##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from to
 Commission file number: 333-80523
 SUSQUEHANNA MEDIA CO.
  DELAWARE
    
    23-2722964(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 140 East Market StreetYork, Pennsylvania 17401(717) 848-5500(Address, including zip code and telephonenumber, including area code, ofregistrants principal executiveoffices)
 
 þ o
 o þ
 o þ




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TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    2Condensed Consolidated Balance Sheets
    
    
    2Condensed Consolidated Statements of Operations
    
    
    3Condensed Consolidated Statements of Cash Flows
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    8Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    15Item 4. Controls and Procedures
    
    
    16PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    16Item 6. Exhibits
    
    
    16Signature
    
    
    17EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 SUSQUEHANNA MEDIA CO. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
  September 30, 2005
    
    
    December 31, 2004(Unaudited)ASSETSCurrent AssetsAccounts receivable, less allowance for doubtful
accounts of $2,152 in 2005 and $1,822 in 2004
    
    $
    51,421
    
    
    $
    50,332Other current assets
    
    
    6,142
    
    
    
    7,278Total Current Assets
    
    
    57,563
    
    
    
    57,610Property, Plant and Equipment, at costLand
    
    
    6,430
    
    
    
    6,233Buildings and improvements
    
    
    27,030
    
    
    
    26,722Equipment
    
    
    349,360
    
    
    
    334,471Construction-in-progress
    
    
    11,949
    
    
    
    14,872394,769
    
    
    
    382,298Accumulated depreciation and amortization
    
    
    199,417
    
    
    
    182,549Property, Plant and Equipment, net
    
    
    195,352
    
    
    
    199,749Intangible Assets and Goodwill, net
    
    
    509,610
    
    
    
    514,299Investments and Other Assets
    
    
    28,381
    
    
    
    19,323$
    790,906
    
    
    $
    790,981LIABILITIES AND STOCKHOLDERS DEFICITCurrent LiabilitiesCash overdrafts
    
    $
    3,325
    
    
    $
    1,428Current portion of long-term debt
    
    
    12,467
    
    
    
    3,368Accounts payable
    
    
    8,573
    
    
    
    13,181Accrued employee-related costs
    
    
    17,926
    
    
    
    12,812Accrued income taxes
    
    
    6,465
    
    
    
    11,781Deferred income taxes
    
    
    5,573
    
    
    
    5,114Accrued interest
    
    
    10,412
    
    
    
    7,564Accrued franchise and licensing fees
    
    
    4,406
    
    
    
    2,864Deferred income
    
    
    3,958
    
    
    
    3,943Judgment payable
    
    
    10,134
    
    
    
    10,105Other current liabilities
    
    
    6,424
    
    
    
    8,206Total Current Liabilities
    
    
    89,663
    
    
    
    80,366Long-term Debt
    
    
    548,076
    
    
    
    573,864Other Liabilities
    
    
    14,896
    
    
    
    13,964Deferred Income Taxes
    
    
    79,941
    
    
    
    74,894Minority Interests
    
    
    62,059
    
    
    
    68,499Stockholders DeficitPreferred stock  Voting, 7% cumulative, $100 par
value, authorized 110,000 shares
    
    
    7,050
    
    
    
    7,050Common stock  Voting, $1 par value, authorized 1,100,000
shares
    
    
    1,100
    
    
    
    1,100Retained earnings
    
    
    97,844
    
    
    
    76,212Receivable from Parent
    
    
    (109,723
    )
    
    
    (104,968
    )Total Stockholders Deficit
    
    
    (3,729
    )
    
    
    (20,606
    )$
    790,906
    
    
    $
    790,981
  -2-




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SUSQUEHANNA MEDIA CO. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
   For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004RevenuesRadio
    
    $
    62,063
    
    
    $
    61,243
    
    
    $
    172,728
    
    
    $
    172,155Cable
    
    
    48,919
    
    
    
    46,250
    
    
    
    145,458
    
    
    
    131,951Other
    
    
    189
    
    
    
    940
    
    
    
    2,077
    
    
    
    2,507Total revenues
    
    
    111,171
    
    
    
    108,433
    
    
    
    320,263
    
    
    
    306,613Operating ExpensesOperating and programming
    
    
    45,895
    
    
    
    43,746
    
    
    
    132,829
    
    
    
    121,199Selling
    
    
    11,798
    
    
    
    11,461
    
    
    
    34,351
    
    
    
    32,416General and administrative
    
    
    20,832
    
    
    
    20,022
    
    
    
    63,339
    
    
    
    61,285Impairment loss
    
    
    
    
    
    
    
    
    
    
    2,131
    
    
    
    Depreciation and amortization
    
    
    11,031
    
    
    
    12,074
    
    
    
    33,703
    
    
    
    32,260Total operating expenses
    
    
    89,556
    
    
    
    87,303
    
    
    
    266,353
    
    
    
    247,160Operating Income
    
    
    21,615
    
    
    
    21,130
    
    
    
    53,910
    
    
    
    59,453Other Income (Expense)Interest expense
    
    
    (8,521
    )
    
    
    (7,368
    )
    
    
    (24,513
    )
    
    
    (24,201
    )Loss on extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,065
    )Interest income on receivable from
Parent
    
    
    1,602
    
    
    
    1,674
    
    
    
    4,755
    
    
    
    4,986Gain on Sale of WABZ-FM
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    Other
    
    
    75
    
    
    
    96
    
    
    
    (185
    )
    
    
    392Income Before Income Taxes
    
    
    14,771
    
    
    
    15,532
    
    
    
    34,267
    
    
    
    31,565Provision for Income Taxes
    
    
    5,820
    
    
    
    6,440
    
    
    
    13,507
    
    
    
    12,500Income Before Minority Interests
    
    
    8,951
    
    
    
    9,092
    
    
    
    20,760
    
    
    
    19,065Minority Interests
    
    
    (955
    )
    
    
    (814
    )
    
    
    1,242
    
    
    
    (7,743
    )Net Income and Comprehensive Income
    
    
    7,996
    
    
    
    8,278
    
    
    
    22,002
    
    
    
    11,322Preferred Dividends Declared
    
    
    (123
    )
    
    
    (123
    )
    
    
    (370
    )
    
    
    (370
    )Net Income Available for Common Shares
    
    $
    7,873
    
    
    $
    8,155
    
    
    $
    21,632
    
    
    $
    10,952
  -3-




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SUSQUEHANNA MEDIA CO. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
   For The Nine Months EndedSeptember 30,2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    22,002
    
    
    $
    11,322Adjustments to reconcile net income to net cash:Depreciation and amortization
    
    
    33,703
    
    
    
    32,260Impairment loss
    
    
    2,131
    
    
    
    Deferred income taxes
    
    
    5,506
    
    
    
    8,888Minority interests
    
    
    (1,242
    )
    
    
    7,743Write-down of SusQtech accounts receivable
    
    
    629
    
    
    
    Loss on extinguishment of debt
    
    
    
    
    
    
    2,690Equity in (earnings) or loss of investees
    
    
    299
    
    
    
    (107
    )Gain on sale of WABZ-FM
    
    
    (300
    )
    
    
    Deferred financing amortization
    
    
    571
    
    
    
    1,280Changes in assets and liabilities:Increase in accounts receivable, net
    
    
    (1,718
    )
    
    
    (1,691
    )Decrease (increase) in other current assets
    
    
    1,136
    
    
    
    (275
    )Increase in receivable from Parent
    
    
    (4,755
    )
    
    
    (5,004
    )Decrease in accounts payable
    
    
    (4,608
    )
    
    
    (590
    )Increase in accrued interest
    
    
    2,848
    
    
    
    2,356Decrease in accrued income taxes
    
    
    (5,316
    )
    
    
    (787
    )Increase in other current liabilities
    
    
    4,918
    
    
    
    14,313Increase in other liabilities
    
    
    932
    
    
    
    1,029Net cash provided by operating activities
    
    
    56,736
    
    
    
    73,427CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment, net
    
    
    (26,748
    )
    
    
    (28,745
    )Acquisitions
    
    
    
    
    
    
    (125,404
    )Proceeds from sale of WABZ-FM
    
    
    300
    
    
    
    Increase in investments, other assets and intangible assets
    
    
    (9,956
    )
    
    
    (4,484
    )Net cash used by investing activities
    
    
    (36,404
    )
    
    
    (158,633
    )CASH FLOWS FROM FINANCING ACTIVITIESIncrease (decrease) in revolving credit borrowings
    
    
    (15,900
    )
    
    
    12,400New term loan borrowings
    
    
    
    
    
    
    400,000Repayment of debt
    
    
    (2,706
    )
    
    
    (174,250
    )Redemption of Senior Subordinated Notes
    
    
    
    
    
    
    (150,000
    )Increase in cash overdrafts
    
    
    1,897
    
    
    
    1,635Payment of preferred dividends
    
    
    (370
    )
    
    
    (370
    )Non-voting subsidiary common stock transactions
    
    
    (3,253
    )
    
    
    (4,734
    )Net cash provided (used) by financing activities
    
    
    (20,332
    )
    
    
    84,681NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    
    
    
    
    (525
    )CASH AND CASH EQUIVALENTS, beginning
    
    
    
    
    
    
    525CASH AND CASH EQUIVALENTS, ending
    
    $
    
    
    
    $
    
  -4-




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SUSQUEHANNA MEDIA CO. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Basis of Presentation
     2. Recent Developments
 Sale of Businesses
     -5-




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Litigation
  Radio Employee Stock Plan and Cable Performance Share Plan
 st
  Recent Accounting Pronouncements
    -6-




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3. Segment Information
  Segment information follows (in thousands):
    
    Radio
    
    
    Cable
    
    
    Other
    
    
    TotalFor the Three Months Ended
September 30, 2005Operating income (loss)
    
    $
    15,962
    
    
    $
    6,426
    
    
    $
    (773
    )
    
    $
    21,615Interest expense, net
    
    
    1,081
    
    
    
    4,264
    
    
    
    3,176
    
    
    
    8,521Depreciation and amortization
    
    
    1,500
    
    
    
    9,426
    
    
    
    105
    
    
    
    11,031Income (loss) before income taxes
    
    
    14,938
    
    
    
    2,162
    
    
    
    (2,329
    )
    
    
    14,771Identifiable assets
    
    
    455,700
    
    
    
    331,047
    
    
    
    4,159
    
    
    
    790,906Capital expenditures
    
    
    4,759
    
    
    
    7,477
    
    
    
    74
    
    
    
    12,310For the Three Months Ended
September 30, 2004Operating income (loss)
    
    $
    17,290
    
    
    $
    4,469
    
    
    $
    (629
    )
    
    $
    21,130Interest expense, net
    
    
    970
    
    
    
    2,970
    
    
    
    3,428
    
    
    
    7,368Depreciation and amortization
    
    
    1,603
    
    
    
    10,370
    
    
    
    101
    
    
    
    12,074Income (loss) before income taxes
    
    
    16,430
    
    
    
    1,498
    
    
    
    (2,396
    )
    
    
    15,532Identifiable assets (1)
    
    
    433,762
    
    
    
    343,328
    
    
    
    128,916
    
    
    
    906,006Capital expenditures
    
    
    1,493
    
    
    
    10,459
    
    
    
    54
    
    
    
    12,006
 Radio
    
    
    Cable
    
    
    Other
    
    
    TotalFor the Nine Months Ended
September 30, 2005Operating income (loss)
    
    $
    42,144
    
    
    $
    17,919
    
    
    $
    (6,153
    )
    
    $
    53,910Interest expense, net
    
    
    3,272
    
    
    
    12,028
    
    
    
    9,213
    
    
    
    24,513Depreciation and amortization
    
    
    4,707
    
    
    
    28,558
    
    
    
    438
    
    
    
    33,703Income (loss) before income taxes
    
    
    39,286
    
    
    
    5,891
    
    
    
    (10,910
    )
    
    
    34,267Identifiable assets
    
    
    455,700
    
    
    
    331,047
    
    
    
    4,159
    
    
    
    790,906Capital expenditures
    
    
    6,004
    
    
    
    20,641
    
    
    
    103
    
    
    
    26,748For the Nine Months Ended
September 30, 2004Operating income (loss)
    
    $
    45,072
    
    
    $
    17,247
    
    
    $
    (2,866
    )
    
    $
    59,453Interest expense, net
    
    
    4,071
    
    
    
    10,080
    
    
    
    10,050
    
    
    
    24,201Depreciation and amortization
    
    
    5,013
    
    
    
    26,955
    
    
    
    292
    
    
    
    32,260Income (loss) before income taxes
    
    
    39,205
    
    
    
    1,483
    
    
    
    (9,123
    )
    
    
    31,565Identifiable assets (1)
    
    
    433,762
    
    
    
    343,328
    
    
    
    128,916
    
    
    
    906,006Capital expenditures
    
    
    3,258
    
    
    
    25,232
    
    
    
    255
    
    
    
    28,745
 
 (1)
    
    Receivable from Parent of $109.6 million was reported as an asset as of September 30,
2004. -7-




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Cautionary Note Regarding Forward-Looking Statements
  
    
    Completion of the sale of the Radio and Cable businesses, regulatory approvals and other closing
conditions;
    
    business conditions, both nationally and in our markets;
    
    interest rate movements;
    
    terrorists acts or adverse reactions to United States anti-terrorism activities;
    
    expectations and estimates concerning future financial performance;
    
    the amount and timing of compensation charges, changes in minority interests and any payments required under the
Radio Employee Stock Plan and the Cable Performance Share Plan;
    
    acquisition opportunities and our ability to successfully integrate acquired businesses, properties or other assets
and realize anticipated benefits of such acquisitions;
    
    financing plans and access to adequate capital on favorable terms;
    
    our ability to service our outstanding indebtedness and the impact such indebtedness may have on the way we operate
our businesses;
    
    the impact of competition from other radio stations, media forms, communication service providers and telephony
service providers;
    
    changes in accounting principles generally accepted in the United States and SEC rules and regulations;
    
    the impact of existing and future regulations affecting our businesses, including radio licensing and ownership
rules and cable television regulations;
    
    the possible non-renewal of cable franchises;
    
    increases in programming costs;
    
    the accuracy of anticipated trends in our businesses, including those discussed in Managements Discussion and
Analysis of Financial Condition and Results of Operations herein;
    
    advances in technology and our ability to adapt to and capitalize on such advances;
    
    decreases in our customers advertising and entertainment expenditures; and
    
    other factors over which we may have little or no control.
  -8-




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Overview
        
    
    Cable revenues increased $13.5 million or 10% over 2004 with approximately half
of the increase attributable to a full nine months impact of the March 2004 Carmel
acquisition.
    
    Cables Carmel operation ceased using third-party transition services,
including telephone-based customer service, network monitoring, billing (voice, video
and data), telephony switching and Internet backbone. Carmels operating loss narrowed
in the third quarter by $1.2 million or 48% compared to the same period in 2004.
    
    The Rankin County cable plant rebuild was substantially finished as of June 30,
2005. Final clean-up and customer connections were completed during August 2005.
    
    Hurricane Katrina caused plant damage totaling approximately $1.1 million to
the Rankin County system. All repairs were completed and insurance claims are being
prepared for submission.
    
    On January 26, 2005, the United States District Court for the Northern District
of Georgia granted a summary judgment against Media. The summary judgment granted BCI,
the plaintiff, the sum of $10.0 million with interest at the rate of 9% per annum from
January 22, 2001 and allowed recovery of BCIs attorneys fees and costs.
    
    Media disposed of the assets of Susquehanna Technologies (SusQtech) during
third quarter without further loss over the impairment loss of $2.1 million recognized
in the second quarter.
    
    Cable launched digital video recorder (DVR) customer premise equipment during
second quarter to customers in York and Williamsport, Pennsylvania and Brunswick,
Maine. The service was launched in the remaining systems during third quarter 2005.
    
    Based on the results of the independent valuation performed for Susquehanna
Pfaltzgraff Co.s ESOP as of December 31, 2004 (Valuation), a $1.2 million
compensation expense was recognized related to the Cable Performance Share Plan on
April 1, 2005. Based on the results of the Valuation, a $4.0 million decrease in
minority interests related to the Radio Employee Stock Plan was recognized as of April
1, 2005.
 -9-




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##### Table of Contents



Results of Operations
  Three months ended September 30, 2005(in millions)
    
    Radio
    
    
    Cable
    
    
    Other
    
    
    TotalRevenues
    
    $
    62.0
    
    
    
    100.0
    %
    
    $
    49.0
    
    
    
    100.0
    %
    
    $
    0.2
    
    
    
    100.0
    %
    
    $
    111.2
    
    
    
    100.0
    %Operating expenses:Operating and programming
    
    
    22.1
    
    
    
    35.6
    %
    
    
    23.5
    
    
    
    48.0
    %
    
    
    0.3
    
    
    
    *
    
    
    
    45.9
    
    
    
    41.3
    %Selling
    
    
    9.5
    
    
    
    15.3
    %
    
    
    2.2
    
    
    
    4.5
    %
    
    
    0.1
    
    
    
    *
    
    
    
    11.8
    
    
    
    10.6
    %General and administrative
    
    
    13.0
    
    
    
    21.0
    %
    
    
    7.4
    
    
    
    15.1
    %
    
    
    0.5
    
    
    
    *
    
    
    
    20.9
    
    
    
    18.8
    %Depreciation and
amortization
    
    
    1.5
    
    
    
    2.4
    %
    
    
    9.5
    
    
    
    19.4
    %
    
    
    
    
    
    
    *
    
    
    
    11.0
    
    
    
    9.9
    %Total operating expenses
    
    
    46.1
    
    
    
    74.4
    %
    
    
    42.6
    
    
    
    86.9
    %
    
    
    0.9
    
    
    
    *
    
    
    
    89.6
    
    
    
    80.6
    %Operating income (loss)
    
    $
    15.9
    
    
    
    25.6
    %
    
    $
    6.4
    
    
    
    13.1
    %
    
    $
    (0.7
    )
    
    
    *
    
    
    
    21.6
    
    
    
    19.4
    %Other income (expense)Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8.5
    )
    
    
    (7.6
    )%Interest income from loan to
parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.6
    
    
    
    1.4
    %Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    0.1
    %Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5.8
    )
    
    
    (5.2
    )%Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.0
    )
    
    
    (0.9
    )%Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    8.0
    
    
    
    7.2
    %
 
  Three months ended September 30, 2004(in millions)
    
    Radio
    
    
    Cable
    
    
    Other
    
    
    TotalRevenues
    
    $
    61.3
    
    
    
    100.0
    %
    
    $
    46.2
    
    
    
    100.0
    %
    
    $
    0.9
    
    
    
    100.0
    %
    
    $
    108.4
    
    
    
    100.0
    %Operating expenses:Operating and programming
    
    
    20.3
    
    
    
    33.1
    %
    
    
    22.7
    
    
    
    49.1
    %
    
    
    0.8
    
    
    
    89.0
    %
    
    
    43.8
    
    
    
    40.4
    %Selling
    
    
    9.5
    
    
    
    15.5
    %
    
    
    1.7
    
    
    
    3.7
    %
    
    
    0.2
    
    
    
    22.2
    %
    
    
    11.4
    
    
    
    10.5
    %General and administrative
    
    
    12.6
    
    
    
    20.6
    %
    
    
    7.1
    
    
    
    15.4
    %
    
    
    0.3
    
    
    
    33.3
    %
    
    
    20.0
    
    
    
    18.5
    %Depreciation and
amortization
    
    
    1.6
    
    
    
    2.6
    %
    
    
    10.4
    
    
    
    22.5
    %
    
    
    0.1
    
    
    
    11.1
    %
    
    
    12.1
    
    
    
    11.1
    %Total operating expenses
    
    
    44.0
    
    
    
    71.8
    %
    
    
    41.9
    
    
    
    90.7
    %
    
    
    1.4
    
    
    
    155.6
    %
    
    
    87.3
    
    
    
    80.5
    %Operating income
    
    $
    17.3
    
    
    
    28.2
    %
    
    $
    4.3
    
    
    
    9.3
    %
    
    $
    (0.5
    )
    
    
    (55.6
    )%
    
    
    21.1
    
    
    
    19.5
    %Other income (expense)Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7.4
    )
    
    
    (6.8
    )%Interest income from
loan to
parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.7
    
    
    
    1.5
    %Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    0.1
    %Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6.4
    )
    
    
    (5.9
    )%Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.8
    )
    
    
    (0.7
    )%Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    8.3
    
    
    
    7.7
    %
 -10-




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##### Table of Contents



Nine months ended September 30, 2005(in millions)
    
    Radio
    
    
    Cable
    
    
    Other
    
    
    TotalRevenues
    
    $
    172.7
    
    
    
    100.0
    %
    
    $
    145.5
    
    
    
    100.0
    %
    
    $
    2.1
    
    
    
    100.0
    %
    
    $
    320.3
    
    
    
    100.0
    %Operating expenses:Operating and programming
    
    
    59.6
    
    
    
    34.5
    %
    
    
    71.0
    
    
    
    48.8
    %
    
    
    2.2
    
    
    
    *
    
    
    
    132.8
    
    
    
    41.5
    %Selling
    
    
    27.6
    
    
    
    16.0
    %
    
    
    6.2
    
    
    
    4.3
    %
    
    
    0.6
    
    
    
    *
    
    
    
    34.4
    
    
    
    10.7
    %General and administrative
    
    
    38.7
    
    
    
    22.4
    %
    
    
    21.8
    
    
    
    15.0
    %
    
    
    2.9
    
    
    
    *
    
    
    
    63.4
    
    
    
    19.8
    %Impairment loss
    
    
    
    
    
    
    0.0
    %
    
    
    
    
    
    
    0.0
    %
    
    
    2.1
    
    
    
    *
    
    
    
    2.1
    
    
    
    0.7
    %Depreciation and
amortization
    
    
    4.7
    
    
    
    2.7
    %
    
    
    28.6
    
    
    
    19.6
    %
    
    
    0.4
    
    
    
    *
    
    
    
    33.7
    
    
    
    10.5
    %Total operating expenses
    
    
    130.6
    
    
    
    75.6
    %
    
    
    127.6
    
    
    
    87.7
    %
    
    
    8.2
    
    
    
    *
    
    
    
    266.4
    
    
    
    83.2
    %Operating income (loss)
    
    $
    42.1
    
    
    
    24.4
    %
    
    $
    17.9
    
    
    
    12.3
    %
    
    $
    (6.1
    )
    
    
    *
    
    
    
    53.9
    
    
    
    16.8
    %Other income (expense)Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24.5
    )
    
    
    (7.6
    )%Interest income from
loan to
Parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.8
    
    
    
    1.5
    %Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    0.0
    %Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13.5
    )
    
    
    (4.2
    )%Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.2
    
    
    
    0.4
    %Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    22.0
    
    
    
    6.9
    %
 
  Nine months ended September 30, 2004(in millions)
    
    Radio
    
    
    Cable
    
    
    Other
    
    
    TotalRevenues
    
    $
    172.2
    
    
    
    100.0
    %
    
    $
    132.0
    
    
    
    100.0
    %
    
    $
    2.4
    
    
    
    100.0
    %
    
    $
    306.6
    
    
    
    100.0
    %Operating expenses:Operating and programming
    
    
    56.4
    
    
    
    32.8
    %
    
    
    62.5
    
    
    
    47.3
    %
    
    
    2.3
    
    
    
    95.8
    %
    
    
    121.2
    
    
    
    39.5
    %Selling
    
    
    27.4
    
    
    
    15.9
    %
    
    
    4.4
    
    
    
    3.3
    %
    
    
    0.6
    
    
    
    25.0
    %
    
    
    32.4
    
    
    
    10.6
    %General and administrative
    
    
    38.3
    
    
    
    22.2
    %
    
    
    20.9
    
    
    
    15.8
    %
    
    
    2.1
    
    
    
    87.5
    %
    
    
    61.3
    
    
    
    20.0
    %Depreciation and
amortization
    
    
    5.0
    
    
    
    2.9
    %
    
    
    27.0
    
    
    
    20.6
    %
    
    
    0.3
    
    
    
    12.5
    %
    
    
    32.3
    
    
    
    10.5
    %Total operating expenses
    
    
    127.1
    
    
    
    73.8
    %
    
    
    114.8
    
    
    
    87.0
    %
    
    
    5.3
    
    
    
    220.8
    %
    
    
    247.2
    
    
    
    80.6
    %Operating income (loss)
    
    $
    45.1
    
    
    
    26.2
    %
    
    $
    17.2
    
    
    
    13.0
    %
    
    $
    (2.9
    )
    
    
    (120.8
    )%
    
    
    59.4
    
    
    
    19.4
    %Other income (expense)Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24.2
    )
    
    
    (7.9
    )%Interest income from
loan to
Parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.0
    
    
    
    1.6
    %Loss on extinguishment of
debt and other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8.6
    )
    
    
    (2.8
    )%Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12.5
    )
    
    
    (4.1
    )%Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7.8
    )
    
    
    (2.5
    )%Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    11.3
    
    
    
    3.7
    %
 -11-




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##### Table of Contents



Three Months Ended September 30, 2005 Compared to the Three Months Ended September 30, 2004
 Consolidated
 Revenues
 Operating and programming expenses.
 Selling expenses.
 General and administrative expenses.
 Depreciation and amortization.
 Operating income.
 Interest expense
 Net income.
 Radio Segment
 Revenues
 Operating and programming expenses.
 Operating income.
 Cable Segment
 Revenues
 Operating and programming expenses.
 Selling expenses.
 General and administrative expenses.
 -12-




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##### Table of Contents



Depreciation and amortization.
 Operating income.
 Nine Months Ended September 30, 2005 Compared to the Nine Months Ended September 30, 2004
 Consolidated
 Revenues
 Operating and programming expenses.
 Selling expenses.
 General and administrative expenses.
 Impairment loss.
 Depreciation and amortization.
 Operating income.
 Interest expense
 Net income.
 Radio Segment
 Revenues
 Operating and programming expenses.
 Operating income.
 -13-




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##### Table of Contents



Cable Segment
 Revenues
 Operating and programming expenses.
 Selling expenses.
 Depreciation and amortization.
 Operating income.
 Liquidity and Capital Resources
     -14-




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##### Table of Contents



TotalContractual Cash
    
    AmountsObligations
    
    Committed
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    ThereafterLong-term debt
    
    $
    560,543
    
    
    $
    634
    
    
    $
    16,218
    
    
    $
    24,141
    
    
    $
    30,625
    
    
    $
    38,125
    
    
    $
    450,800Broadcast rights
    
    
    38,892
    
    
    
    2,792
    
    
    
    11,200
    
    
    
    8,000
    
    
    
    8,250
    
    
    
    8,650
    
    
    
    Operating leases
    
    
    42,914
    
    
    
    4,963
    
    
    
    4,977
    
    
    
    4,848
    
    
    
    4,741
    
    
    
    4,348
    
    
    
    19,037Total
    
    $
    642,349
    
    
    $
    8,389
    
    
    $
    32,395
    
    
    $
    36,989
    
    
    $
    43,616
    
    
    $
    51,123
    
    
    $
    469,837
  Covenant Test
    
    Actual ValueFixed charge coverage ratio must be at least 1.10
    
    
    1.54Maximum consolidated leverage ratio may not exceed 6.25
    
    
    4.06Interest coverage ratio must be at least 2.25
    
    
    4.69
   
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   2005
    
    $
    6252006
    
    
    13,7502007
    
    
    23,1252008
    
    
    30,6252009
    
    
    38,1252010
    
    
    45,6252011
    
    
    196,4252012
    
    
    58,750
  -15-




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
  
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 6. EXHIBITS
  31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by David E. Kennedy.31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by John L. Finlayson.32.1
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by David E. Kennedy.32.2
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by John L. Finlayson.
 -16-




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##### Table of Contents



SIGNATURE
  November 11, 2005
    SUSQUEHANNA MEDIA CO.By:
    /s/ John L. FinlaysonJohn L. FinlaysonVice President and Principal

Financial and 
    Accounting Officer -17-