Consolidated capital expenditures                                          |  | $                          | 270     |      |  | $ | 5,789   |  
|                                                                           |  |                            |         |      |  |   |         |  




ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Statements appearing in this section, Managements Discussion and Analysis
of Financial Condition and Results of Operations, and elsewhere in this report,
which are not historical in nature (including the discussions of the effects of
recent acquisitions and dispositions, business transactions, credit agreements
and similar information), are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. We caution our
shareholders and potential investors that any forward-looking statements or
projections set forth in this section and elsewhere in the annual report are
subject to risks and uncertainties which may cause actual results to differ
materially from those projected. After the date of this Annual Report, we will
not make any public announcements updating any forward-looking statement
contained in this report.

Important factors that could cause the results to differ materially from
those expressed in this section or elsewhere in the annual report include:



| |  |  | material adverse changes in general economic conditions,
including changes in inflation and interest rates, changes in demand
for advertising nationally or in the local markets that we serve,
including cyclical aspects such as political advertising;                                                                                     
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | recessionary influences in the regional markets that we
serve;                                                                                                                                                                                                                                                                                
|
| |  |  | changes in laws and regulations affecting the outdoor
advertising and television and radio broadcasting businesses,
including changes in the FCCs treatment of local marketing
agreements and related matters, and the possible inability to obtain
FCC consent to proposed or pending acquisitions or dispositions of
broadcasting stations;
|
| |  |  | competitive factors in the outdoor advertising, television
broadcasting, radio broadcasting, and interactive media businesses;                                                                                                                                                                                                                
|
| |  |  | expiration or non-renewal of broadcasting licenses and local
marketing agreements;                                                                                                                                                                                                                                                            

8



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| |  |  | labor matters, changes in labor costs, loss of key employees,
including key broadcasting employees, renegotiation of labor
contracts, and risk of work stoppages or strikes;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | matters relating to our level of indebtedness, including
restrictions imposed by financial covenants;                                                                       
|
| |  |  | material changes to accounting standards.                                                                                                                                   

Overview

We reported a net loss of $11.7 million for the first quarter of 2002,
compared to a net loss of $15.2 million for the first quarter of 2001. Our net
loss for 2002 includes an after tax gain on sale of our discontinued sports &
entertainment operations of $0.5 million and an extraordinary item of $0.6
million consisting of merger costs. Net revenue for the first quarter of 2002
decreased over the same period last year by $6.4 million, or 14%, while our
EBITDA (as defined below) improved from a loss of $3.0 million for the first
quarter of 2001 to a loss of $2.7 million for the first quarter of 2002.

On October 5, 2001, we entered into a merger agreement (the Merger
Agreement) with Clear Channel Communications, Inc. (Clear Channel). Under
the terms of the Merger Agreement, each share of our common stock and our Class
B common stock will be converted into the right to receive 0.35 of a share of
the common stock of Clear Channel. The transaction is generally intended to be
tax-free to our stockholders. The transaction, which has been approved by our
stockholders and which we expect to be consummated in the second quarter of
2002, is subject to customary regulatory approvals and closing conditions.

As with many media companies, our acquisitions and dispositions have
resulted in significant non-cash and non-recurring charges to income. For this
reason, in addition to net income, our management believes that EBITDA (defined
as net revenue less operating expenses before amortization, depreciation,
interest, and other expenses) is an appropriate measure of our financial
performance. Similarly, we believe that Segment Operating Cash Flow (defined
as EBITDA before corporate overhead) is an appropriate measure of our segments
financial performance. These measures exclude certain expenses that management
does not consider to be costs of ongoing operations. We use EBITDA to pay
interest and principal on our long-term debt as well as to finance capital
expenditures. EBITDA and Segment Operating Cash Flow, however, are not to be
considered alternatives to net income as an indicator of our operating
performance or to cash flows as a measure of our liquidity.

Results of Operations

The following tables set forth certain historical financial and operating
data for the three month periods ended March 31, 2002 and 2001, including net
revenue, operating expenses, and Segment Operating Cash Flow information by
segment:

|                           |  |                          |        |                                     |        |             |       |         |       |             |        |  |        |         |       |   |       |  
|-------------------------- |  | ------------------------ | ------ | ----------------------------------- | ------ | ----------- | ----- | ------- | ----- | ----------- | ------ |  | ------ | ------- | ----- | - | ----- | -
|                           |  |                          |        | Three Month Periods Ended March 31,
|                           |  |                          |        |                                    
|                           |  |                          |        | 2002                                |        | 2001       
|                           |  |                          |        |                                     |        |            
|                           |  |                          |        | (Dollars in thousands)             
|                           |  |                          |        |                                     |        |             |       | As % of |       |             |        |  |        | As % of
|                           |  |                          |        | Amount                              |        | Net Revenue |       | Amount  |       | Net Revenue
|                           |  |                          |        |                                     |        |             |       |         |       |            
|Net revenue                |  | $                        | 38,479 |                                     |        |             | 100.0 | %       |       | $           | 44,873 |  |        |         | 100.0 | %
|Segment operating expenses |  |                          | 37,847 |                                     |        |             | 98.4  | %       |       |             | 42,042 |  |        |         | 93.7  | %
|Corporate overhead         |  |                          | 3,305  |                                     |        |             | 8.6   | %       |       |             | 5,836  |  |        |         | 13.0  | %
|                           |  |                          |        |                                     |        |             |       |         |       |             |        |  |        |         |       |  
|                           |  | Total operating expenses |        |                                     | 41,152 |             |       |         | 106.9 | %           |        |  | 47,878 |         |       |   | 106.7 | %
|                           |  |                          |        |                                     |        |             |       |         |       |             |        |  |        |         |       |  

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|                                                                           |                                       |                      |         |                                     |        |             |       |         |      |             |         |        |        |         |       |      |      |  
|-------------------------------------------------------------------------- | ------------------------------------- | -------------------- | ------- | ----------------------------------- | ------ | ----------- | ----- | ------- | ---- | ----------- | ------- | ------ | ------ | ------- | ----- | ---- | ---- | -
|                                                                           |                                       |                      |         | Three Month Periods Ended March 31,
|                                                                           |                                       |                      |         |                                    
|                                                                           |                                       |                      |         | 2002                                |        | 2001       
|                                                                           |                                       |                      |         |                                     |        |            
|                                                                           |                                       |                      |         | (Dollars in thousands)             
|                                                                           |                                       |                      |         |                                     |        |             |       | As % of |      |             |         |        |        | As % of
|                                                                           |                                       |                      |         | Amount                              |        | Net Revenue |       | Amount  |      | Net Revenue
|                                                                           |                                       |                      |         |                                     |        |             |       |         |      |            
|EBITDA                                                                     |                                       |                      | (2,673  | )                                   |        |             | (6.9  | )%      |      |             | (3,005  | )      |        |         | (6.7  | )%  
|Other expenses (income):                                                   |                                       |                      |         |                                     |        |             |       |         |      |             |         |        |        |         |       |     
|                                                                           | Depreciation and amortization expense |                      |         | 8,105                               |        |             |       | 21.1    | %    |             |         | 10,858 |        |         |       | 24.2 | %   
|                                                                           | Interest expense                      |                      |         | 6,769                               |        |             |       | 17.6    | %    |             |         | 9,548  |        |         |       | 21.3 | %   
|                                                                           | Other                                 |                      |         | 189                                 |        |             |       | 0.5     | %    |             |         | 25     |        |         |       | 0.1  | %   
|                                                                           |                                       |                      |         |                                     |        |             |       |         |      |             |         |        |        |         |       |     
|                                                                           |                                       | Total other expenses |         |                                     | 15,063 |             |       |         | 39.1 | %           |         |        | 20,431 |         |       |      | 45.5 | %
|                                                                           |                                       |                      |         |                                     |        |             |       |         |      |             |         |        |        |         |       |     
|Loss from continuing operations before
income taxes and extraordinary item |                                       |                      | (17,736 | )                                   |        |             | (46.1 | )%      |      |             | (23,436 | )      |        |         | (52.2 | )%  
|Income tax benefit                                                         |                                       |                      | 6,190   |                                     |        |             | 16.1  | %       |      |             | 8,200   |        |        |         | 18.3  | %   
|                                                                           |                                       |                      |         |                                     |        |             |       |         |      |             |         |        |        |         |       |     
|Loss from continuing operations before
extraordinary item                  |                                       |                      | (11,546 | )                                   |        |             | (30.0 | )%      |      |             | (15,236 | )      |        |         | (34.0 | )%  
|Gain on disposal of discontinued operations,
net of tax                    |                                       |                      | 458     |                                     |        |             | 1.2   | %       |      |             |        |        |        |         |      |     
|Extraordinary item                                                         |                                       |                      | (595    | )                                   |        |             | (1.5  | )%      |      |             |        |        |        |         |      |     
|                                                                           |                                       |                      |         |                                     |        |             |       |         |      |             |         |        |        |         |       |     
|Net loss                                                                   |                                       | $                    | (11,683 | )                                   |        |             | (30.4 | )%      |      | $           | (15,236 | )      |        |         | (34.0 | )%  
|                                                                           |                                       |                      |         |                                     |        |             |       |         |      |             |         |        |        |         |       |     

|                                          |  |                         |                         |                                   |       |                           |        |      |       |        |        |   
|----------------------------------------- |  | ----------------------- | ----------------------- | --------------------------------- | ----- | ------------------------- | ------ | ---- | ----- | ------ | ------ | --
|                                          |  |                         |                         |                                   |       | Three Month Periods Ended
|                                          |  |                         |                         |                                   |       | March 31                 
|                                          |  |                         |                         |                                   |       |                          
|                                          |  |                         |                         |                                   |       | 2002                      |        | 2001
|                                          |  |                         |                         |                                   |       |                           |        |     
|                                          |  |                         |                         |                                   |       | (Dollars in Thousands)   
|Net revenue:                              |  |                         |                         |                                   |       |                           |        |     
|                                          |  |                         | Outdoor media           |                                   | $     | 12,287                    |        |      | $     | 17,245 |       
|                                          |  |                         | Television broadcasting |                                   |       | 22,151                    |        |      |       | 22,874 |       
|                                          |  |                         | Radio broadcasting      |                                   |       | 3,993                     |        |      |       | 4,733  |       
|                                          |  |                         | Interactive media       |                                   |       | 48                        |        |      |       | 21     |       
|                                          |  |                         |                         |                                   |       |                           |        |     
|                                          |  |                         |                         | Total net revenue                 |       | $                         | 38,479 |      |       | $      | 44,873 |   
|                                          |  |                         |                         |                                   |       |                           |        |     
|Segment operating expenses:               |  |                         |                         |                                   |       |                           |        |     
|                                          |  |                         | Outdoor media           |                                   | $     | 10,875                    |        |      | $     | 12,705 |       
|                                          |  |                         | Television broadcasting |                                   |       | 21,931                    |        |      |       | 23,604 |       
|                                          |  |                         | Radio broadcasting      |                                   |       | 4,802                     |        |      |       | 5,378  |       
|                                          |  |                         | Interactive media       |                                   |       | 239                       |        |      |       | 355    |       
|                                          |  |                         |                         |                                   |       |                           |        |     
|                                          |  |                         |                         | Total segment operating expenses  |       | $                         | 37,847 |      |       | $      | 42,042 |   
|                                          |  |                         |                         |                                   |       |                           |        |     
|Segment Operating Cash Flow and EBITDA:   |  |                         |                         |                                   |       |                           |        |     
|                                          |  |                         | Outdoor media           |                                   | $     | 1,412                     |        |      | $     | 4,540  |       
|                                          |  |                         | Television broadcasting |                                   |       | 220                       |        |      |       | (730   | )     
|                                          |  |                         | Radio broadcasting      |                                   |       | (809                      | )      |      |       | (645   | )     
|                                          |  |                         | Interactive media       |                                   |       | (191                      | )      |      |       | (334   | )     
|                                          |  |                         |                         |                                   |       |                           |        |     
|                                          |  |                         |                         | Total Segment Operating Cash Flow |       |                           | 632    |      |       |        | 2,831  |   
|                                          |  |                         | Corporate overhead      |                                   |       | (3,305                    | )      |      |       | (5,836 | )     
|                                          |  |                         |                         |                                   |       |                           |        |     
|                                          |  |                         |                         | Total EBITDA                      |       | $                         | (2,673 | )    |       | $      | (3,005 | ) 
|                                          |  |                         |                         |                                   |       |                           |        |     
|Change in net revenue from prior periods: |  |                         |                         |                                   |       |                           |        |     
|                                          |  | Outdoor media           |                         |                                   | (28.8 | )%                        |        |      | (2.7  | )%    
|                                          |  | Television broadcasting |                         |                                   | (3.2  | )%                        |        |      | 1.5   | %     
|                                          |  | Radio broadcasting      |                         |                                   | (15.6 | )%                        |        |      | (27.5 | )%    
|                                          |  | Interactive media       |                         |                                   | 128.6 | %                         |        |      |      |       
|                                          |  |                         |                         | Change in total net revenue       |       |                           | (14.2  | )%   |       |        | (4.1   | )%

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|                                                           |                         |  |      |                                                               |    |                           |      |          |    |  |      |  
|---------------------------------------------------------- | ----------------------- |  | ---- | ------------------------------------------------------------- | -- | ------------------------- | ---- | -------- | -- |  | ---- | -
|                                                           |                         |  |      |                                                               |    | Three Month Periods Ended
|                                                           |                         |  |      |                                                               |    | March 31                 
|                                                           |                         |  |      |                                                               |    |                          
|                                                           |                         |  |      |                                                               |    | 2002                      |      | 2001    
|                                                           |                         |  |      |                                                               |    |                           |      |         
|                                                           |                         |  |      |                                                               |    | (Dollars in Thousands)   
|Segment operating expenses as a % of segment net revenue:  |                         |  |      |                                                               |    |                           |      |         
|                                                           | Outdoor media           |  |      | 88.5                                                          | %  |                           |      | 73.7     | % 
|                                                           | Television broadcasting |  |      | 99.0                                                          | %  |                           |      | 103.2    | % 
|                                                           | Radio broadcasting      |  |      | 120.3                                                         | %  |                           |      | 113.6    | % 
|                                                           | Interactive media       |  |      | 497.9                                                         | %  |                           |      | 1,690.5  | % 
|                                                           |                         |  |      | Total segment operating expenses as a % of total net
revenue  |    |                           | 98.4 | %        |    |  | 93.7 | %
|Segment Operating Cash Flow as a % of segment net revenue: |                         |  |      |                                                               |    |                           |      |         
|                                                           | Outdoor media           |  |      | 11.5                                                          | %  |                           |      | 26.3     | % 
|                                                           | Television broadcasting |  |      | 1.0                                                           | %  |                           |      | (3.2     | )%
|                                                           | Radio broadcasting      |  |      | (20.3                                                         | )% |                           |      | (13.6    | )%
|                                                           | Interactive media       |  |      | (397.9                                                        | )% |                           |      | (1,590.5 | )%
|                                                           |                         |  |      | Total Segment Operating Cash Flow as a % of total net
revenue |    |                           | 1.6  | %        |    |  | 6.3  | %
|EBITDA as a % of total net revenue                         |                         |  | (6.9 | )%                                                            |    |                           | (6.7 | )%      

Three Month Period Ended March 31, 2002 Compared With Three Month Period Ended
March 31, 2001

Net Revenue.Our net revenue for the first quarter of 2002 was $38.5
million. This represented a decrease of $6.4 million, or 14%, compared to
$44.9 million in the first quarter of 2001. Changes in net revenue were as
follows:



| |  |  | Outdoor Media.Net revenue for the first quarter of 2002 from our
outdoor media segment decreased by $4.9 million, or 28%, compared to
the first quarter of 2001. This decrease resulted primarily from a
decrease in national sales.                          
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Television Broadcasting.Net revenue for the first quarter of 2002
from our television broadcasting segment decreased by $0.7 million, or
3%, compared to the first quarter of 2001. This decrease was due
mainly to a decline in national advertising revenue.
|
| |  |  | Radio Broadcasting.Net revenue for the first quarter of 2002 from
our radio broadcasting segment decreased by $0.7 million, or 15%,
compared to the first quarter of 2001.This decrease was due primarily
to a decrease in both national and local sales.     

Segment Operating Expenses.Our segment operating expenses (which exclude
corporate overhead) for the first quarter of 2002 were $37.8 million. This
represented a decrease of $4.2 million, or 10%, compared to $42.0 million for
the first quarter of 2001. Changes in segment operating expenses were as
follows:



| |  |  | Outdoor Media.Operating expenses for the first quarter of 2002
from our outdoor media segment decreased by $1.8 million, or 14%,
compared to the first quarter of 2001 as we implemented cost reduction
initiatives in the second quarter of 2001.                                                 
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Television Broadcasting.Operating expenses for the first quarter
of 2002 from our television broadcasting segment decreased by $1.7
million, or 7%, compared to the first quarter of 2001. This decrease
was due primarily to cost reduction initiatives implemented in the
second quarter of 2001.

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| |  |  | Radio Broadcasting.Operating expenses for the first quarter of
2002 from our radio broadcasting segment decreased by $0.6 million, or
11%, compared to the first quarter of 2001. This decrease was due
primarily to cost reduction initiatives implemented in the second
quarter of 2001.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Corporate Overhead Expenses.Our corporate overhead expenses for the
first quarter of 2002 were $3.3 million. This represented a decrease of $2.5
million, or 43%, compared to the first quarter of 2001. This decrease was a
result primarily of cost reduction initiatives implemented in the second
quarter of 2001.

EBITDA.Our EBITDA for the first quarter of 2002 was a loss of $2.7
million. This represented an improvement of $0.3 million, or 10%, compared to
an EBITDA loss of $3.0 million for the first quarter of 2001.

Depreciation and Amortization Expenses.Our depreciation and amortization
expenses were $8.1 million for the first quarter of 2002. This represented a
decrease of $2.8 million, or 25%, compared to $10.9 million for the first
quarter of 2001. This decrease is due primarily to the implementation of SFAS
No. 142, Goodwill and Other Intangible Assets. As more fully described in Note
2 to the Consolidated Financial Statements, under SFAS No. 142, goodwill and
certain intangible assets deemed to have an indefinite useful life are no
longer amortized. In addition, the implementation of this standard resulted in
changes in the estimated remaining useful lives of some of our intangible
assets.

Interest Expense, net.Our interest expense was $6.8 million for the
first quarter of 2002. This represented a decrease of $2.7 million, or 28%,
compared to the first quarter of 2001. This decrease primarily reflects lower
average debt balances and interest rates in the first quarter of 2002 compared
to the first quarter of 2001.

Income Tax Benefit.We recognized an income tax benefit of $6.2 million
for the first quarter of 2002 based on our loss from continuing operations
before income taxes of $17.7 million. For the first quarter of 2001, we
recorded an income tax benefit of $8.2 million, based on our loss from
continuing operations before income taxes of $23.4 million.

Discontinued Operations.As more fully described in Note 4 to the
Consolidated Financial Statements, we recorded an after-tax gain of $0.5
million in the first quarter of 2002 on the sale of our discontinued sports &
entertainment operations. There were no similar transactions in the first
quarter of 2001.

Extraordinary Item.We incurred costs of $0.6 million in the first
quarter of 2002 in connection with our pending merger with Clear Channel,
consisting primarily of legal fees. There were no such costs in the first
quarter of 2001.

Net Loss.Our net loss was $11.7 million for the first quarter of 2002,
compared to $15.2 million for the first quarter of 2001. This was due
primarily to decreases in amortization expense and interest expense, offset
partially by a lower income tax benefit in the first quarter of 2002 compared
to 2001.

Liquidity and Capital Resources

Cash used in operating activities was $7.0 million in the first quarter of
2002 compared to $25.7 million in the first quarter of 2001. We utilized
restricted cash of $9.0 million from our 2001 Credit Agreement to fund an
interest payment on our 9% Senior Subordinated Notes in January 2002. Our
working capital deficit increased from $234.0 million at December 31, 2001 to
$234.8 million at March 31, 2002.

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We expended $0.3 million for capital expenditures in the first quarter of
2002, compared to $5.8 million in the corresponding period in 2001. Capital
expenditures in the first quarter of 2001 were primarily for equipment to
complete our Digital CentralCasting implementation, automated news production
systems and news sets, upgrades to our operating facilities for television
station KGPE (TV) in Fresno, California and for outdoor advertising structures
in Washington.

For the periods presented, we financed our working capital and long-term
liquidity needs, including acquisitions and capital expenditures, primarily
from proceeds from the sale of our discontinued sports &
entertainment operations in April 2001 and bank borrowings.

Following is a summary of our financing activities and debt structure:

On September 7, 2001, we replaced our 1999 Credit Agreement with a new
$120.0 million credit agreement (the 2001 Credit Agreement), consisting of a
$100.0 million term loan (the 2001 Term Loan) and a $20.0 million revolving
credit facility (the 2001 Revolver). The 2001 Revolver includes up to $5.0
million in standby letters of credit. The transaction resulted in a charge of
$1.6 million, net of applicable taxes of $0.9 million, consisting of the
write-off of deferred financing costs. In addition, the transaction included a
discount of $3.6 million, which is being amortized in interest expense over the
term of the 2001 Credit Agreement.

Principal payments under the 2001 Term Loan are due in quarterly
installments of $250,000 each for the period commencing on December 31, 2001
and ending on September 30, 2005, and $24.0 million each for the period
commencing on December 31, 2005 and ending on August 31, 2006. Any outstanding
borrowings under the 2001 Revolver will be due on August 31, 2004. At March
31, 2002, outstanding borrowings under the 2001 Term Loan were $91.0 million.
The unamortized discount at March 31, 2002 was $3.1 million. There were no
outstanding borrowings under the 2001 Revolver at March 31, 2002.

We can choose to have interest calculated at rates based on either LIBOR
or a base rate plus defined margins. The interest rate applicable to the 2001
Revolver will be subject to certain reductions based on our interest coverage
ratio. Commitment fees on the unused portion of the 2001 Revolver are payable
quarterly at an annual rate of 1.5%. At March 31, 2002, the average annual
interest rate on borrowings outstanding under the 2001 Term Loan was 6.9%.

At March 31, 2002, we also had outstanding borrowings of $200.0 million
under senior subordinated notes (the 9% Senior Subordinated Notes) that were
issued under an indenture (the Indenture) which allows for an aggregate
principal amount of up to $250.0 million. These notes bear interest at 9%,
which is payable semi-annually in January and July. Principal is payable in
full in January 2009.

We have pledged substantially all of our subsidiaries outstanding stock
and assets as collateral for amounts due under the 2001 Credit Agreement and
our subsidiaries have guaranteed our obligations under both the 2001 Credit
Agreement and the Indenture. Thus, if we default under the 2001 Credit
Agreement, the lenders may take direct action against our subsidiaries and may
take possession of and sell some or substantially all of our subsidiaries or
their assets.

In addition, the 2001 Credit Agreement and the Indenture restrict, among
other things, our ability to borrow, pay dividends, repurchase outstanding
shares of our stock, sell or transfer our assets, acquire assets, or make
investments. They also contain restrictive covenants requiring us to maintain
certain financial ratios.

We have obtained waivers of compliance with certain restrictive covenants
of the 2001 Credit Agreement effective for the period December 31, 2001 through
May 31, 2002. Pursuant to the terms of

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the waivers, we cannot access the 2001 Revolver during the waiver period
and, if the merger agreement with Clear Channel is terminated or the FCC
disapproves of the merger with Clear Channel for any reason, then the
outstanding principal amount under the 2001 Credit Agreement will accrue
interest at a rate that is 2% per annum in excess of the interest rate
otherwise payable, with such increased rate retroactive to April 1, 2002.
After May 31, 2002, our lenders would have the right to accelerate the payment
of the our indebtedness, unless we were to obtain an extension of the waivers.
In addition, an acceleration of indebtedness under the 2001 Credit Agreement
could cause an acceleration of our indebtedness under the 9% Senior
Subordinated Notes. As these waivers currently expire prior to December 31,
2002, all outstanding borrowings under the 2001 Credit Agreement and the 9%
Senior Subordinated Notes have been classified as current at March 31, 2002 and
December 31, 2001. If the merger with Clear Channel is not consummated by May
31, 2002, we will likely need to obtain extensions of the waivers or make other
financing arrangements.

Under the change of control provisions of the 2001 Credit Agreement, all
outstanding borrowings thereunder will be repaid fully upon closing of the
merger with Clear Channel. Under the change of control provisions of the
Indenture, within 30 days after the closing of the merger with Clear Channel,
we will be required to make an offer to repurchase all of the outstanding 9%
Senior Subordinated Notes at a price of 101% plus accrued interest to the date
of the repurchase. Such repurchase must occur no less than 30 days and no
later than 45 days after the date of the repurchase offer.

Following are items that may impact our liquidity in 2002:



| |  |  | After May 31, 2002, we would likely need to extend our
waivers of compliance with certain restrictive covenants of our 2001
Credit Agreement. It is uncertain as to whether we would be able to
obtain such extensions of the waivers.                                                                                                
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | National advertising may continue to decrease or remain at
current levels as a result of the current national economic
conditions. Our liquidity may be impacted negatively depending on
the magnitude of this trend, its duration, and our ability to offset
decreased national sales with increased local sales and cost
reductions.
|
| |  |  | Under current FCC regulations, we will need to construct DTV
facilities for several of our television stations by November 1,
2002. We estimate that this will cost approximately $9 to $11
million.                                                                                                                                  

Critical Accounting Policies

Our significant accounting policies are included in Note 1 to the
Consolidated Financial Statements included in our Annual Report on Form 10-K
for the year ended December 31, 2001. These policies, along with the
underlying assumptions and judgments made in their application, may have a
significant impact on our consolidated financial statements. We identify the
most critical accounting policies as those that are the most pervasive and
important to the portrayal of our financial position and results of operations,
and that require the most difficult, subjective and/or complex judgments and
estimates about matters that are inherently uncertain. Following are our most
critical accounting policies.

Allowance for Doubtful Accounts

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We maintain an allowance for doubtful accounts for estimated losses
resulting from the inability of our customers to make required payments. We
determine the adequacy of this allowance by regularly reviewing our accounts
receivable aging and evaluating individual customer receivables. This involves
considering the customers financial condition and credit history, current
economic conditions, and overall historical bad debt experience. If the
financial condition of our customers were to deteriorate, resulting in an
impairment of their ability to make payments, additional allowances may be
required.

Business Combinations  Purchase Price Allocation

During 1999 and 2000, we completed acquisitions of other companies. The
amounts assigned to the identifiable assets and liabilities acquired in
connection with these acquisitions were based on estimated fair values as of
the date of the acquisitions, with the remainder recorded as goodwill. The
fair values were determined by our management, generally based on information
supplied by the management of the acquired entities, and valuations prepared by
independent appraisal experts.

In connection with these acquisitions, we have recorded a significant
amount of intangible assets, consisting primarily of FCC licenses, network
affiliation agreements, and goodwill. The appraisers utilized a
discounted cash flow analysis to determine the fair values of the FCC licenses
and network affiliation agreements.

Valuation of Investments

We hold investments in several closely held companies. These investments
are carried at cost, less adjustments to reflect any impairment deemed to be
other than temporary. The investments are reviewed on a regular basis for the
existence of facts or circumstances that may suggest impairment. This review
includes an analysis of the companies historical financial condition, results
of operations, and cash flows, as well as forecasts of future financial
performance. It also includes information obtained from discussions with
members of the companies senior management team and measurements based on the
pricing of recent debt and/or equity financings and/or the anticipated pricing
of financing expected over the coming year. If an impairment is identified and
considered to be other than temporary, the impairment loss is measured by
comparing the estimated fair value to the carrying value of the investment.

Long-lived Assets  Impairment

We assess our long-lived assets, including identifiable intangible assets,
for impairment whenever events or changes in circumstances indicate that the
carrying value may not be recoverable. Factors we consider important that
could trigger an impairment review include the following:



| |  |  | a significant underperformance relative to historical or
projected future operating results that is other than temporary;
| | - |  | -------------------------------------------------------------------------------------------------------------------------
|
| |  |  | a significant change in the manner of our use of the acquired
asset or the strategy for our overall business;            
|
| |  |  | a significant negative industry or economic trend that is other than temporary;                                          
|
| |  |  | our market capitalization relative to net book value.                                                                    

In addition, we considered the value of our business represented by the common
stock exchange ratio under terms of our merger with Clear Channel. The common
stock exchange ratio, based on the closing price of Clear Channel shares on
October 5, 2001, the trading day immediately prior to the date of public
announcement of the merger, represented a 28% premium to the closing share
price of our common stock

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on October 5, 2001. During the period from October 5, 2001 through May 1,
2002, based on the trading price of Clear Channel common stock, this premium
has been maintained or increased.

In accordance with the new rules under Statement of Financial Accounting
Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, which we
adopted effective January 1, 2002, we evaluate goodwill and identifiable
intangible assets with indefinite lives for impairment on an annual basis.

The fair value of our reporting units is assessed generally by utilizing a
discounted cash flow or sales of comparable assets approach. If the fair value
is less than the carrying value, then the fair value of their assets or asset
groups is determined and any identified impairment is recognized.

New Accounting Standards

We adopted SFAS No. 142, Goodwill and Other Intangible Assets, effective
January 1, 2002. Under the new rule, goodwill and intangible assets deemed to
have indefinite lives are no longer amortized, but are subject to annual
impairment tests in accordance with the Statement. Our intangible assets for
FCC licenses and certain network affiliation agreements are considered to have
indefinite lives under SFAS No. 142. In addition, the adoption of SFAS No. 142
resulted in changes to the useful lives of the network affiliation agreements
that do not have an indefinite life. As more fully described in Note 2 to the
Consolidated Financial Statements, the impact of these changes on our net loss
and net loss per share for the first quarter 2001, as if we had adopted SFAS
No. 142 effective January 1, 2001, was to decrease our net loss from $15.2
million to $11.0 million and decrease our net loss per share from $0.43 to
$0.31.

We have completed the first step in our evaluation of impairment with
respect to goodwill. The results of this evaluation indicate that goodwill in
certain reporting units within our television broadcasting segment may be
impaired. We are proceeding with the second step of the evaluation process in
accordance with SFAS No. 142 in order to determine whether such goodwill is
impaired and, if so, to record the impairment. This evaluation will be
completed by the fourth quarter of 2002.

We also adopted SFAS No. 144, Accounting for the Impairment or Disposal of
Ling-Lived Assets, effective January 1, 2002. SFAS No. 144 supersedes SFAS No.
121, Accounting for the Impairment of Long-lived Assets and for Long-Lived
Assets to Be Disposed Of, providing a single accounting model for long-lived
assets to be disposed of. In addition SFAS No. 144 amends certain provisions
of Accounting Principles Board Opinion No. 30, Reporting the Results of
Operations  Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions, with
respect to the accounting for discontinued operations. The adoption of SFAS
No. 144 had no impact on our consolidated financial statements.




ITEM 3  QUANTITATIVE AND
QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

There are no material
changes in information about market risks that was
provided in the Companys Form 10-K for the year ended December 31, 2001.

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PART II  OTHER INFORMATION




ITEM 1  LEGAL PROCEEDINGS

Malecki v. The Ackerley Group, Inc.In our Annual Report on Form 10-K for
the year ended December 31, 2001, we reported the following: On February 25,
2002, a complaint was filed in the Superior Court of Washington against The
Ackerley Group, Inc. by James Malecki, a photographer in Seattle, Washington,
who in 1998 provided photography services to the Company. The complaint
alleges that a contract existed between the Company and plaintiff and that the
Company breached that alleged contract by not returning certain photographs to
plaintiff. Plaintiff claims damages in excess of $1.5 million plus interest
and attorneys fees as redress for the alleged breach. There
have been no material developments in the case since the filing of
our Annual Report on Form 10-K.




ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K



|(a) |  | Exhibits: None      
|--- |  | --------------------
|   
|(b) |  | Reports on Form 8-K:



| | (1) |  | Current Report on Form 8-K, filed January 24, 2002, relating
to the approval by the Companys shareholders of the merger with
Clear Channel Communications, Inc. and the related agreement and
plan of merger.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                    |                                                                                                                                             |                    
|------------------- | ------------------------------------------------------------------------------------------------------------------------------------------- | -------------------
|                    | THE ACKERLEY GROUP, INC.                                                                                                                   
|                   
|DATED: May 14, 2002 | By:                                                                                                                                         | /s/ Kevin E. Hylton
|                    |                                                                                                                                            
|                    | Kevin E. Hylton
Senior Vice President, Chief Financial Officer and Assistant Secretary
(Authorized Officer and Principal Financial Officer)

18