##### 









UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K




|   |  |                                                                                             
|-- |  | --------------------------------------------------------------------------------------------
|þ  |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|  
|   |  | For the fiscal year ended December 31, 2004                                                 
|  
|or
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934



Commission file number 000-27823





Spanish Broadcasting System, Inc.


(Exact name of registrant as specified in its charter)


|                                                                                                                       |  |                                         
|---------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                                                                               |  | 13-3827791                              
|(State or other jurisdiction
    of incorporation or organization)                                                     |  | (I.R.S. Employer
    Identification No.)
|2601 South Bayshore Drive, PH II
    Coconut Grove, Florida 33133(Address of principal executive offices and zip code)

(305) 441-6901


None




Class A common stock, par value $.0001 per share


(Title of Class)


þ o


o




þ o






Documents Incorporated by Reference: None










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TABLE OF CONTENTS


|         |          |     |                                                                                                                      |  |    
|-------- | -------- | --- | -------------------------------------------------------------------------------------------------------------------- |  | ---
|PART I   |          | 1  
|         | Item 1.  |     | Business                                                                                                             |  | 1  
|         | Item 2.  |     | Properties                                                                                                           |  | 26 
|         | Item 3.  |     | Legal Proceedings                                                                                                    |  | 27 
|         | Item 4.  |     | Submission of Matters to a Vote of Security
    Holders                                                              |  | 29 
|PART II  |          | 29 
|         | Item 5.  |     | Market For Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities |  | 29 
|         | Item 6.  |     | Selected Financial Data                                                                                              |  | 31 
|         | Item 7.  |     | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                            |  | 34 
|         | Item 7A. |     | Quantitative and Qualitative Disclosures
    About Market Risk                                                       |  | 47 
|         | Item 8.  |     | Financial Statements and Supplementary
    Data                                                                      |  | 47 
|         | Item 9.  |     | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure                             |  | 47 
|         | Item 9A. |     | Controls and Procedures                                                                                              |  | 47 
|         | Item 9B. |     | Other Information                                                                                                    |  | 49 
|PART III |          | 49 
|         | Item 10. |     | Directors and Executive Officers of the
    Registrant                                                               |  | 49 
|         | Item 11. |     | Executive Compensation                                                                                               |  | 51 
|         | Item 12. |     | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder Matters                   |  | 58 
|         | Item 13. |     | Certain Relationships and Related
    Transactions                                                                   |  | 60 
|         | Item 14. |     | Principal Accountant Fees and Services                                                                               |  | 62 
|PART IV  |          | F-1
|         | Item 15. |     | Exhibits and Financial Statement
    Schedules                                                                       |  | F-1

i



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Special Note Regarding Forward-Looking Statements







PART I







|        |         
|------- | --------
|Item 1. | Business







Business Strategy






1



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##### 



Market Opportunity






| |   |                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Hispanic Population Growth. The U.S. Hispanic
    population is the largest minority group and the fastest growing
    demographic group of the U.S. population. The Hispanic
    population is expected to grow by 34.1% between 2000 and 2010,
    compared to an increase of 9.5% for the total
    U.S. population.                                                                                     
|
| |  | Hispanic Buying Power. The U.S. Hispanic
    population accounted for estimated buying power of
    $686.3 billion in 2004 and Hispanic buying power is growing
    at nearly twice the annual rate of non-Hispanic buying power.
    Hispanic buying power is expected to increase by 45% to
    $992.3 billion by 2009, positioning this demographic as an
    extremely attractive group for advertisers.
|
| |  | Growth in Spanish Language Advertising Spending.
    In 2004, a total of $3.1 billion was spent on
    Spanish-language media advertising, compared to
    $2.1 billion in 2000. This represents a compound annual
    growth rate of 10.1% over the past four years.                                                                                                                                       

Synovate  2004 U.S. Hispanic
Market Report, The Multicultural Economy 2004, The Selig Center
for Economic Growth, University of Georgia, July 2004 HispanTelligence, Advertising Expenditures: 2000-2007.


Our Top Hispanic Radio Markets in the United States






|                      |   |                 |        |               |  |               |       |               |  |           |     |         |  |   |       |  |  |   |       |  |  |  |    | 
|--------------------- | - | --------------- | ------ | ------------- |  | ------------- | ----- | ------------- |  | --------- | --- | ------- |  | - | ----- |  |  | - | ----- |  |  |  | -- | 
|Our Markets          
|                     
|                      |   | Estimated       |        | Estimated     |  | 2004 Total    |       |              
|                      |   | Estimated       |        | % of Total    |  | % of Total    |       | Estimated     |  | Number of
|                      |   | Hispanic        |        | Hispanic      |  | U.S.          |       | Market Radio  |  | Stations 
|Hispanic              |   |                 |        | Population    |  | Population in |       | Hispanic      |  | Revenue   |     | We     
|Market Rank           |   | Hispanic Market |        | (000)(a)      |  | Market(a)     |       | Population(a) |  | ($mm)(b)  |     | Operate
|                      |   |                 |        |               |  |               |       |               |  |           |     |        
|                      | 1 |                 |        | Los Angeles   |  |               | 7,811 |               |  |           | 45% |         |  |   | 18%   |  |  | $ | 1,054 |  |  |  | 2  | 
|                      | 2 |                 |        | New York      |  |               | 4,316 |               |  |           | 21% |         |  |   | 10%   |  |  |   | 816   |  |  |  | 2  | 
|                      | 3 |                 |        | Puerto Rico   |  |               | 3,816 |               |  |           | 98% |         |  |   | 9%    |  |  |   | 102   |  |  |  | 11 | 
|                      | 4 |                 |        | Chicago       |  |               | 1,838 |               |  |           | 19% |         |  |   | 4%    |  |  |   | 612   |  |  |  | 1  | 
|                      | 5 |                 |        | Miami         |  |               | 1,837 |               |  |           | 43% |         |  |   | 4%    |  |  |   | 287   |  |  |  | 3  | 
|                      | 8 |                 |        | San Francisco |  |               | 1,492 |               |  |           | 21% |         |  |   | 3%    |  |  |   | 482   |  |  |  | 1  | 
|                      |   |                 |        |               |  |               |       |               |  |           |     |         |  |   |       |  |  |   |       |  |  |  |    | 
|Total for our markets |   |                 | 21,110 |               |  |               | 33%   |               |  |           | 49% |         |  | $ | 3,353 |  |  |   | 20    | 






|    |  |                                                                                                                                                             
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Sources: Synovate, 2004 U.S. Hispanic Market Report;
    U.S. Census Bureau Population Estimates for Puerto Rico,
    2004; U.S. Census Bureau, Census 2000.
|   
|(b) |  | Source: BIA Research Inc.s Investing in Radio, 2004
    Market Report.                                                                                     

Operating Strategy




Format high quality programming.


2



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Attract and retain strong local management teams.


Utilize focused sales efforts.


Control station operating costs.


Effective use of promotions and special events.


Maintain strong community involvement.


Programming




3



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##### 







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Spanish Tropical. The Spanish Tropical format
    primarily consists of salsa, merengue and cumbia music. Salsa is
    dance music combining Latin Caribbean rhythms with jazz
    originating from Puerto Rico, Cuba and the Dominican Republic,
    which is popular with the Hispanics whom we target in
    New York, Miami and Puerto Rico. Merengue music is up-tempo
    dance music originating in the Dominican Republic. Cumbia is a
    festive, folkloric music which originated in Colombia.                                                                                                                                                                                                                                                                                 
|
| |  | Regional Mexican. The Regional Mexican format
    consists of various types of music played in different regions
    of Mexico such as ranchera, norteña, banda and cumbia.
    Ranchera music, originating from Jalisco, Mexico, is a
    traditional folkloric sound commonly referred to as mariachi
    music. Mariachi music features acoustical instruments and is
    considered the music indigenous to Mexicans who live in country
    towns. Norteña means northern, and is representative of
    Northern Mexico. Featuring an accordion, norteña has a
    polka sound with a distinct Mexican flavor. Banda is a regional
    format from the state of Sinalóa, Mexico and is popular in
    California. Banda resembles up-tempo marching band music with
    synthesizers.
|
| |  | Spanish Adult Contemporary. The Spanish Adult
    Contemporary format includes soft romantic ballads and Spanish
    pop music.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Spanish Oldies. The Spanish Oldies format includes
    a variety of Latin and English classics mainly from the
    1960s, 1970s and 1980s.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | Spanish Hot Adult Contemporary. The Spanish Hot
    Adult Contemporary format consists of rock ballads as well as
    alternative dance and pop music.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Mexican Adult Contemporary. The Mexican Adult
    Contemporary format includes pop music and ballads with an
    emphasis on Mexican artists.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | American Adult Contemporary 80s & 90s
    Hits. The American Adult Contemporary format consists of
    the top American chart hits from the 1980s and 1990s.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | American Top 40. The American Top 40 format
    consists of the most popular current chart hits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

4



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|              |  |            |      |        |  |                                              |  |      
|------------- |  | ---------- | ---- | ------ |  | -------------------------------------------- |  | -----
|              |  |            |      |        |  | Target Buying                               
|              |  |            |      |        |  | Demographic                                 
|Market        |  | FM Station |      | Format |  | Group by Age                                
|              |  |            |      |        |  |                                             
|Los Angeles   |  |            | KLAX |        |  | Regional Mexican                             |  | 18-49
|              |  |            | KXOL |        |  | Mexican Adult Contemporary                   |  | 18-49
|New York      |  |            | WSKQ |        |  | Spanish Tropical                             |  | 18-49
|              |  |            | WPAT |        |  | Spanish Adult Contemporary                   |  | 25-54
|Puerto Rico   |  |            | WMEG |        |  | American Top 40                              |  | 18-34
|              |  |            | WEGM |        |  | American Top 40                              |  | 18-34
|              |  |            | WCMA |        |  | American Adult Contemporary 80s & 90s Hits |  | 18-49
|              |  |            | WIOA |        |  | Spanish Adult Contemporary                   |  | 18-49
|              |  |            | WIOB |        |  | Spanish Adult Contemporary                   |  | 18-49
|              |  |            | WIOC |        |  | Spanish Adult Contemporary                   |  | 18-49
|              |  |            | WZNT |        |  | Spanish Tropical                             |  | 18-49
|              |  |            | WZMT |        |  | Spanish Tropical                             |  | 18-49
|              |  |            | WZET |        |  | Spanish Tropical                             |  | 18-49
|              |  |            | WODA |        |  | Spanish Hot Adult Contemporary               |  | 18-34
|              |  |            | WNOD |        |  | Spanish Hot Adult Contemporary               |  | 18-34
|Chicago       |  |            | WLEY |        |  | Regional Mexican                             |  | 18-49
|Miami         |  |            | WXDJ |        |  | Spanish Tropical                             |  | 18-49
|              |  |            | WCMQ |        |  | Spanish Oldies                               |  | 25-54
|              |  |            | WRMA |        |  | Spanish Adult Contemporary                   |  | 18-49
|San Francisco |  |            | KRZZ |        |  | Regional Mexican                             |  | 18-49

Radio Station Portfolio


BIA Research, Inc.s Investing in Radio, 2004 Market
Report, Synovate  2004 U.S. Hispanic Market
Report, U.S. Census Bureau Population Estimates
for Puerto Rico  2002 U.S. Census
Bureau, Census 2000.


Los Angeles




New York




5



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Puerto Rico




Chicago




Miami




San Francisco




Latin Music On-Line (LaMusica.com)




Management and Personnel




6



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Seasonality




Patents, Trademarks, Licenses and Franchises




Advertising








7



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Competition








tm


8



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Antitrust




Federal Regulation of Radio Broadcasting






| |   |                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | assigns frequency bands for radio broadcasting;                                                                                                                                                               
|
| |  | determines the particular frequencies, locations and operating
    power of radio broadcast stations;                                                                                                         
|
| |  | issues, renews, revokes and modifies radio broadcast station
    licenses;                                                                                                                                    
|
| |  | establishes technical requirements for certain transmitting
    equipment used by radio broadcast stations;                                                                                                   
|
| |  | adopts and implements regulations and policies that directly or
    indirectly affect the ownership, operation, program content and
    employment and business practices of radio broadcast
    stations; and
|
| |  | has the power to impose penalties, including monetary
    forfeitures, for violations of its rules and the Communications
    Act.                                                                            

9



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| |   |                                                                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | changes to the license authorization and renewal process;                                                                                                                  
|
| |  | proposals to impose spectrum use or other fees on FCC licensees;                                                                                                           
|
| |  | proposals to codify indecency regulations or increase sanctions
    for broadcasting indecent material;                                                                    
|
| |  | changes to the FCCs equal employment opportunity
    regulations and other matters relating to the involvement of
    minorities and women in the broadcasting industry;  
|
| |  | proposals to change rules relating to political broadcasting
    including proposals to grant free air time to candidates, and
    other changes regarding program content;
|
| |  | proposals to restrict or prohibit the advertising of beer, wine
    and other alcoholic beverages;                                                                         
|
| |  | technical and frequency allocation matters;                                                                                                                                
|
| |  | the implementation of digital audio broadcasting on a
    terrestrial basis;                                                                                               
|
| |  | changes in broadcast, multiple ownership, foreign ownership,
    cross-ownership and ownership attribution policies;                                                       
|
| |  | proposals to allow telephone companies to deliver audio and
    video programming to homes in their service areas; and                                                     
|
| |  | proposals to alter provisions of the tax laws affecting
    broadcast operations and acquisitions.                                                                         



FCC Licenses




10



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|           |  |                   |  |             |  |                 |  |          
|---------- |  | ----------------- |  | ----------- |  | --------------- |  | ---------
|           |  |                   |  | Date of     |  | Date of License |  | Operation
|FM Station |  | Market            |  | Acquisition |  | Expiration      |  | Frequency
|           |  |                   |  |             |  |                 |  |          
|KLAX       |  | Los Angeles, CA   |  | 2/24/88     |  | 12/01/05        |  | 97.9 MHz 
|KXOL       |  | Los Angeles, CA   |  | 10/30/03    |  | 12/01/05        |  | 96.3 MHz 
|WSKQ       |  | New York, NY      |  | 1/26/89     |  | 6/01/06         |  | 97.9 MHz 
|WPAT       |  | New York, NY      |  | 3/25/96     |  | 6/01/06         |  | 93.1 MHz 
|WMEG       |  | Puerto Rico       |  | 5/13/99     |  | 2/01/12         |  | 106.9 MHz
|WEGM       |  | Puerto Rico       |  | 1/14/00     |  | 2/01/12         |  | 95.1 MHz 
|WCMA       |  | Puerto Rico       |  | 12/01/98    |  | 2/01/12         |  | 96.5 MHz 
|WZET       |  | Puerto Rico       |  | 5/13/99     |  | 2/01/12         |  | 92.1 MHz 
|WIOA       |  | Puerto Rico       |  | 1/14/00     |  | 2/01/12         |  | 99.9 MHz 
|WIOB       |  | Puerto Rico       |  | 1/14/00     |  | 2/01/12         |  | 97.5 MHz 
|WIOC       |  | Puerto Rico       |  | 1/14/00     |  | 2/01/12         |  | 105.1 MHz
|WZNT       |  | Puerto Rico       |  | 1/14/00     |  | 2/01/12         |  | 93.7 MHz 
|WZMT       |  | Puerto Rico       |  | 1/14/00     |  | 2/01/12         |  | 93.3 MHz 
|WODA       |  | Puerto Rico       |  | 1/14/00     |  | 2/01/12         |  | 94.7 MHz 
|WNOD       |  | Puerto Rico       |  | 1/14/00     |  | 2/01/12         |  | 94.1 MHz 
|WLEY       |  | Chicago, IL       |  | 3/27/97     |  | 12/01/12        |  | 107.9 MHz
|WXDJ       |  | Miami, FL         |  | 3/28/97     |  | 2/01/12         |  | 95.7 MHz 
|WCMQ       |  | Miami, FL         |  | 12/22/86    |  | 2/01/12         |  | 92.3 MHz 
|WRMA       |  | Miami, FL         |  | 3/28/97     |  | 2/01/12         |  | 106.7 MHz
|KRZZ       |  | San Francisco, CA |  | 12/23/04    |  | 12/01/05        |  | 93.3 MHz 





| |   |                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the radio station has served the public interest, convenience
    and necessity;                                                                                      
|
| |  | there have been no serious violations by the licensee of the
    Communications Act or FCC rules and regulations; and                                                 
|
| |  | there have been no other violations by the licensee of the
    Communications Act or FCC rules and regulations which, taken
    together, indicate a pattern of abuse.





11



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Ownership Matters.




| |   |                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the financial and legal qualifications of the prospective
    assignee or transferee, including compliance with FCC
    restrictions on non-U.S. citizen or entity ownership and
    control;
|
| |  | compliance with FCC rules limiting the common ownership of
    attributable interests in broadcast and newspaper properties;                                                                 
|
| |  | the history of compliance with FCC operating rules; and                                                                                                                                      
|
| |  | the character qualifications of the transferee or assignee and
    the individuals or entities holding attributable interests in
    them.                                                   







12



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| |   |                                                                                       
| | - | --------------------------------------------------------------------------------------
| |  | radio broadcast stations above certain limits servicing the same
    local market; and
|
| |  | a radio broadcast station and a daily newspaper serving the same
    local market.    







| |   |                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In a radio market with 45 or more full-power commercial and
    non-commercial radio stations, a party may own, operate or
    control up to eight commercial radio stations, not more than
    five of which are in the same service (AM or FM).                       
|
| |  | In a radio market with between 30 and 44
    (inclusive) full-power commercial and non-commercial radio
    stations, a party may own, operate or control up to seven
    commercial radio stations, not more than four of which are in
    the same service (AM or FM).

13



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| |   |                                                                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In a radio market with between 15 and 29
    (inclusive) full-power commercial and non-commercial radio
    stations, a party may own, operate or control up to six
    commercial radio stations, not more than four of which are in
    the same service (AM or FM).                                                                                             
|
| |  | In a radio market with 14 or fewer full-power commercial and
    non-commercial radio stations, a party may own, operate or
    control up to five commercial radio stations, not more than
    three of which are in the same service (AM or FM), except that a
    party may not own, operate, or control more than 50% of the
    radio stations in such market.



Programming and Operations.






Time Brokerage Agreements.


Joint Sales Agreements.


RF Radiation.


Digital Audio Radio Satellite Service.


14



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Low Power Radio Broadcast Service.


Proposed Changes.


Environmental Matters










15



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##### 







Recent Developments


Acquisition of San Francisco Station and Issuance of
Series C Preferred Stock and Warrant








Pending Sale of Los Angeles Stations




16



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##### 







Sale of San Francisco and Chicago Stations






Amendment to Senior Credit Facility


5 8


Industry Segments




Risk Factors




Our substantial amount of debt could adversely affect our
financial health.


3 4 3 4


17



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| |   |                                                                                                                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a significant portion of our net cash flow from operations will
    be dedicated to servicing our debt obligations and will not be
    available for operations, future business opportunities or other
    purposes;                                                                                                         
|
| |  | our ability to obtain additional financing in the future for
    working capital, capital expenditures, acquisitions, general
    corporate or other purposes will be limited;                                                                                                                                                
|
| |  | our substantial debt could make us more vulnerable to downturns
    in our business or in the general economy and increases in
    interest rates, limit our ability to withstand competitive
    pressures and reduce our flexibility in responding to changing
    business and economic conditions;                        
|
| |  | our substantial debt could place us at a disadvantage compared
    to our competitors who have less debt; and                                                                                                                                                                                                                 
|
| |  | it may be more difficult for us to satisfy our obligations
    relating to our Series B preferred stock and our Exchange
    Notes, if issued (for example, we may not be able to pay cash
    dividends and interest, respectively, or repurchase our
    Series B preferred stock when and if we are required to do
    so).



We will require a significant amount of cash to service
our debt and to make cash dividend payments under our
Series B Preferred Stock. Our ability to generate cash
depends on many factors, some of which are beyond our
control.








18



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##### 



5 8 5 8


Any acceleration of our debt or event of default would
harm our business and financial condition.




Despite our current significant level of debt, we and our
subsidiaries may still be able to incur substantially more debt,
which, if increased, could further intensify the risks
associated with our substantial leverage.




The terms of our existing debt and our preferred stock
impose or will impose restrictions on us that may adversely
affect our business.


5 8




| |   |                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | incur additional debt, incur contingent obligations and issue
    additional preferred stock;                                                                                           
|
| |  | redeem or repurchase securities ranking junior to our
    Series B preferred stock;                                                                                                     
|
| |  | create liens;                                                                                                                                                                           
|
| |  | pay dividends, distributions or make other specified restricted
    payments, and restrict the ability of certain of our
    subsidiaries to pay dividends or make other payments to us;
|
| |  | sell assets;                                                                                                                                                                            
|
| |  | make certain capital expenditures, investments and acquisitions;                                                                                                                        
|
| |  | change or add lines of business;                                                                                                                                                        
|
| |  | enter into certain transactions with affiliates;                                                                                                                                        
|
| |  | enter into sale and leaseback transactions;                                                                                                                                             
|
| |  | sell capital stock of our subsidiaries; and                                                                                                                                             
|
| |  | merge or consolidate with any other person or sell, assign,
    transfer, lease, convey or otherwise dispose of all or
    substantially all of our assets.                             

19



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##### 





5 8 5 8


We may not have the funds or the ability to raise the
funds necessary to repurchase our Series B preferred stock
if holders exercise their repurchase right, or to finance the
change of control offer required by our Series B preferred
stock and the indenture that would govern our Exchange Notes, if
issued.


5 8 5 8 5 8 5 8


We may not complete the proposed sale of our Los Angeles
stations.




20



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##### 





We are a holding company and depend entirely upon cash
flow from our subsidiaries to meet our obligations.




We have experienced net losses in the past and, to the
extent that we experience net losses in the future, our ability
to raise capital and the market prices of our common stock may
be adversely affected.






We compete for advertising revenue with other radio
broadcasters as well as television and other media, many
operators of which have greater resources than we do.






21



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##### 



Cancellations or reductions in advertising could adversely
affect our net revenues.




Our operating results could be adversely affected by a
national or regional recession.




A large portion of our net revenue and operating income
currently comes from our New York, Los Angeles and Miami
markets.




Loss of any of our key personnel could adversely affect
our business.




Our growth depends on successfully executing our
acquisition strategy.






| |   |                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------
| |  | the limits on our ability to acquire additional radio stations
    due to our substantial level of debt;                     
|
| |  | the need to raise additional financing, which may be limited by
    the terms of our debt instruments and market conditions; 
|
| |  | the failure to increase our station operating income or yield
    other anticipated benefits despite newly acquired stations;
|
| |  | the need for required regulatory approvals, including FCC and
    antitrust approvals;                                       
|
| |  | the challenges of managing any rapid growth; and                                                                             
|
| |  | the difficulties of programming newly acquired stations to
    attract listenership.                                         



22



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##### 



5 8


Raúl Alarcón, Jr., our Chairman of the
Board of Directors, Chief Executive Officer and President, has
majority voting control and this control may discourage or
influence certain types of transactions, including an actual or
potential change of control such as a merger or sale.




We must be able to respond to rapidly changing technology,
services and standards which characterize our industry in order
to remain competitive.






| |   |                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | cable television operators offer a service commonly referred to
    as cable radio which provides cable television
    subscribers with several high-quality channels of music, news
    and other information;  
|
| |  | the Internet offers new, diverse and evolving forms of program
    distribution;                                                                                                                                   
|
| |  | direct satellite broadcast television companies are supplying
    subscribers with several high quality music channels;                                                                                            
|
| |  | the introduction of satellite digital audio radio technology has
    resulted in new satellite radio services with multi-channel
    programming and sound quality equivalent to that of compact
    discs; and    
|
| |  | the introduction of in-band on-channel digital radio could
    provide multi-channel, multi-format digital radio services in
    the same bandwidth currently occupied by traditional AM and FM
    radio services.

Our business depends on maintaining our FCC licenses. We
cannot assure you that we will be able to maintain these
licenses.






23



---



##### 







The FCC has recently begun more vigorous enforcement of
its indecency rules against the broadcast industry, which could
have a material adverse effect on our business.






We may face regulatory review for additional acquisitions
and divestitures in our existing markets and, potentially,
acquisitions in new markets.




24



---



##### 





The market price of our shares of Class A common
stock may fluctuate significantly.






| |   |                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | fluctuations in our financial results;                                                                                                     
|
| |  | general conditions or developments in the radio industry,
    television and other media, and the national economy;                        
|
| |  | significant sales of our common stock into the marketplace;                                                                                
|
| |  | significant decreases in our radio station audience ratings;                                                                               
|
| |  | inability to implement our acquisition strategy;                                                                                           
|
| |  | a shortfall in revenue, gross margin, earnings or other
    financial results from operations or changes in analysts
    expectations; and
|
| |  | developments in our relationships with our customers and
    suppliers.                                                                    



Current or future sales by existing stockholders could
depress the market price of our Class A common
stock.








25



---



##### 





Our failure to comply with the Sarbanes-Oxley Act of 2002
could cause a loss of confidence in the reliability of our
financial statements and could have a material adverse effect on
our business and the price of our Class A common
stock.




Available Information


http://www.sec.gov. www.spanishbroadcasting.com www.spanishbroadcasting.com/investorinfo.shtml.







|        |           
|------- | ----------
|Item 2. | Properties



26



---



##### 


















|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings







27



---



##### 















28



---



##### 












|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders






PART II







|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|Item 5. | Market For Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity
    Securities



|                                     |  |      |       |  |     |   |      | 
|------------------------------------ |  | ---- | ----- |  | --- | - | ---- | 
|Fiscal Year Ended December 31, 2003  |  | High |       |  | Low |  
|                                     |  |      |       |  |     |  
|First Quarter (12/30/02 - 3/31/03)   |  | $    | 9.16  |  |     | $ | 5.13 | 
|Second Quarter (4/01/03 - 6/30/03)   |  | $    | 8.85  |  |     | $ | 6.26 | 
|Third Quarter (7/01/03 - 9/30/03)    |  | $    | 9.45  |  |     | $ | 6.76 | 
|Fourth Quarter (10/01/03 - 12/31/03) |  | $    | 10.95 |  |     | $ | 8.46 | 

|                                     |  |      |       |  |     |   |      | 
|------------------------------------ |  | ---- | ----- |  | --- | - | ---- | 
|Fiscal Year Ended December 31, 2004  |  | High |       |  | Low |  
|                                     |  |      |       |  |     |  
|First Quarter (1/01/04 - 3/31/04)    |  | $    | 12.35 |  |     | $ | 9.52 | 
|Second Quarter (4/01/04 - 6/30/04)   |  | $    | 11.21 |  |     | $ | 9.00 | 
|Third Quarter (7/01/04 - 9/30/04)    |  | $    | 10.40 |  |     | $ | 7.54 | 
|Fourth Quarter (10/01/04 - 12/31/04) |  | $    | 11.17 |  |     | $ | 9.50 | 

Holders




Dividend Policy


5 8


3 4


29



---



##### 







Recent Sales of Unregistered Securities




Equity Compensation Plan Information




30



---



##### 








|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION


(In thousands, except ratios, shares outstanding and per
share data)








|                                                                                                                                                         |  |                                       |         |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |   |         |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------- | ------- | ------ | ------------- | ----- | ------- | ----------------- |  | - | ------------ | - |  | ------------ | ------- | - | ------------ | - | ------- | - |  | - | ------- | -
|                                                                                                                                                         |  |                                       |         |        |               | Three |         |                   |  |   |              |   | 
|                                                                                                                                                         |  |                                       |         | Months |               |       |        
|                                                                                                                                                         |  | Fiscal Year Ended                     |         |        | Ended         |       |         | Fiscal Year Ended | 
|                                                                                                                                                         |  |                                       |         |        |               |       |         |                   | 
|                                                                                                                                                         |  | September 24,                         |         |        | September 30, |       |         | December 30,      |  |   | December 29, |   |  | December 31, |         |   | December 31, |  
|                                                                                                                                                         |  | 2000                                  |         |        | 2001          |       |         | 2001              |  |   | 2002         |   |  | 2003         |         |   | 2004         |  
|                                                                                                                                                         |  |                                       |         |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |  
|                                                                                                                                                         |  | (In thousands, except per share data) |        
|Statement of Operations Data:                                                                                                                            |  |                                       |         |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |   |         |   |  |   |         |  
|Net revenue(1)                                                                                                                                           |  | $                                     | 117,761 |        |               | $     | 125,467 |                   |  | $ | 31,769       |   |  | $            | 135,688 |   |              | $ | 135,266 |   |  | $ | 156,443 |  
|Station operating expenses(1)(2)                                                                                                                         |  |                                       | 53,206  |        |               |       | 76,277  |                   |  |   | 19,447       |   |  |              | 77,779  |   |              |   | 73,374  |   |  |   | 88,202  |  
|Stock based programming expense(3)                                                                                                                       |  |                                       |        |        |               |       |        |                   |  |   |             |   |  |              |        |   |              |   | 2,943   |   |  |   |        |  
|Corporate expenses                                                                                                                                       |  |                                       | 20,730  |        |               |       | 10,515  |                   |  |   | 2,387        |   |  |              | 13,546  |   |              |   | 17,853  |   |  |   | 13,346  |  
|Depreciation and amortization                                                                                                                            |  |                                       | 12,828  |        |               |       | 16,750  |                   |  |   | 4,275        |   |  |              | 2,871   |   |              |   | 2,901   |   |  |   | 3,308   |  
|Gain on the sale of stations                                                                                                                             |  |                                       |        |        |               |       |        |                   |  |   |             |   |  |              |        |   |              |   |        |   |  |   | (5,461  | )
|                                                                                                                                                         |  |                                       |         |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |  
|Operating income from continuing operations                                                                                                              |  | $                                     | 30,997  |        |               | $     | 21,925  |                   |  | $ | 5,660        |   |  | $            | 41,492  |   |              | $ | 38,195  |   |  | $ | 57,048  |  
|Interest expense, net(4)                                                                                                                                 |  |                                       | (19,538 | )      |               |       | (30,643 | )                 |  |   | (8,212       | ) |  |              | (34,146 | ) |              |   | (36,622 | ) |  |   | (41,109 | )
|Other income (expense), net                                                                                                                              |  |                                       | (302    | )      |               |       | 497     |                   |  |   | 650          |   |  |              | (720    | ) |              |   | 1,125   |   |  |   | 164     |  
|Loss on extinguishment of debt(5)                                                                                                                        |  |                                       | (28,585 | )      |               |       | (3,063  | )                 |  |   |             |   |  |              |        |   |              |   |        |   |  |   |        |  
|                                                                                                                                                         |  |                                       |         |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |  
|(Loss) income from continuing operations before income taxes,
    discontinued operations, and cumulative effect of a change in
    accounting principle |  | $                                     | (17,428 | )      |               | $     | (11,284 | )                 |  | $ | (1,902       | ) |  | $            | 6,626   |   |              | $ | 2,698   |   |  | $ | 16,103  |  
|Income tax expense (benefit)                                                                                                                             |  |                                       | (6,634  | )      |               |       | (4,307  | )                 |  |   | (686         | ) |  |              | 53,094  |   |              |   | 11,280  |   |  |   | 16,495  |  
|                                                                                                                                                         |  |                                       |         |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |  
|(Loss) income from continuing operations before discontinued
    operations, and cumulative effect of a change in accounting
    principle               |  | $                                     | (10,794 | )      |               | $     | (6,977  | )                 |  | $ | (1,216       | ) |  | $            | (46,468 | ) |              | $ | (8,582  | ) |  | $ | (392    | )
|Discontinued operations, net of income taxes(6)                                                                                                          |  |                                       | 188     |        |               |       | (611    | )                 |  |   | (11          | ) |  |              | 1,910   |   |              |   | (168    | ) |  |   | 28,410  |  

31



---



##### 



|                                                                                                                 |  |                                       |          |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |   |          |   |  |   |           |  
|---------------------------------------------------------------------------------------------------------------- |  | ------------------------------------- | -------- | ------ | ------------- | ----- | ------- | ----------------- |  | - | ------------ | - |  | ------------ | ------- | - | ------------ | - | -------- | - |  | - | --------- | -
|                                                                                                                 |  |                                       |          |        |               | Three |         |                   |  |   |              |   | 
|                                                                                                                 |  |                                       |          | Months |               |       |        
|                                                                                                                 |  | Fiscal Year Ended                     |          |        | Ended         |       |         | Fiscal Year Ended | 
|                                                                                                                 |  |                                       |          |        |               |       |         |                   | 
|                                                                                                                 |  | September 24,                         |          |        | September 30, |       |         | December 30,      |  |   | December 29, |   |  | December 31, |         |   | December 31, |  
|                                                                                                                 |  | 2000                                  |          |        | 2001          |       |         | 2001              |  |   | 2002         |   |  | 2003         |         |   | 2004         |  
|                                                                                                                 |  |                                       |          |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |  
|                                                                                                                 |  | (In thousands, except per share data) |         
|Cumulative effect of a change in accounting principle, net of
    income taxes(7)                                |  |                                       |         |        |               |       |        |                   |  |   |             |   |  |              | (45,288 | ) |              |   |         |   |  |   |          |  
|                                                                                                                 |  |                                       |          |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |  
|Net (loss) income                                                                                                |  | $                                     | (10,606  | )      |               | $     | (7,588  | )                 |  | $ | (1,227       | ) |  | $            | (89,846 | ) |              | $ | (8,750   | ) |  | $ | 28,018    |  
|                                                                                                                 |  |                                       |          |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |  
|Dividends on preferred stock                                                                                     |  | $                                     | (28,372  | )      |               | $     |        |                   |  | $ |             |   |  | $            |        |   |              | $ | (1,366   | ) |  | $ | (8,548    | )
|Preferred stock beneficial conversion                                                                            |  |                                       |         |        |               |       |        |                   |  |   |             |   |  |              |        |   |              |   |         |   |  |   | (11,457   | )
|                                                                                                                 |  |                                       |          |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |  
|Net (loss) income applicable to common stock                                                                     |  | $                                     | (38,978  | )      |               | $     | (7,588  | )                 |  | $ | (1,227       | ) |  | $            | (89,846 | ) |              | $ | (10,116  | ) |  | $ | 8,013     |  
|                                                                                                                 |  |                                       |          |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |  
|(Loss) income per common share:                                                                                  |  |                                       |          |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |   |          |   |  |   |           |  
|Basic and Diluted (before discontinued operations and cumulative
    effect of a change in accounting principle) |  | $                                     | (0.67    | )      |               | $     | (0.11   | )                 |  | $ | (0.02        | ) |  | $            | (0.72   | ) |              | $ | (0.16    | ) |  | $ | (0.31     | )
|Basic and Diluted                                                                                                |  | $                                     | (0.67    | )      |               | $     | (0.12   | )                 |  | $ | (0.02        | ) |  | $            | (1.39   | ) |              | $ | (0.16    | ) |  | $ | 0.13      |  
|Weighted average common shares outstanding(8):                                                                   |  |                                       |          |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |   |          |   |  |   |           |  
|Basic                                                                                                            |  |                                       | 58,163   |        |               |       | 64,096  |                   |  |   | 64,658       |   |  |              | 64,670  |   |              |   | 64,684   |   |  |   | 64,900    |  
|Diluted                                                                                                          |  |                                       | 58,163   |        |               |       | 64,096  |                   |  |   | 64,658       |   |  |              | 64,670  |   |              |   | 64,684   |   |  |   | 65,288    |  
|Other Financial Data:                                                                                            |  |                                       |          |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |   |          |   |  |   |           |  
|Capital expenditures                                                                                             |  | $                                     | 3,793    |        |               | $     | 5,595   |                   |  | $ | 830          |   |  | $            | 3,994   |   |              | $ | 3,365    |   |  | $ | 2,998     |  
|Net cash provided by (used in) operating activities                                                              |  | $                                     | 28,672   |        |               | $     | 17,023  |                   |  | $ | (7,377       | ) |  | $            | 10,666  |   |              | $ | 13,226   |   |  | $ | 12,839    |  
|Net cash (used in) provided by investing activities                                                              |  | $                                     | (205,050 | )      |               | $     | (35,181 | )                 |  | $ | (837         | ) |  | $            | 9,265   |   |              | $ | (231,170 | ) |  | $ | 75,458    |  
|Net cash provided by (used in) financing activities                                                              |  | $                                     | 218,962  |        |               | $     | 18,499  |                   |  | $ | (46          | ) |  | $            | (141    | ) |              | $ | 192,123  |   |  | $ | (1,874    | )
|Consolidated Balance Sheet Data:                                                                                 |  |                                       |          |        |               |       |         |                   |  |   |              |   |  |              |         |   |              |   |          |   |  |   |           |  
|Cash and cash equivalents                                                                                        |  | $                                     | 59,559   |        |               | $     | 59,900  |                   |  | $ | 51,640       |   |  | $            | 71,430  |   |              | $ | 45,609   |   |  | $ | 132,032   |  
|Total assets                                                                                                     |  | $                                     | 634,691  |        |               | $     | 700,178 |                   |  | $ | 687,078      |   |  | $            | 634,767 |   |              | $ | 842,282  |   |  | $ | 1,009,723 |  
|Total debt (including current portion)                                                                           |  | $                                     | 304,664  |        |               | $     | 327,452 |                   |  | $ | 327,631      |   |  | $            | 328,310 |   |              | $ | 454,194  |   |  | $ | 453,947   |  
|Preferred stock                                                                                                  |  | $                                     |         |        |               | $     |        |                   |  | $ |             |   |  | $            |        |   |              | $ | 76,366   |   |  | $ | 84,914    |  
|Total stockholders equity                                                                                       |  | $                                     | 274,465  |        |               | $     | 309,426 |                   |  | $ | 308,199      |   |  | $            | 227,425 |   |              | $ | 216,676  |   |  | $ | 312,636   |  






|    |                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Below are net revenue and operating expenses related to a two
    year AOL Time Warner, Inc. barter agreement which concluded in
    August 2002 and are included in continuing operations. These
    results are non-recurring and had a significant non-cash impact
    for the periods:

|                                         |  |                  |        |  |           |   |         |  
|---------------------------------------- |  | ---------------- | ------ |  | --------- | - | ------- | -
|                                         |  | Impact on        |       
|                                         |  |                  |       
|                                         |  | Net              |        |  | Operating |  
|                                         |  | Revenue          |        |  | Expense   |  
|                                         |  |                  |        |  |           |  
|                                         |  | ($ in thousands) |       
|(a) Fiscal year ended September 24, 2000 |  | $                | 504    |  |           | $ | (668    | )
|(b) Fiscal year ended September 30, 2001 |  |                  | 10,409 |  |           |   | (10,234 | )
|(c) Three months ended December 30, 2001 |  |                  | 2,437  |  |           |   | (2,433  | )
|(d) Fiscal year ended December 29, 2002  |  |                  | 6,351  |  |           |   | (6,366  | )



|    |                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Station operating expenses include engineering, programming,
    selling and general and administrative expenses, but exclude
    stock-based programming expenses.

32



---



##### 





|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | We were required to issue warrants to the International Church
    of the FourSquare Gospel (ICFG) from the date that
    ICFG ceased to broadcast its programming over KZAB-FM and
    KZBA-FM until the closing of the acquisition of KXOL-FM. On each
    of March 31, 2003, April 30, 2003, May 31, 2003,
    June 30, 2003, July 31, 2003, August 31, 2003 and
    September 30, 2003, we granted ICFG a warrant exercisable
    for 100,000 shares (an aggregate of 700,000 shares) of
    our Class A common stock at an exercise price of $6.14,
    $7.67, $7.55, $8.08, $8.17, $7.74 and $8.49 per share,
    respectively. The warrant issued on September 30, 2003 was
    the final warrant required under the amended time brokerage
    agreement due to the closing of the acquisition of KXOL-FM. We
    assigned these warrants an aggregate fair market value of
    approximately $2.9 million based on the Black-Scholes
    option pricing model in accordance with SFAS No. 123,
    Accounting for Stock-Based Compensation (SFAS
    No. 123). The fair market value of each warrant was
    recorded as a non-recurring stock-based programming expense on
    the respective date of grant.
|   
|(4) | Interest expense, net includes non-cash interest, such as the
    accretion of principal, the amortization of discounts on debt
    and the amortization of deferred financing costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(5) | In April 2002, the Financial Accounting Standards Board
    (FASB) issued SFAS No. 145, Rescission of
    FASB Statements No. 4, 44, and 64, Amendment of FASB
    Statement No. 13, and Technical Corrections
    (SFAS No. 145). SFAS No. 145 rescinds FASB
    Statement No. 4, Reporting Gains and Losses from
    Extinguishment of Debt, and an amendment of that
    Statement, FASB Statement No. 44, Accounting for
    Intangible Assets of Motor Carriers and FASB Statement
    No. 64, Accounting for Leases and other
    existing authoritative pronouncements to make various technical
    corrections and clarify meanings, or to describe their
    applicability under changed conditions. The adoption of
    SFAS No. 145 required our extraordinary loss
    recognized on extinguishments of debt in fiscal years 2000 and
    2001 to be reclassified to income or loss from continuing
    operations before income taxes, discontinued operations and
    cumulative effect of a change in accounting principle.                                                                                                                                                                       



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For the fiscal year ended September 24, 2000, we recorded
    an extraordinary loss of $28.6 million related to the early
    retirement of our 11% senior unsecured notes due 2004 and
    121/2% senior
    unsecured notes due 2002, at a premium of approximately
    $23.1 million in excess of their carrying value and from
    the write-off of the related unamortized deferred financing
    costs of approximately $5.5 million. This extraordinary
    loss was reclassified to a loss on extinguishment of debt due to
    the adoption of SFAS No. 145.
|
| | For the fiscal year ended September 30, 2001, we repaid
    $66.2 million of the outstanding indebtedness and accrued
    interest under a senior credit facility, which we then
    terminated. We recorded an extraordinary loss of approximately
    $3.1 million, which relates to the write-off of the related
    unamortized deferred financing costs. This extraordinary loss
    was reclassified to a loss on extinguishment of debt due to the
    adoption of SFAS No. 145.                                                                              



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | On December 31, 2001, we adopted the provisions of
    SFAS No. 144, Accounting for the Impairment of
    Long-Lived Assets and for Long-Lived Assets to be Disposed
    Of (SFAS No. 144). Under SFAS No. 144,
    discontinued businesses or assets held for sale are removed from
    the results of continuing operations. We determined that the
    sales of KPTI-FM serving the San Francisco, California
    market, KLEY-FM and KSAH-AM serving the San Antonio, Texas
    market and KTCY-FM serving the Dallas, Texas market, each met
    the criteria in accordance with SFAS No. 144. The
    results of operations of these stations have been classified as
    discontinued operations in the selected historical consolidated
    statements of operations.



| |                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On August 23, 2002, we sold for $35.0 million
    KTCY-FMs assets held for sale consisting of intangible
    assets and property and equipment. We recognized a gain of
    approximately $1.8 million, net of closing costs and taxes.                                                                           
|
| | On January 30, 2004, we sold for $24.4 million
    KLEY-FMs and KSAH-AMs assets held for sale
    consisting of $11.3 million of intangible assets, net, and
    $0.6 million of property and equipment. We recognized a
    gain of approximately $11.6 million, net of closing costs
    and taxes on the sale.

33



---



##### 





| |                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On September 24, 2004, we sold for $30.0 million
    KPTI-FMs assets held for sale consisting of
    $13.0 million of intangible assets, net, and
    $0.3 million of property and equipment. We recognized a
    gain of approximately $16.8 million, net of closing costs
    and taxes on the sale.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7) | In July 2001, FASB issued SFAS No. 142, Goodwill
    and Other Intangible Assets (SFAS No. 142).
    SFAS No. 142 requires that goodwill and intangible
    assets with indefinite useful lives no longer be amortized, but
    instead tested for impairment at least annually in accordance
    with the provisions of SFAS No. 142. We have concluded
    that our intangible assets, comprised primarily of FCC licenses,
    qualify as indefinite-life intangible assets under
    SFAS No. 142.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | After performing the transitional impairment evaluation of our
    indefinite-life intangible assets on December 31, 2001, we
    determined that the carrying value of certain indefinite-life
    intangible assets exceeded their respective fair market values.
    As a result of adopting SFAS No. 142 in the fiscal
    year ended December 29, 2002, we recorded a non-cash charge
    for the cumulative effect of a change in accounting principle of
    $45.3 million, net of an income tax benefit of
    $30.2 million.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(8) | On September 29, 1999, we filed a third amended and
    restated certificate of incorporation which resulted in
    (1) the redesignation of our previously outstanding shares
    of Class A common stock into shares of Class B common
    stock, (2) a 50-to-1 stock split of our Class B common
    stock, and (3) a reduction in the par value of our
    Class A common stock and Class B common stock from
    $0.01 per share to $0.0001 per share. The financial
    information has been restated to reflect this redesignation,
    stock split and change in par value.






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

General Overview








34



---



##### 







Fiscal Year Ended 2004 Compared to Fiscal Year Ended 2003




|            |                                                 |                                             |         |         |        |   |         |         |        |  |        |        |        |  |    |      |      |  
|----------- | ----------------------------------------------- | ------------------------------------------- | ------- | ------- | ------ | - | ------- | ------- | ------ |  | ------ | ------ | ------ |  | -- | ---- | ---- | -
|            |                                                 | Fiscal Years Ended                          |         |         | Change |  
|            |                                                 |                                             |         |         |        |  
|            |                                                 | 2003                                        |         |         | 2004   |   |         | $       |        |  | %      |       
|            |                                                 |                                             |         |         |        |   |         |         |        |  |        |       
|            |                                                 | (In thousands)                              |         |         |        |   |        
|Net revenue |                                                 | $                                           | 135,266 |         |        | $ | 156,443 |         |        |  | 21,177 |        |        |  | 16 | %   
|            | Engineering and programming expense             |                                             |         | 23,329  |        |   |         | 30,941  |        |  |        | 7,612  |        |  |    | 33   | %   
|            | Stock-based programming expense                 |                                             |         | 2,943   |        |   |         |        |        |  |        | (2,943 | )      |  |    | (100 | )%  
|            | Selling, general and administrative expense     |                                             |         | 50,045  |        |   |         | 57,261  |        |  |        | 7,216  |        |  |    | 14   | %   
|            | Corporate expenses                              |                                             |         | 17,853  |        |   |         | 13,346  |        |  |        | (4,507 | )      |  |    | (25  | )%  
|            | Depreciation and amortization                   |                                             |         | 2,901   |        |   |         | 3,308   |        |  |        | 407    |        |  |    | 14   | %   
|            | Gain on sale of radio stations                  |                                             |         |        |        |   |         | (5,461  | )      |  |        | (5,461 | )      |  |    | 100  | %   
|            |                                                 |                                             |         |         |        |   |         |         |        |  |        |       
|            |                                                 | Operating income from continuing operations |         |         | 38,195 |   |         |         | 57,048 |  |        |        | 18,853 |  |    |      | 49.4 | %
|            | Interest expense, net                           |                                             |         | (36,622 | )      |   |         | (41,109 | )      |  |        | (4,487 | )      |  |    | 12   | %   
|            | Other income, net                               |                                             |         | 1,125   |        |   |         | 164     |        |  |        | (961   | )      |  |    | (85  | )%  
|            | Income tax expense                              |                                             |         | 11,280  |        |   |         | 16,495  |        |  |        | 5,215  |        |  |    | 46   | %   
|            | (Loss) income from discontinued operations, net |                                             |         | (168    | )      |   |         | 28,410  |        |  |        | 28,578 |        |  |    | N/A  |     
|            |                                                 |                                             |         |         |        |   |         |         |        |  |        |       
|            |                                                 | Net (loss) income                           |         | $       | (8,750 | ) |         | $       | 28,018 |  |        | $      | 36,768 |  |    |      | N/A  |  
|            |                                                 |                                             |         |         |        |   |         |         |        |  |        |       

Net Revenue.


Engineering and Programming Expenses.


Stock-Based Programming Expenses.


Selling, General and Administrative Expenses.


35



---



##### 





Corporate Expenses.


Gain on sale of radio stations.


Operating Income from Continuing Operations.


Interest Expense, Net.


Income Taxes.


Discontinued Operations, Net of Taxes.


Net Income (Loss).


36



---



##### 



Fiscal Year Ended 2003 Compared to Fiscal Year Ended 2002




|            |                                                            |                                             |         |         |         |   |         |         |        |   |      |         |        |   |   |      |     |   
|----------- | ---------------------------------------------------------- | ------------------------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------ | - | ---- | ------- | ------ | - | - | ---- | --- | --
|            |                                                            | Fiscal Years Ended                          |         |         | Change  |  
|            |                                                            |                                             |         |         |         |  
|            |                                                            | 2002                                        |         |         | 2003    |   |         | $       |        |   | %    |        
|            |                                                            |                                             |         |         |         |   |         |         |        |   |      |        
|            |                                                            | (In thousands)                              |         |         |         |   |        
|Net revenue |                                                            | $                                           | 135,688 |         |         | $ | 135,266 |         |        |   | (422 | )       |        |   | 0 | %   
|            | Engineering and programming expense                        |                                             |         | 23,460  |         |   |         | 23,329  |        |   |      | (131    | )      |   |   | (1   | )% 
|            | Stock-based programming expense                            |                                             |         |        |         |   |         | 2,943   |        |   |      | 2,943   |        |   |   | 100  | %  
|            | Selling, general and administrative expense                |                                             |         | 54,319  |         |   |         | 50,045  |        |   |      | (4,274  | )      |   |   | (8   | )% 
|            | Corporate expenses                                         |                                             |         | 13,546  |         |   |         | 17,853  |        |   |      | 4,307   |        |   |   | 32   | %  
|            | Depreciation and amortization                              |                                             |         | 2,871   |         |   |         | 2,901   |        |   |      | 30      |        |   |   | 1    | %  
|            |                                                            |                                             |         |         |         |   |         |         |        |   |      |        
|            |                                                            | Operating income from continuing operations |         |         | 41,492  |   |         |         | 38,195 |   |      |         | (3,297 | ) |   |      | (8  | )%
|            | Interest expense, net                                      |                                             |         | (34,146 | )       |   |         | (36,622 | )      |   |      | (2,476  | )      |   |   | 7    | %  
|            | Other (expense) income, net                                |                                             |         | (720    | )       |   |         | 1,125   |        |   |      | 1,845   |        |   |   | (256 | )% 
|            | Income tax expense                                         |                                             |         | 53,094  |         |   |         | 11,280  |        |   |      | (41,814 | )      |   |   | (79  | )% 
|            | Income (loss) from discontinued operations, net            |                                             |         | 1,910   |         |   |         | (168    | )      |   |      | (2,078  | )      |   |   | (109 | )% 
|            | Cumulative effect of a change in accounting principle, net |                                             |         | (45,288 | )       |   |         |        |        |   |      | 45,288  |        |   |   | (100 | )% 
|            |                                                            |                                             |         |         |         |   |         |         |        |   |      |        
|            |                                                            | Net (loss) income                           |         | $       | (89,846 | ) |         |         | (8,750 | ) |      | $       | 81,096 |   |   |      | (90 | )%
|            |                                                            |                                             |         |         |         |   |         |         |        |   |      |        

Net Revenue.


Stock-Based Programming Expenses.


Selling, General and Administrative Expenses.


Corporate Expenses.


37



---



##### 



Operating Income from Continuing Operations.


Interest Expense, Net.


Other, Net.


Income Taxes.


Discontinued Operations, Net of Taxes.


Cumulative Effect of a Change in Accounting Principle, Net of
Taxes.


Net Loss.


38



---



##### 





|                                                                                    |  |                       |         |   |      |   |         |  
|----------------------------------------------------------------------------------- |  | --------------------- | ------- | - | ---- | - | ------- | -
|                                                                                    |  | Fiscal Year Ended     |        
|                                                                                    |  |                       |        
|                                                                                    |  | 2002                  |         |   | 2003 |  
|                                                                                    |  |                       |         |   |      |  
|                                                                                    |  | (In thousands, except |        
|                                                                                    |  | per share data)       |        
|                                                                                    |  | (Unaudited)           |        
|Reported net loss applicable to common stockholder:                                 |  | $                     | (89,846 | ) |      | $ | (10,116 | )
|Add back:cumulative effect of a change in accounting
    principle, net of tax(1)   |  |                       | 45,288  |   |      |   |        |  
|Add back:income tax valuation allowance(2)                                          |  |                       | 55,358  |   |      |   |        |  
|                                                                                    |  |                       |         |   |      |  
|Adjusted net income (loss)                                                          |  | $                     | 10,800  |   |      | $ | (10,116 | )
|                                                                                    |  |                       |         |   |      |  
|Basic and diluted loss per share:                                                   |  |                       |         |   |      |   |         |  
|Reported net loss per share:                                                        |  | $                     | (1.39   | ) |      | $ | (0.16   | )
|Cumulative effect per share of a change in accounting principle,
    net of tax(1): |  |                       | 0.70    |   |      |   |        |  
|Income tax valuation allowance per share(2):                                        |  |                       | 0.86    |   |      |   |        |  
|                                                                                    |  |                       |         |   |      |  
|Adjusted net income (loss) per share:                                               |  | $                     | 0.17    |   |      | $ | (0.16   | )
|                                                                                    |  |                       |         |   |      |  






|    |                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As a result of the adoption of SFAS No. 142 on
    December 31, 2001, we incurred a non-cash transitional
    charge of $45.3 million, net of income tax benefit of
    $30.2 million, due to the cumulative effect of the change
    in accounting principle.
|   
|(2) | As a result of the adoption of SFAS No. 142 on
    December 31, 2001, we incurred a non-cash income tax
    expense of $55.4 million to establish a valuation allowance
    against deferred tax assets.                                                      

Liquidity and Capital Resources


5 8 5 8


39



---



##### 





|                                                          |                                           |                   |          |         |        |   |        |        |  |  |          |   | 
|--------------------------------------------------------- | ----------------------------------------- | ----------------- | -------- | ------- | ------ | - | ------ | ------ |  |  | -------- | - | 
|                                                          |                                           | Fiscal Year Ended |          |         | Change |  
|                                                          |                                           |                   |          |         |        |  
|                                                          |                                           | 2003              |          |         | 2004   |   |        | $      | 
|                                                          |                                           |                   |          |         |        |   |        |        | 
|                                                          |                                           | (In thousands)    |          |         |       
|Capital expenditures                                      |                                           | $                 | 3,365    |         |        | $ | 2,998  |        |  |  | (367     | )
|                                                          |                                           |                   |          |         |        |   |        |        | 
|Net cash flows provided by operating activities           |                                           | $                 | 13,226   |         |        | $ | 12,839 |        |  |  | (387     | )
|Net cash flows (used in) provided by investing activities |                                           |                   | (231,170 | )       |        |   | 75,458 |        |  |  | 306,628  |  
|Net cash flows provided by (used in) financing activities |                                           |                   | 192,123  |         |        |   | (1,874 | )      |  |  | (193,997 | )
|                                                          |                                           |                   |          |         |        |   |        |        | 
|                                                          | Net increase in cash and cash equivalents |                   | $        | (25,821 | )      |   | $      | 86,423 |  |  |          |   | 
|                                                          |                                           |                   |          |         |        |   |        |        | 

Net Cash Flows Provided By Operating Activities.


Net Cash Flows (Used In) Provided by Investing
Activities.


Net Cash Flows Provided By (Used In) Financing
Activities.




|                                                          |                                           |                   |        |        |        |   |          |         |   |  |          |   | 
|--------------------------------------------------------- | ----------------------------------------- | ----------------- | ------ | ------ | ------ | - | -------- | ------- | - |  | -------- | - | 
|                                                          |                                           | Fiscal Year Ended |        |        | Change |  
|                                                          |                                           |                   |        |        |        |  
|                                                          |                                           | 2002              |        |        | 2003   |   |          | $       |  
|                                                          |                                           |                   |        |        |        |   |          |         |  
|                                                          |                                           | (In thousands)    |        |        |       
|Capital expenditures                                      |                                           | $                 | 3,994  |        |        | $ | 3,365    |         |   |  | (629     | )
|                                                          |                                           |                   |        |        |        |   |          |         |  
|Net cash flows provided by operating activities           |                                           | $                 | 10,666 |        |        | $ | 13,226   |         |   |  | 2,560    |  
|Net cash flows provided by (used in) investing activities |                                           |                   | 9,265  |        |        |   | (231,170 | )       |   |  | (240,435 | )
|Net cash flows (used in) provided by financing activities |                                           |                   | (141   | )      |        |   | 192,123  |         |   |  | 192,264  |  
|                                                          |                                           |                   |        |        |        |   |          |         |  
|                                                          | Net increase in cash and cash equivalents |                   | $      | 19,790 |        |   | $        | (25,821 | ) |  |          |   | 
|                                                          |                                           |                   |        |        |        |   |          |         |  

Net Cash Flows Provided By Operating Activities.


Net Cash Flows Provided By (Used In) Investing
Activities.


40



---



##### 



Net Cash Flows (Used In) Provided By Financing
Activities. 3 4


5 8




| |   |                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the economic conditions within the radio broadcasting industry
    and economic conditions in general will not deteriorate in any
    material respect;
|
| |  | we will continue to successfully implement our business
    strategy; and                                                                              
|
| |  | we will not incur any material unforeseen liabilities, including
    environmental liabilities.                                                        













41



---



##### 





Contractual Obligations




|                                                                              |  |       |         |  |      |  |         |      |  |  |        |  |  |      |        |  |      |  |        |            |  |  |         |  |  |  |         | 
|----------------------------------------------------------------------------- |  | ----- | ------- |  | ---- |  | ------- | ---- |  |  | ------ |  |  | ---- | ------ |  | ---- |  | ------ | ---------- |  |  | ------- |  |  |  | ------- | 
|Contractual Obligations                                                       |  | Total |         |  | 2005 |  |         | 2006 |  |  | 2007   |  |  | 2008 |        |  | 2009 |  |        | Thereafter | 
|                                                                              |  |       |         |  |      |  |         |      |  |  |        |  |  |      |        |  |      |  |        |            | 
|Recorded obligations:                                                         |  |       |         |  |      |  |         |      |  |  |        |  |  |      |        |  |      |  |        |            |  |  |         |  |  |  |         | 
|Senior secured credit facilities term loan due 2009(a)                        |  | $     | 126,225 |  |      |  | 126,225 |      |  |  |       |  |  |      |       |  |      |  |       |            |  |  |        |  |  |  |        | 
|95/8% senior
    subordinated notes due 2009(b)                               |  |       | 490,846 |  |      |  | 32,244  |      |  |  | 32,244 |  |  |      | 32,244 |  |      |  | 32,244 |            |  |  | 361,870 |  |  |  |         | 
|Other long-term debt(c)                                                       |  |       | 3,721   |  |      |  | 3,154   |      |  |  | 75     |  |  |      | 79     |  |      |  | 85     |            |  |  | 90      |  |  |  | 238     | 
|103/4%
    Series B cumulative exchangeable redeemable preferred
    stock(d) |  |       | 195,757 |  |      |  |        |      |  |  |       |  |  |      |       |  |      |  | 2,843  |            |  |  | 13,647  |  |  |  | 179,267 | 
|                                                                              |  |       |         |  |      |  |         |      |  |  |        |  |  |      |        |  |      |  |        |            | 
|                                                                              |  | $     | 816,549 |  |      |  | 161,623 |      |  |  | 32,319 |  |  |      | 32,323 |  |      |  | 35,172 |            |  |  | 375,607 |  |  |  | 179,505 | 
|                                                                              |  |       |         |  |      |  |         |      |  |  |        |  |  |      |        |  |      |  |        |            | 
|Unrecorded obligations:                                                       |  |       |         |  |      |  |         |      |  |  |        |  |  |      |        |  |      |  |        |            |  |  |         |  |  |  |         | 
|Operating leases(e)                                                           |  |       | 26,852  |  |      |  | 2,992   |      |  |  | 2,929  |  |  |      | 2,736  |  |      |  | 2,533  |            |  |  | 2,246   |  |  |  | 13,416  | 
|Employment agreements(f)                                                      |  |       | 15,928  |  |      |  | 9,082   |      |  |  | 4,552  |  |  |      | 1,619  |  |      |  | 637    |            |  |  | 38      |  |  |  |        | 
|                                                                              |  |       |         |  |      |  |         |      |  |  |        |  |  |      |        |  |      |  |        |            | 
|                                                                              |  | $     | 42,780  |  |      |  | 12,074  |      |  |  | 7,481  |  |  |      | 4,355  |  |      |  | 3,170  |            |  |  | 2,284   |  |  |  | 13,416  | 
|                                                                              |  |       |         |  |      |  |         |      |  |  |        |  |  |      |        |  |      |  |        |            | 
|Total obligations                                                             |  | $     | 859,329 |  |      |  | 173,697 |      |  |  | 39,800 |  |  |      | 36,678 |  |      |  | 38,342 |            |  |  | 377,891 |  |  |  | 192,921 | 
|                                                                              |  |       |         |  |      |  |         |      |  |  |        |  |  |      |        |  |      |  |        |            | 






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Our senior secured credit facility is a variable-rate debt
    instrument. Pursuant to the senior secured credit facility
    credit agreement, the net cash proceeds received from the sales
    of the Chicago (WDEK-FM, WKIE-FM, WKIF-FM) and Los Angeles
    (KZAB-FM and KZBA-FM) radio stations, when and if completed,
    must be offered to the noteholders to repay our borrowings under
    the senior secured credit facilities. Therefore, we reclassified
    the senior secured credit facilities balance from long-term debt
    to current debt. For the purpose of calculating our contractual
    obligations, we assumed that the senior secured credit facility
    will be paid-down in April 2005, assuming the noteholders accept
    the pre-payment, which is at the option of the noteholders, and
    used an interest rate of approximately 6.0%. See Note 9 to
    our consolidated financial statements for disclosure associated
    with the terms of these instruments.
|   
|(b) |  | Our existing
    95/8% notes
    are fixed-rate debt instruments. See Note 8 to our
    consolidated financial statements for disclosure associated with
    the terms of these instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(c) |  | Other long-term debts are fixed-rate debt instruments, which are
    a capital lease and a mortgage on a building. See Note 10
    to our consolidated financial statements for disclosure
    associated with the terms of these instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(d) |  | Our Series B preferred stock has no specified maturity.
    However, holders of the preferred stock may exercise an option
    on October 15, 2013 to require us to redeem all or a
    portion of their preferred stock. The holders of shares of
    Series B preferred stock are entitled to receive cumulative
    dividends at a rate of
    103/4%
    per year of the $1,000 liquidation preference per share. All
    dividends are cumulative from the date of issuance of the
    Series B preferred stock and are payable quarterly in
    arrears on October 15, January 15, April 15 and July
    15 of each year. On or before October 15, 2008, we, at our
    option, may pay dividends in cash or in additional fully paid
    and non-assessable shares of Series B preferred stock
    (including fractional shares or, at our option, cash in lieu of
    fractional shares) having an aggregate liquidation preference
    equal                                                    

42



---



##### 



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to the amount of such dividends. For the purpose of calculating
    our contractual obligations we assumed that the Series B
    preferred stock will pay dividends in additional fully paid and
    non-assessable shares until October 15, 2008, which are
    excluded in this contractual obligation table. We expect those
    dividends to be approximately $9.5 million,
    $10.6 million, $11.7 million, and $10.2 million
    for the fiscal years ended 2005, 2006, 2007 and 2008,
    respectively.



| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | After October 15, 2008, dividends may be paid only in cash,
    which are included in this contractual obligation table. Our
    ability to pay cash dividends is subject to, and will be limited
    by, the terms of our existing
    95/8% notes
    and our senior secured credit facilities.



|    |  |                                                                                                                                                                                                                                                                                                      
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(e) |  | Included in our non-cancelable operating lease obligations are
    minimum lease payments for office space and facilities and
    certain equipment. See Note 13(a) to the consolidated
    financial statements for a discussion of the terms of these
    lease agreements.                        
|   
|(f) |  | At December 31, 2004, we are committed to employment
    contracts for certain executives, on-air talent and general
    managers expiring through 2009. See Note 13(b) to the
    consolidated financial statements for further discussion on the
    nature and terms of our employment agreements.







Off-Balance Sheet Arrangements




Critical Accounting Policies




Accounting for Intangible Assets




43



---



##### 















Accounting for Income Taxes




44



---



##### 





Valuation of Accounts Receivable




Revenue Recognition




Contingencies and Litigations




Cumulative Effect of Accounting Change






45



---



##### 







|                                                                                   |                                                                   |                            |         |        |              |  |         |              |         |   |       |   |       | 
|---------------------------------------------------------------------------------- | ----------------------------------------------------------------- | -------------------------- | ------- | ------ | ------------ |  | ------- | ------------ | ------- | - | ----- | - | ----- | 
|                                                                                   |                                                                   | Fiscal Year                |         |        | Fiscal Year  |  |         | Fiscal Year  |        
|                                                                                   |                                                                   | December 29,               |         |        | December 31, |  |         | December 31, |        
|                                                                                   |                                                                   | 2002                       |         |        | 2003         |  |         | 2004         |        
|                                                                                   |                                                                   |                            |         |        |              |  |         |              |        
|Reported net (loss) income applicable to common stockholders                       |                                                                   | $                          | (89,846 | )      |              |  | (10,116 | )            |         |   | 8,013 |  
|                                                                                   | Add back cumulative effect of accounting principle, net of tax(1) |                            |         | 45,288 |              |  |         |             |         |   |       |  |      
|                                                                                   | Add back income tax valuation allowance(2)                        |                            |         | 55,358 |              |  |         |             |         |   |       |  |      
|                                                                                   |                                                                   |                            |         |        |              |  |         |              |        
|                                                                                   |                                                                   | Adjusted net income (loss) |         | $      | 10,800       |  |         |              | (10,116 | ) |       |   | 8,013 | 
|                                                                                   |                                                                   |                            |         |        |              |  |         |              |        
|Basic and diluted (loss) income per share attributable to common
    stockholders: |                                                                   |                            |         |        |              |  |         |              |         |   |       |  
|Reported net (loss) income per share                                               |                                                                   | $                          | (1.39   | )      |              |  | (0.16   | )            |         |   | 0.13  |  
|Cumulative effect per share of a change in accounting principle,
    net of tax(1) |                                                                   |                            | 0.70    |        |              |  |        |              |         |   |      |  
|Income tax valuation allowance per share(2)                                        |                                                                   |                            | 0.86    |        |              |  |        |              |         |   |      |  
|                                                                                   |                                                                   |                            |         |        |              |  |         |              |        
|Adjusted net income (loss) per share attributable to common
    stockholders       |                                                                   | $                          | 0.17    |        |              |  | (0.16   | )            |         |   | 0.13  |  
|                                                                                   |                                                                   |                            |         |        |              |  |         |              |        






|    |                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As a result of the adoption of SFAS No. 142 on
    December 31, 2001, we incurred a non-cash transitional
    charge of $45.3 million, net of income tax benefit of
    $30.2 million, due to the cumulative effect of the change
    in accounting principle.
|   
|(2) | As a result of adopting SFAS No. 142 on
    December 31, 2001, we incurred a non-cash income tax
    expense of $55.4 million to establish a valuation allowance
    against deferred tax assets on the date of adoption.                                     



New Accounting Pronouncements




46



---



##### 










|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures About Market
    Risk










|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure








|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Evaluation Of Disclosure Controls And Procedures.


47



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##### 





Changes In Internal Control Over Financial Reporting.


Managements Report On Internal Control Over Financial
Reporting.






Internal Control-Integrated
Framework






Raúl
Alarcón, Jr.







|       |                                    
|------ | -----------------------------------
|Title: | Chairman of the Board of Directors,



Joseph A. García













48



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##### 






Item 9B.     Other
Information







PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant



|                        |  |     |    |  |          |                                                                              
|----------------------- |  | --- | -- |  | -------- | -----------------------------------------------------------------------------
|Name                    |  | Age |    |  | Position
|                        |  |     |    |  |         
|Raúl Alarcón, Jr.       |  |     | 48 |  |          | Chairman of the Board of Directors, Chief Executive Officer and
    President
|Pablo Raúl Alarcón, Sr. |  |     | 78 |  |          | Chairman Emeritus and Director                                               
|Joseph A. García        |  |     | 59 |  |          | Chief Financial Officer, Executive Vice President and Secretary              
|Marko Radlovic          |  |     | 41 |  |          | Chief Revenue Officer                                                        
|William B. Tanner       |  |     | 60 |  |          | Executive Vice President of Programming                                      
|Dan Mason               |  |     | 53 |  |          | Director                                                                     
|Antonio S. Fernandez    |  |     | 65 |  |          | Director                                                                     
|Jose A. Villamil        |  |     | 58 |  |          | Director                                                                     
|Jason L. Shrinsky       |  |     | 67 |  |          | Director                                                                     

Raúl Alarcón, Jr.


Pablo Raúl Alarcón, Sr.


Joseph A. García


Marko Radlovic


49



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##### 



William B. Tanner


Dan Mason


Antonio S. Fernandez


Jose A. Villamil


Jason L. Shrinsky




Section 16(a) Beneficial Ownership Reporting
Compliance






50



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##### 



Code of Ethics


www.spanishbroadcasting.com.


Composition of the Audit Committee; Audit Committee Financial
Expert









|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation



Summary Compensation Table


|                  |  |                           |  |        |            |  |       |   |           |              |  |              |                 |  |  |     |         |     |  |  |         | 
|----------------- |  | ------------------------- |  | ------ | ---------- |  | ----- | - | --------- | ------------ |  | ------------ | --------------- |  |  | --- | ------- | --- |  |  | ------- | 
|                  |  |                           |  |        |            |  |       |   |           |              |  | Long Term    |                
|                  |  |                           |  |        |            |  |       |   |           |              |  | Compensation |                
|                  |  |                           |  |        |            |  |       |   |           |              |  | Awards       |                
|                  |  |                           |  |        |           
|                  |  | Annual Compensation       |  |        | Securities | 
|                  |  |                           |  |        | Underlying | 
|                  |  |                           |  | Salary |            |  | Bonus |   |           | Other Annual |  |              | Options/SARs    | 
|Name              |  | Principal Position        |  | Year   |            |  | ($)   |   |           | ($)          |  |              | Compensation($) |  |  | (#) |        
|                  |  |                           |  |        |            |  |       |   |           |              |  |              |                 |  |  |     |        
|Raúl Alarcón, Jr. |  | Chief Executive Officer,  |  |        | 2004       |  |       | $ | 1,226,888 |              |  | $            | 985,245         |  |  | $   | 104,132 | (a) |  |  | 100,000 | 
|                  |  | President and Chairman    |  |        | 2003       |  |       |   | 1,226,888 |              |  |              | 710,183         |  |  |     | 122,799 | (b) |  |  | 100,000 | 
|                  |  | of the Board of Directors |  |        | 2002       |  |       |   | 1,226,888 |              |  |              | 790,629         |  |  |     | 101,008 | (c) |  |  | 100,000 | 
|Joseph A. García  |  | Executive Vice President, |  |        | 2004       |  |       | $ | 400,000   |              |  | $            | 200,000         |  |  | $   |        | (e) |  |  | 50,000  | 
|                  |  | Chief Financial Officer   |  |        | 2003       |  |       |   | 400,000   |              |  |              | 160,000         |  |  |     |        | (e) |  |  |        | 
|                  |  | and Secretary             |  |        | 2002       |  |       |   | 423,077   | (d)          |  |              | 200,000         |  |  |     |        | (e) |  |  | 150,000 | 
|Marko Radlovic    |  | Chief Revenue Officer(f)  |  |        | 2004       |  |       | $ | 500,000   |              |  | $            | 50,000          |  |  | $   |        | (e) |  |  | 62,500  | 
|                  |  |                           |  |        | 2003       |  |       |   | 416,538   |              |  |              | 97,199          |  |  |     |        | (e) |  |  | 90,000  | 
|                  |  |                           |  |        | 2002       |  |       |   |          |              |  |              |                |  |  |     |        |     |  |  |        | 
|William B. Tanner |  | Executive Vice President  |  |        | 2004       |  |       | $ | 658,972   |              |  | $            | 391,500         |  |  | $   | 64,300  | (g) |  |  | 15,000  | 
|                  |  | of Programming            |  |        | 2003       |  |       |   | 617,540   |              |  |              | 446,500         |  |  |     |        | (e) |  |  | 15,000  | 
|                  |  |                           |  |        | 2002       |  |       |   | 563,582   |              |  |              | 192,000         |  |  |     | 154,742 | (h) |  |  | 15,000  | 






|    |  |                                                                                                                                                                                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Mr. Alarcón, Jr. received personal benefits in
    addition to his salary and bonus, including use of automobiles.
    We paid an aggregate of $90,929 in fiscal year 2004, for
    automobiles used by Mr. Alarcón, Jr. and $13,203
    for personal travel expenses.                                                                         
|   
|(b) |  | Mr. Alarcón, Jr. received personal benefits in
    addition to his salary and bonus, including use of automobiles.
    We paid an aggregate of $82,265 in fiscal year 2003 for
    automobiles used, including a drivers salary, for
    Mr. Alarcón, Jr. In addition,
    Mr. Alarcón, Jr. received $40,534 for personal
    travel expenses.
|   
|(c) |  | Mr. Alarcón, Jr. received personal benefits in
    addition to his salary and bonus, including use of automobiles.
    We paid an aggregate of $98,388 in fiscal year 2002 for
    automobiles used, including a                                                                                                                               

51



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##### 



|    |  |                                                                                                                                                                                                                                                                                                                                                                              
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | drivers salary, for Mr. Alarcón, Jr. These
    amounts exclude payments made by us in connection with our lease
    of an apartment in New York City owned by
    Mr. Alarcón, Jr., which was terminated in
    September 2002. Mr. Alarcón, Jr. and others used
    the apartment while in New York on SBS business.                                                       
|   
|(d) |  | Includes $23,077 reimbursed to Mr. García for unused
    vacation time from prior years.                                                                                                                                                                                                                                                                                     
|   
|(e) |  | Excludes perquisites and other personal benefits, securities or
    property which aggregate the lesser of $50,000 or 10% of the
    total of annual salary and bonus.                                                                                                                                                                                                       
|   
|(f) |  | Mr. Radlovic became our Chief Revenue Officer on
    December 1, 2003. For the preceding portion of fiscal year
    2003, he served as Vice President/ General Manager for our Los
    Angeles radio cluster and was not an executive officer.                                                                                                                               
|   
|(g) |  | Mr. Tanner received $24,000 for automobile allowances in
    addition to his salary and bonus. In addition, Mr. Tanner
    realized $40,300 upon exercise of 10,000 shares of
    Class A common stock at an exercise price of $7.07 on
    November 30, 2004.                                                                                                               
|   
|(h) |  | In December 2002, we made a payment of $154,742 to
    Mr. Tanner pursuant to an addendum to
    Mr. Tanners employment agreement which required us to
    make a payment to Mr. Tanner if the price of our
    Class A common stock had not reached specified levels by
    August 30, 2002. Such amounts were accrued in our financial
    statements in fiscal year 2002.

Stock Options




Option/ SAR Grants in Last Fiscal Year


|                  |  |                   |         |            |              |  |      |             |                      |                         |                 |  |             |        |          |  |         |   |         |  |  |   |           | 
|----------------- |  | ----------------- | ------- | ---------- | ------------ |  | ---- | ----------- | -------------------- | ----------------------- | --------------- |  | ----------- | ------ | -------- |  | ------- | - | ------- |  |  | - | --------- | 
|                  |  | Individual Grants |         |            |              |  |     
|                  |  |                   |         |            |             
|                  |  |                   |         | Percent of |              |  |      |             | Potential Realizable |                        
|                  |  | Number of         |         |            | Total        |  |      |             |                      | Value at Assumed Annual |                
|                  |  | Securities        |         |            | Options/SARs |  |      |             |                      | Rates of Stock Price    |                
|                  |  | Underlying        |         |            | Granted to   |  |      |             |                      | Appreciation for        |                
|                  |  | Options/SARs      |         |            | Employees in |  |      | Exercise or |                      |                         |                 |  | Option Term |       
|                  |  | Granted           |         |            | Fiscal Year  |  |      | Base Price  |                      |                         |                 |  |             |       
|Name              |  | (#)(a)            |         |            | 2004         |  |      | ($/Sh)      |                      |                         | Expiration Date |  |             | 5% ($) |          |  | 10% ($) |  
|                  |  |                   |         |            |              |  |      |             |                      |                         |                 |  |             |        |          |  |         |  
|Raúl Alarcón, Jr. |  |                   | 100,000 | (b)        |              |  | 10.1 | %           |                      | $                       | 9.98            |  |             |        | 10/27/14 |  |         | $ | 627,637 |  |  | $ | 1,590,555 | 
|Joseph A. García  |  |                   | 50,000  | (c)        |              |  | 5.1  |             |                      |                         | 11.78           |  |             |        | 01/21/14 |  |         |   | 370,419 |  |  |   | 938,714   | 
|Marko Radlovic    |  |                   | 62,500  | (d)        |              |  | 6.3  |             |                      |                         | 10.10           |  |             |        | 11/03/14 |  |         |   | 396,989 |  |  |   | 1,006,050 | 
|William B. Tanner |  |                   | 15,000  | (e)        |              |  | 1.5  |             |                      |                         | 8.66            |  |             |        | 08/30/09 |  |         |   | 35,889  |  |  |   | 79,305    | 






|    |  |                                                                                                                                                                                                                                                                                                                                                           
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | These options were granted under our 1999 Stock Option Plan. The
    options that are not otherwise exercisable prior to a change in
    control of SBS will become exercisable on the date of a change
    in control of SBS and will remain exercisable for the remainder
    of the term of the option, as discussed in our 1999 Stock Option
    Plan.
|   
|(b) |  | Mr. Alarcón, Jr.s options vested and became
    exercisable immediately upon the granting of such options on
    October 27, 2004.                                                                                                                                                                                                                       
|   
|(c) |  | Twenty percent of Mr. Garcías options vested
    immediately on January 21, 2004, the date of grant, and the
    rest vest ratably over a four year period.                                                                                                                                                                                              
|   
|(d) |  | Thirty-three percent of Mr. Radlovics options vested
    immediately on November 3, 2004, the date of the grant, and
    the rest vest ratably over a two year period.                                                                                                                                                                                   
|   
|(e) |  | Mr. Tanners option vested and became exercisable
    immediately upon the granting of such option on August 30,
    2004.                                                                                                                                                                                                                                

52



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##### 





Aggregated Option/ SAR Exercises in Last Fiscal


Year and Fiscal Year End Options/ SAR Values


|                  |  |              |        |  |              |                        |                          |             |                         |                          |               |  |  |             |         |  |               |   |           |  |  |   |        | 
|----------------- |  | ------------ | ------ |  | ------------ | ---------------------- | ------------------------ | ----------- | ----------------------- | ------------------------ | ------------- |  |  | ----------- | ------- |  | ------------- | - | --------- |  |  | - | ------ | 
|                  |  |              |        |  |              | Number of Securities   |                          |             |                        
|                  |  |              |        |  |              | Underlying Unexercised |                          |             | Value of Unexercised    |                         
|                  |  |              |        |  |              | Options/SARs at        |                          |             | In-the-Money Options at |                         
|                  |  | Shares       |        |  |              |                        | Fiscal Year End 2004 (#) |             |                         | Fiscal Year End 2004 ($) |              
|                  |  | Acquired on  |        |  | Value        |                        |                          |             |                         |                          |               | 
|Name              |  | Exercise (#) |        |  | Realized ($) |                        |                          | Exercisable |                         |                          | Unexercisable |  |  | Exercisable |         |  | Unexercisable |  
|                  |  |              |        |  |              |                        |                          |             |                         |                          |               |  |  |             |         |  |               |  
|Raúl Alarcón, Jr. |  |              |       |  |              |                        |                         |             |                         |                          | 600,000       |  |  |             |        |  |               | $ | 1,076,130 |  |  | $ |       | 
|Joseph A. García  |  |              |       |  |              |                        |                         |             |                         |                          | 450,000       |  |  |             | 100,000 |  |               |   | 706,100   |  |  |   | 87,600 | 
|Marko Radlovic    |  |              |       |  |              |                        |                         |             |                         |                          | 89,930        |  |  |             | 97,570  |  |               |   | 108,888   |  |  |   | 69,762 | 
|William B. Tanner |  |              | 10,000 |  |              | $                      | 40,300                   |             |                         |                          | 268,552       |  |  |             |        |  |               |   | 230,139   |  |  |   |       | 

Director Compensation














53



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##### 









Employment Agreements and Arrangements




| |                  
| | -----------------
| | Raúl Alarcón, Jr.





| |                 
| | ----------------
| | Joseph A. García



54



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##### 





| |                  
| | -----------------
| | William B. Tanner





| |               
| | --------------
| | Marko Radlovic



Stock Plans




| |                       
| | ----------------------
| | 1999 Stock Option Plan





55



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##### 











| |                                        
| | ---------------------------------------
| | Non-Employee Director Stock Option Plan





401(k) Plan




Limitations on Directors and Officers
Liability




56



---



##### 

















57



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##### 





Compensation Committee Interlocks and Insider
Participation











|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters





| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | each person known by us to beneficially own more than 5% of any
    class of common stock;
|
| |  | each director and each executive officer named in the Summary
    Compensation Table; and 
|
| |  | all named executive officers and directors as a group.                                    



|                                                         |  |                |            |         |                |  |      |           |         |         |            |          |  |          |       |   |        |  |      |   |  |  |      |  
|-------------------------------------------------------- |  | -------------- | ---------- | ------- | -------------- |  | ---- | --------- | ------- | ------- | ---------- | -------- |  | -------- | ----- | - | ------ |  | ---- | - |  |  | ---- | -
|                                                         |  | Class A Shares |            |         | Class B Shares |  |      |           |         |        
|                                                         |  |                |            |         |                |  |      |           |         | Percent |           
|                                                         |  |                |            | Percent |                |  |      |           | Percent |         |            | Percent  |  |          | of    |  
|                                                         |  |                |            | of      |                |  |      |           | of      |         |            | of Total |  |          | Total |  
|                                                         |  | Number of      |            |         | Class A        |  |      | Number of |         |         | Class B    |          |  | Economic |       |   | Voting | 
|Name and Address(1)(2)                                   |  | Shares         |            |         | Shares         |  |      | Shares    |         |         | Shares     |          |  | Interest |       |   | Power  | 
|                                                         |  |                |            |         |                |  |      |           |         |         |            |          |  |          |       |   |        | 
|Raúl Alarcón, Jr.(3)                                     |  |                | 600,000    |         |                |  | 1.2  | %         |         |         | 23,500,000 |          |  |          | 95.6  | % |        |  | 33.0 | % |  |  | 80.1 | %
|Pablo Raúl Alarcón, Sr.                                  |  |                |           |         |                |  |     |           |         |         | 1,070,000  |          |  |          | 4.4   | % |        |  | 1.5  | % |  |  | 3.6  | %
|Joseph A. García(4)                                      |  |                | 512,500    |         |                |  | 1.1  | %         |         |         |           |          |  |          |      |   |        |  | *    |   |  |  | *    |  
|Marko Radlovic(3)                                        |  |                | 95,030     |         |                |  | *    |           |         |         |           |          |  |          |      |   |        |  | *    |   |  |  | *    |  
|William B. Tanner(3)                                     |  |                | 268,552    |         |                |  | *    |           |         |         |           |          |  |          |      |   |        |  | *    |   |  |  | *    |  
|Dan Mason(3)                                             |  |                | 20,000     |         |                |  | *    |           |         |         |           |          |  |          |      |   |        |  | *    |   |  |  | *    |  
|Antonio S. Fernandez(3)                                  |  |                | 10,000     |         |                |  | *    |           |         |         |           |          |  |          |      |   |        |  | *    |   |  |  | *    |  
|Jose A. Villamil(3)                                      |  |                | 10,000     |         |                |  | *    |           |         |         |           |          |  |          |      |   |        |  | *    |   |  |  | *    |  
|Jason L. Shrinsky(5)                                     |  |                | 75,000     |         |                |  | *    |           |         |         |           |          |  |          |      |   |        |  | *    |   |  |  | *    |  
|                                                         |  |                |            |         |                |  |      |           |         |         |            |          |  |          |       |   |        | 
|All named executive officers and directors as a group(6) |  |                | 1,591,082  |         |                |  | 3.0  | %         |         |         | 24,570,000 |          |  |          | 100.0 | % |        |  | 33.6 | % |  |  | 82.7 | %
|Infinity Media Corporation(7)                            |  |                | 11,400,000 |         |                |  | 22.1 | %         |         |         |           |          |  |          |      |   |        |  | 15.0 | % |  |  | 3.8  | %
|T. Rowe Price Associates, Inc.(8)                        |  |                | 5,204,550  |         |                |  | 10.9 | %         |         |         |           |          |  |          |      |   |        |  | 7.2  | % |  |  | 1.8  | %
|Columbia Wagner Asset Management, L.P.(9)                |  |                | 3,055,500  |         |                |  | 6.4  | %         |         |         |           |          |  |          |      |   |        |  | 4.2  | % |  |  | 1.0  | %






| |   |                        
| | - | -----------------------
| | * | Indicates less than 1%.



|    |                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The address of all directors and executive officers in this
    table, unless otherwise specified, is c/o Spanish
    Broadcasting System, Inc., 2601 South Bayshore Drive,
    PH II, Coconut Grove, Florida 33133.                                                                                                                                  
|   
|(2) | As used in this table, beneficial ownership means
    the sole or shared power to vote or direct the voting of a
    security, or the sole or shared power to dispose, or direct the
    disposition, of a security. A person is deemed as of any date to
    have beneficial ownership of any security that the person has
    the right to acquire

58



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##### 



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | within 60 days after that date. For purposes of computing
    the percentage of outstanding shares held by each person named
    above, any security that the person has the right to acquire
    within 60 days of the date of calculation is deemed to be
    outstanding, but is not deemed to be outstanding for purposes of
    computing the percentage ownership of any other person.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(3) | Shares of Class A common stock issuable upon the exercise
    of options that the holder has the right to exercise within
    sixty days of the date of this table.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(4) | Includes 502,500 shares of Class A common stock
    issuable upon the exercise of options that the holder has the
    right to exercise within sixty days of the date of this report.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(5) | Includes 60,000 shares of Class A common stock
    issuable upon the exercise of options that the holder has the
    right to exercise within sixty days of the date of this report.
    Mr. Shrinsky holds these options for the benefit of his law
    firm, Kaye Scholer LLP. Mr. Shrinsky shares ownership of,
    and voting and investment power for, 15,000 shares of
    Class A common stock with his spouse.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(6) | Includes 1,566,082 shares of Class A common stock
    issuable upon the exercise of options that the holders have the
    right to exercise within sixty days of the date of this table.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(7) | Reflects ownership of Infinity Media Corporation
    (IMC), Infinity Broadcasting Corporation
    (IBC), Viacom Inc. (Viacom), NAIRI, Inc.
    (NAIRI) and National Amusements, Inc.
    (NAI and, together with IMC, IBC, Viacom and NAIRI,
    the Infinity Entities) of 380,000 shares of our
    Series C preferred stock and a warrant (the
    Warrant) to purchase 190,000 additional shares
    of Series C preferred stock. Upon conversion, each of the
    shares of Series C preferred stock will convert into twenty
    fully paid and non- assessable shares of Class A common
    stock. Accordingly, the Series C preferred stock
    beneficially owned by the Infinity Entities and the
    Series C preferred stock issuable upon exercise of the
    Warrant are convertible into 11,400,000 shares of
    Class A common stock. Mr. Sumner M. Redstone, by
    virtue of his stock ownership in NAI, may be deemed to be the
    beneficial owner, with shared dispositive and voting power, of
    the Series C preferred stock held or controlled by the
    Infinity Entities. The address of the Infinity Entities and
    Mr. Redstone is c/o Infinity Media Corporation, 1515
    Broadway, New York, New York 10036. We obtained this information
    from a Schedule 13D filed by Viacom, Inc. on
    December 27, 2004.
|   
|(8) | The address of T. Rowe Price Associates, Inc. is 100 East Pratt
    Street, Baltimore, Maryland 21202. T. Rowe Price
    Associates, Inc. has sole voting power with respect to
    1,253,350 shares and sole dispositive power with respect to
    all the shares. The shares are owned by various individual and
    institutional investors, including T. Rowe Price New Horizons
    Fund, Inc. for which T. Rowe Price Associates, Inc. serves as an
    investment advisor. T. Rowe Price Associates, Inc. disclaims
    beneficial ownership of these shares. We obtained this
    information from a Schedule 13G filed by T. Rowe Price
    Associates, Inc. on February 14, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(9) | The address of Columbia Wagner Asset Management, L.P. is
    227 W. Monroe Ste. 3000, Chicago, Illinois 60606.
    Columbia Wagner Asset Management, L.P. has sole investment
    discretion and voting power with respect to all the shares. The
    shares are owned by various individual and institutional
    investors for which Columbia Wagner Asset Management, L.P.
    serves as an investment advisor. We obtained this information
    from a Schedule 13G filed by Columbia Wagner Asset
    Management, L.P. on February 14, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

59



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Equity Compensation Plan Information




Equity Compensation Plan Information


As of December 31, 2004


|                                                       |                                               |                   |       |           |                   |           |     |                         |   |     |  |         |   |         |  |  | 
|------------------------------------------------------ | --------------------------------------------- | ----------------- | ----- | --------- | ----------------- | --------- | --- | ----------------------- | - | --- |  | ------- | - | ------- |  |  | 
|                                                       |                                               | (a)               |       |           |                   |           |     |                         |  
|                                                       |                                               | Number of Shares  |       |           |                   |           | (c) |                         |   |    
|                                                       |                                               | to be Issued Upon |       |           | (b)               |           |     | Number of Securities    |   |     | 
|                                                       |                                               | Exercise of       |       |           | Weighted-Average  |           |     | Remaining Available for |   |     | 
|                                                       |                                               | Outstanding       |       |           | Exercise Price of |           |     | Future Issuance Under   |   |     | 
|                                                       |                                               | Options,          |       |           | Outstanding       |           |     | Equity Compensation     |   |     | 
|                                                       |                                               | Warrants and      |       |           | Options, Warrants |           |     | Plans (excluding        |   |     | 
|Plan Category                                          |                                               | Rights            |       |           | and Rights        |           |     | Column (a))             |   |     | 
|                                                       |                                               |                   |       |           |                   |           |     |                         |   |     | 
|Equity Compensation Plans Approved by Stockholders     |                                               |                   |       |           |                   |           |     |                         |   |     |  |         |   |        
|                                                       | 1999 Stock Option Plan                        |                   |       | 2,558,252 |                   |           | $   | 11.57                   |   |     |  | 348,648 |   |         | 
|                                                       | Non-Employee Director Stock Option Plan       |                   |       | 200,000   |                   |           |     | 11.18                   |   |     |  | 70,000  |   |         | 
|Equity Compensation Plans Not Approved by Stockholders |                                               |                   |       |           |                   |           |     |                         |   |     |  |         |   |        
|                                                       | Options issued to a former director(a)        |                   |       | 250,000   |                   |           |     | 20.00                   |   |     |  |        |   |         | 
|                                                       | Warrants related to acquisition of KXOL-FM(b) |                   |       | 2,700,000 |                   |           |     | 9.77                    |   |     |  |         |   |         | 
|                                                       |                                               | KRZZ-FM(c)        |       |           | 3,800,000         |           |     |                         |  | (c) |  |         |  |         |  | 
|                                                       |                                               |                   |       |           |                   |           |     |                         |   |     | 
|                                                       |                                               |                   | Total |           |                   | 9,508,252 |     |                         |   |     |  |         |   | 418,648 |  |  | 
|                                                       |                                               |                   |       |           |                   |           |     |                         |   |     | 






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | We granted Arnold Sheiffer, who served as a director of SBS from
    1996 until August 1999, stock options to
    purchase 250,000 shares of Class A common stock
    upon the closing of our initial public offering, for his past
    services as a director.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(b) |  | On October 30, 2003, we completed the acquisition of the
    assets of radio station KXOL-FM serving the Los Angeles,
    California market, from ICFG for a cash purchase price of
    $250.0 million plus the issuance to ICFG on
    February 8, 2002 of a warrant exercisable for an aggregate
    of 2,000,000 shares of our Class A common stock. This
    warrant was exercisable for a period of thirty-six months from
    the date of issuance and as of February 8, 2005, the
    warrant expired. Pursuant to the amended asset purchase
    agreement and amended time brokerage agreements relating to the
    acquisition of KXOL-FM, we issued to ICFG seven additional
    warrants, each exercisable for 100,000 shares (an aggregate
    of 700,000 shares) of our Class A common stock. These
    warrants are exercisable for a period of thirty-six months after
    the date of issuance after which they will expire if not
    exercised. To date, none of these warrants issued to ICFG have
    been exercised.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(c) |  | On December 23, 2004, in connection with the closing of the
    merger agreement, dated October 5, 2004, with Infinity,
    Infinity SF and SBS Bay Area, we issued to Infinity (i) an
    aggregate of 380,000 shares of our Series C preferred
    stock, which are convertible at the option of the holder into
    twenty fully paid and non-assessable shares each of our
    Class A common stock; and (ii) a warrant to purchase
    an additional 190,000 shares of our Series C preferred
    stock, at an exercise price of $300.00 per share (the
    Warrant). Upon conversion, each share of our
    Series C preferred stock held by a holder will convert into
    twenty fully paid and non-assessable shares of our Class A
    common stock. The shares of our Series C preferred stock
    issued at the closing of the merger are convertible into
    7,600,000 shares of our Class A common stock, subject
    to adjustment, and the Series C preferred stock issuable
    upon exercise of the Warrant are convertible into an additional
    3,800,000 shares of our Class A common stock, subject
    to adjustment. In connection with the closing of the merger
    transaction, we also entered into a registration rights
    agreement with Infinity, pursuant to which, following a period
    of one year (or earlier if we take certain actions), Infinity
    may instruct us to file up to three registration statements, on
    a best efforts basis, with the SEC providing for the
    registration for resale of the Class A common stock
    issuable upon conversion of the Series C preferred stock.






|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions



60



---



##### 















61



---



##### 












|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services



|                      |                         |                   |     |       |                   |   |     |     | 
|--------------------- | ----------------------- | ----------------- | --- | ----- | ----------------- | - | --- | --- | 
|                      |                         | Fiscal Year Ended |     |       | Fiscal Year Ended |  
|                      |                         | December 31, 2004 |     |       | December 31, 2003 |  
|                      |                         |                   |     |       |                   |  
|                      |                         | ($ in thousands)  |    
|Annual audit fees(1)  |                         | $                 | 997 |       |                   | $ | 473 |    
|Audit related fees(2) |                         |                   | 15  |       |                   |   | 15  |    
|Tax fees(3)           |                         |                   | 278 |       |                   |   | 279 |    
|All other fees(4)     |                         |                   | 300 |       |                   |   |    |    
|                      |                         |                   |     |       |                   |  
|                      | Total fees for services |                   | $   | 1,590 |                   |   | $   | 767 | 
|                      |                         |                   |     |       |                   |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Annual audit fees for the audit of the consolidated financial
    statements included in our annual report on Form 10-K and
    the review of the interim condensed consolidated financial
    statements included in our quarterly reports on Form 10-Q.
    This category also includes fees for statutory audits required
    by the Puerto Rico tax authorities, debt compliance letters,
    consents, review of registration statements and other documents
    filed with the SEC, and accounting consultations. In 2004, this
    includes their audit over managements assessment over the
    effectiveness of our internal control over financial reporting,
    as required by Section 404 of the Sarbanes-Oxley Act of
    2002.
|   
|(2) | Audit related fees are the fees for the financial statement
    audit of the Companys employee benefit plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(3) | Tax fees are the fees for professional services rendered for tax
    compliance, tax advice, and tax planning for our U.S. and Puerto
    Rico entities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(4) | All other fees are the fees for services other than those in the
    above three categories. This category includes fees for
    documentation assistance services related to internal controls
    over financial reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

Audit Committee Pre-Approval Policies and Procedures




62



---



##### 






PART IV







|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules

(a) 1. Financial Statements






| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | Reports of Independent Registered Public Accounting Firm                                                                                                 
|
| | Consolidated Balance Sheets as of December 31, 2003 and 2004                                                                                             
|
| | Consolidated Statements of Operations for the fiscal years ended
    December 29, 2002, December 31, 2003 and
    December 31, 2004.                     
|
| | Consolidated Statements of Changes in Stockholders Equity
    for the fiscal years ended December 29, 2002,
    December 31, 2003 and December 31, 2004.
|
| | Consolidated Statements of Cash Flows for the fiscal years ended
    December 29, 2002, December 31, 2003 and
    December 31, 2004.                     
|
| | Notes to Consolidated Financial Statements                                                                                                               

2. Financial Statement Schedule






F-1



---



##### 



SPANISH BROADCASTING SYSTEM, INC.


AND SUBSIDIARIES


Index to Consolidated Financial Statements


|                                                                                                                                                             |  |      |      | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ---- | 
|                                                                                                                                                             |  | Page |     
|                                                                                                                                                             |  |      |     
|Reports of Independent Registered Public
    Accounting Firm                                                                                                 |  |      | F-3  | 
|                                                                                                                                                            
|Consolidated Balance Sheets as of
    December 31, 2003 and 2004.                                                                                            |  |      | F-5  | 
|                                                                                                                                                            
|Consolidated Statements of Operations for the fiscal years ended
    December 29, 2002, December 31, 2003 and
    December 31, 2004                          |  |      | F-6  | 
|                                                                                                                                                            
|Consolidated Statements of Changes in
    Stockholders Equity for the fiscal years ended
    December 29, 2002, December 31, 2003 and
    December 31, 2004 |  |      | F-7  | 
|                                                                                                                                                            
|Consolidated Statements of Cash Flows for
    the fiscal years ended December 29, 2002, December 31,
    2003 and December 31, 2004                          |  |      | F-8  | 
|                                                                                                                                                            
|Notes to Consolidated Financial
    Statements                                                                                                               |  |      | F-10 | 
|                                                                                                                                                            
|Financial Statement Schedule 
    Valuation and Qualifying Accounts                                                                                         |  |      | F-43 | 

F-2



---



##### 






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM






Internal Control 
Integrated Framework








Internal Control  Integrated Framework Internal Control  Integrated Framework






| |             
| | ------------
| | /s/ KPMG LLP





F-3



---



##### 






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM














Internal Control  Integrated Framework




| |             
| | ------------
| | /s/ KPMG LLP





F-4



---



##### 






SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


December 31, 2003 and December 31, 2004


|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |         |           |          |        |         | 
|------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------ | -------------------------- | -------- | ------------ | ------- | --------- | -------- | ------ | ------- | 
|                                                                                                                    |                                                                                                                                                                                                                                                                    | December 31,                         |                            |          | December 31, |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    | 2003                                 |                            |          | 2004         |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    | (In thousands,                       |                           
|                                                                                                                    |                                                                                                                                                                                                                                                                    | except share data)                   |                           
|Assets                                                                                                             
|Current assets:                                                                                                     |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |         |           |         
|                                                                                                                    | Cash and cash equivalents                                                                                                                                                                                                                                          |                                      | $                          | 45,609   |              |         |           | 132,032  |       
|                                                                                                                    | Receivables:                                                                                                                                                                                                                                                       |                                      |                            |          |              |         |           |          |       
|                                                                                                                    |                                                                                                                                                                                                                                                                    | Trade                                |                            |          | 28,325       |         |           |          | 35,649 |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    | Barter                               |                            |          | 140          |         |           |          | 413    |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      | 28,465                     |          |              |         | 36,062    |         
|                                                                                                                    |                                                                                                                                                                                                                                                                    | Less allowance for doubtful accounts |                            |          | 2,898        |         |           |          | 3,440  |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      | Net receivables            |          |              | 25,567  |           |          |        | 32,622  | 
|                                                                                                                    | Prepaid expenses and other current assets                                                                                                                                                                                                                          |                                      |                            | 3,482    |              |         |           | 2,520    |       
|                                                                                                                    | Assets held for sale                                                                                                                                                                                                                                               |                                      |                            | 23,944   |              |         |           | 65,004   |       
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      | Total current assets       |          |              | 98,602  |           |          |        | 232,178 | 
|Property and equipment, net                                                                                         |                                                                                                                                                                                                                                                                    |                                      | 24,558                     |          |              |         | 22,178    |         
|FCC licenses                                                                                                        |                                                                                                                                                                                                                                                                    |                                      | 673,338                    |          |              |         | 710,410   |         
|Goodwill                                                                                                            |                                                                                                                                                                                                                                                                    |                                      | 32,706                     |          |              |         | 32,806    |         
|Other intangible assets, net of accumulated amortization of $5
    in 2003 and $34 in 2004                          |                                                                                                                                                                                                                                                                    |                                      | 1,169                      |          |              |         | 1,400     |         
|Deferred financing costs, net of accumulated amortization of
    $4,767 in 2003 and $6,754 in 2004                  |                                                                                                                                                                                                                                                                    |                                      | 11,461                     |          |              |         | 10,073    |         
|Other assets                                                                                                        |                                                                                                                                                                                                                                                                    |                                      | 448                        |          |              |         | 678       |         
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    | $                                    | 842,282                    |          |              |         | 1,009,723 |         
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |        
|                                                                                                                   
|Liabilities and Stockholders Equity                                                                               
|Current liabilities:                                                                                                |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |         |           |         
|                                                                                                                    | Current portion of the senior credit facilities term loan due
    2009                                                                                                                                                                                             |                                      | $                          | 1,250    |              |         |           | 123,750  |       
|                                                                                                                    | Current portion of other long-term debt                                                                                                                                                                                                                            |                                      |                            | 227      |              |         |           | 3,154    |       
|                                                                                                                    | Accounts payable and accrued expenses                                                                                                                                                                                                                              |                                      |                            | 18,822   |              |         |           | 24,225   |       
|                                                                                                                    | Accrued interest                                                                                                                                                                                                                                                   |                                      |                            | 6,370    |              |         |           | 5,428    |       
|                                                                                                                    | Deposit on the sale of station                                                                                                                                                                                                                                     |                                      |                            | 1,500    |              |         |           |         |       
|                                                                                                                    | Deferred commitment fee                                                                                                                                                                                                                                            |                                      |                            |         |              |         |           | 525      |       
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      | Total current liabilities  |          |              | 28,169  |           |          |        | 157,082 | 
|Senior credit facilities term loan due 2009                                                                         |                                                                                                                                                                                                                                                                    |                                      | 123,750                    |          |              |         |          |         
|95/8% senior
    subordinated notes, due 2009, net of unamortized discount of
    $9,754 in 2003 and $8,524 in 2004 |                                                                                                                                                                                                                                                                    |                                      | 325,246                    |          |              |         | 326,476   |         
|Other long-term debt, less current portion                                                                          |                                                                                                                                                                                                                                                                    |                                      | 3,721                      |          |              |         | 567       |         
|Deferred income taxes                                                                                               |                                                                                                                                                                                                                                                                    |                                      | 68,354                     |          |              |         | 127,055   |         
|Other long-term liabilities                                                                                         |                                                                                                                                                                                                                                                                    |                                      |                           |          |              |         | 993       |         
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      | Total liabilities          |          |              | 549,240 |           |          |        | 612,173 | 
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |        
|Commitments and contingencies (notes 13, 14, and 17)                                                                |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |         |           |         
|Cumulative exchangeable redeemable preferred stock:                                                                 |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |         |           |         
|                                                                                                                    | 103/4%
    Series B cumulative exchangeable redeemable preferred
    stock, $0.01 par value, liquidation value $1,000 per
    share. Authorized 280,000 shares, issued and outstanding
    75,000 shares in 2003, issued and outstanding
    83,054 shares in 2004 |                                      |                            | 76,366   |              |         |           | 84,914   |       
|Stockholders equity:                                                                                               |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |         |           |         
|                                                                                                                    | Series C preferred stock, $0.002 par value and
    liquidation value. Authorized 600,000 shares; issued and
    outstanding 380,000 shares                                                                                                                         |                                      |                            |         |              |         |           | 1        |       
|                                                                                                                    | Class A common stock, 0.0001 par value. Authorized
    100,000,000 shares; issued and outstanding
    37,087,355 shares in 2003, issued and outstanding
    40,197,805 shares in 2004                                                                              |                                      |                            | 3        |              |         |           | 4        |       
|                                                                                                                    | Class B common stock, 0.0001 par value. Authorized
    50,000,000 shares; issued and outstanding
    27,605,150 shares in 2003, issued and outstanding
    24,583,500 shares in 2004                                                                               |                                      |                            | 3        |              |         |           | 2        |       
|                                                                                                                    | Additional paid-in capital                                                                                                                                                                                                                                         |                                      |                            | 443,961  |              |         |           | 520,450  |       
|                                                                                                                    | Accumulated deficit                                                                                                                                                                                                                                                |                                      |                            | (227,291 | )            |         |           | (207,821 | )     
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      | Total stockholders equity |          |              | 216,676 |           |          |        | 312,636 | 
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |        
|                                                                                                                    |                                                                                                                                                                                                                                                                    | $                                    | 842,282                    |          |              |         | 1,009,723 |         
|                                                                                                                    |                                                                                                                                                                                                                                                                    |                                      |                            |          |              |        



F-5



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS


Fiscal years ended December 29, 2002, December 31,
2003 and December 31, 2004


|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |        |   |         |         |        |  
|------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | ------- | ------------ | - | ------- | ------------ | ------ | - | ------- | ------- | ------ | -
|                                                                                                       |                                                                                                                        | Fiscal Year                                                                                                                                       |         |         | Fiscal Year  |   |         | Fiscal Year  |       
|                                                                                                       |                                                                                                                        | December 29,                                                                                                                                      |         |         | December 31, |   |         | December 31, |       
|                                                                                                       |                                                                                                                        | 2002                                                                                                                                              |         |         | 2003         |   |         | 2004         |       
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       
|                                                                                                       |                                                                                                                        | (In thousands, except per share data)                                                                                                             |        
|Net revenue                                                                                            |                                                                                                                        | $                                                                                                                                                 | 135,688 |         |              |   | 135,266 |              |        |   | 156,443 |        
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       
|Operating expenses:                                                                                    |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |        |   |         |        
|                                                                                                       | Engineering and programming                                                                                            |                                                                                                                                                   |         | 23,460  |              |   |         | 23,329       |        |   |         | 30,941  |       
|                                                                                                       | Stock-based programming                                                                                                |                                                                                                                                                   |         |        |              |   |         | 2,943        |        |   |         |        |       
|                                                                                                       | Selling, general and administrative                                                                                    |                                                                                                                                                   |         | 54,319  |              |   |         | 50,045       |        |   |         | 57,261  |       
|                                                                                                       | Corporate expenses                                                                                                     |                                                                                                                                                   |         | 13,546  |              |   |         | 17,853       |        |   |         | 13,346  |       
|                                                                                                       | Depreciation and amortization                                                                                          |                                                                                                                                                   |         | 2,871   |              |   |         | 2,901        |        |   |         | 3,308   |       
|                                                                                                       | Gain on the sale of stations                                                                                           |                                                                                                                                                   |         |        |              |   |         |             |        |   |         | (5,461  | )     
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       
|                                                                                                       |                                                                                                                        | Total operating expenses                                                                                                                          |         |         | 94,196       |   |         |              | 97,071 |   |         |         | 99,395 |  
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       
|                                                                                                       |                                                                                                                        | Operating income from continuing operations                                                                                                       |         |         | 41,492       |   |         |              | 38,195 |   |         |         | 57,048 |  
|Other (expense) income:                                                                                |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |        |   |         |        
|                                                                                                       | Interest expense                                                                                                       |                                                                                                                                                   |         | (34,836 | )            |   |         | (37,123      | )      |   |         | (41,897 | )     
|                                                                                                       | Interest income                                                                                                        |                                                                                                                                                   |         | 690     |              |   |         | 501          |        |   |         | 788     |       
|                                                                                                       | Other, net                                                                                                             |                                                                                                                                                   |         | (720    | )            |   |         | 1,125        |        |   |         | 164     |       
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       
|                                                                                                       |                                                                                                                        | Income from continuing operations before income taxes,
    discontinued operations, and cumulative effect of a change in
    accounting principle |         |         | 6,626        |   |         |              | 2,698  |   |         |         | 16,103 |  
|Income tax expense                                                                                     |                                                                                                                        |                                                                                                                                                   | 53,094  |         |              |   | 11,280  |              |        |   | 16,495  |        
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       
|                                                                                                       |                                                                                                                        | Loss from continuing operations before discontinued operations
    and cumulative effect of a change in accounting principle                      |         |         | (46,468      | ) |         |              | (8,582 | ) |         |         | (392   | )
|Income (loss) on discontinued operations, net of tax                                                   |                                                                                                                        |                                                                                                                                                   | 1,910   |         |              |   | (168    | )            |        |   | 28,410  |        
|Cumulative effect of a change in accounting principle for
    intangible assets, net of tax of $30,192 |                                                                                                                        |                                                                                                                                                   | (45,288 | )       |              |   |        |              |        |   |        |        
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       
|                                                                                                       |                                                                                                                        | Net (loss) income                                                                                                                                 |         | $       | (89,846      | ) |         |              | (8,750 | ) |         |         | 28,018 |  
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       
|Dividends on preferred stock                                                                           |                                                                                                                        |                                                                                                                                                   |        |         |              |   | (1,366  | )            |        |   | (8,548  | )      
|Preferred stock beneficial conversion, value treated as a
    dividend                                 |                                                                                                                        |                                                                                                                                                   |        |         |              |   |        |              |        |   | (11,457 | )      
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       
|Net (loss) income applicable to common stockholders                                                    |                                                                                                                        | $                                                                                                                                                 | (89,846 | )       |              |   | (10,116 | )            |        |   | 8,013   |        
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       
|Basic and diluted (loss) income per common share:                                                      |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |        |   |         |        
|                                                                                                       | Net loss per common share before discontinued operations and
    cumulative effect of a change in accounting principle |                                                                                                                                                   |         | (0.72   | )            |   |         | (0.16        | )      |   |         | (0.31   | )     
|                                                                                                       | Net income per common share for discontinued operations                                                                |                                                                                                                                                   |         | 0.03    |              |   |         |             |        |   |         | 0.44    |       
|                                                                                                       | Net loss per common share attributed to a cumulative effect of a
    change in accounting principle                    |                                                                                                                                                   |         | (0.70   | )            |   |         |             |        |   |         |        |       
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       
|                                                                                                       |                                                                                                                        | Net (loss) income per common share                                                                                                                |         | $       | (1.39        | ) |         |              | (0.16  | ) |         |         | 0.13   |  
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       
|Weighted average common shares outstanding:                                                            |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |        |   |         |        
|                                                                                                       | Basic                                                                                                                  |                                                                                                                                                   |         | 64,670  |              |   |         | 64,684       |        |   |         | 64,900  |       
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       
|                                                                                                       | Diluted                                                                                                                |                                                                                                                                                   |         | 64,670  |              |   |         | 64,684       |        |   |         | 65,288  |       
|                                                                                                       |                                                                                                                        |                                                                                                                                                   |         |         |              |   |         |              |       



F-6



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS
EQUITY


Fiscal years ended December 29, 2002, December 31,
2003 and December 31, 2004


|                             |                                                                                     |                                   |         |         |              |   |   |              |  |  |            |           |  |           |   |       |       |  |            |            |   |   |             |    |   |               |         |         |   |  |          |         |   |  |         |         |  
|---------------------------- | ----------------------------------------------------------------------------------- | --------------------------------- | ------- | ------- | ------------ | - | - | ------------ |  |  | ---------- | --------- |  | --------- | - | ----- | ----- |  | ---------- | ---------- | - | - | ----------- | -- | - | ------------- | ------- | ------- | - |  | -------- | ------- | - |  | ------- | ------- | -
|                             |                                                                                     | Class C                           |         |         | Class A      |   |   | Class B      |  |  |            |           |  |           |  
|                             |                                                                                     | Preferred Stock                   |         |         | Common Stock |   |   | Common Stock |  |  |            |           |  |           |  
|                             |                                                                                     |                                   |         |         |              |   |   |              |  |  | Additional |           |  |           |   | Total |      
|                             |                                                                                     | Number                            |         |         | Par          |   |   | Number       |  |  | Par        |           |  | Number    |   |       | Par   |  |            | Paid-In    |   |   | Accumulated |    |   | Stockholders |        
|                             |                                                                                     | of Shares                         |         |         | Value        |   |   | of Shares    |  |  | Value      |           |  | of Shares |   |       | Value |  |            | Capital    |   |   | Deficit     |    |   | Equity        |        
|                             |                                                                                     |                                   |         |         |              |   |   |              |  |  |            |           |  |           |   |       |       |  |            |            |   |   |             |    |   |               |        
|                             |                                                                                     | (In thousands, except share data) |        
|Balance at December 30, 2001 |                                                                                     |                                   |        |         |              | $ |  |              |  |  | 36,862,705 |           |  | $         | 3 |       |       |  | 27,795,500 |            |   | $ | 3           |    |   |               | 435,522 |         |   |  | (127,329 | )       |   |  | 308,199 |        
|                             | Issuance of warrants as a partial payment towards a radio
    station acquisition   |                                   |         |        |              |   |   |             |  |  |            |          |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         | 8,922   |   |  |          |        |   |  |         | 8,922   |  
|                             | Issuance of Class A common stock from options exercised                             |                                   |         |        |              |   |   |             |  |  |            | 23,600    |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         | 150     |   |  |          |        |   |  |         | 150     |  
|                             | Conversion of Class B common stock to Class A common
    stock                      |                                   |         |        |              |   |   |             |  |  |            | 190,350   |  |           |   |      |       |  |            | (190,350   | ) |   |             |   |   |               |         |        |   |  |          |        |   |  |         |        |  
|                             | Net loss                                                                            |                                   |         |        |              |   |   |             |  |  |            |          |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         |        |   |  |          | (89,846 | ) |  |         | (89,846 | )
|                             |                                                                                     |                                   |         |         |              |   |   |              |  |  |            |           |  |           |   |       |       |  |            |            |   |   |             |    |   |               |        
|Balance at December 29, 2002 |                                                                                     |                                   |        |         |              | $ |  |              |  |  | 37,076,655 |           |  | $         | 3 |       |       |  | 27,605,150 |            |   | $ | 3           |    |   |               | 444,594 |         |   |  | (217,175 | )       |   |  | 227,425 |        
|                             | Issuance of warrants as a payment towards the rights to operate
    a radio station |                                   |         |        |              |   |   |             |  |  |            |          |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         | 2,943   |   |  |          |        |   |  |         | 2,943   |  
|                             | Issuance of Class A common stock from options exercised                             |                                   |         |        |              |   |   |             |  |  |            | 10,700    |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         | 70      |   |  |          |        |   |  |         | 70      |  
|                             | Issuance cost of the Series B preferred stock                                       |                                   |         |        |              |   |   |             |  |  |            |          |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         | (3,646  | ) |  |          |        |   |  |         | (3,646  | )
|                             | Series B preferred stock dividend                                                   |                                   |         |        |              |   |   |             |  |  |            |          |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         |        |   |  |          | (1,366  | ) |  |         | (1,366  | )
|                             | Net loss                                                                            |                                   |         |        |              |   |   |             |  |  |            |          |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         |        |   |  |          | (8,750  | ) |  |         | (8,750  | )
|                             |                                                                                     |                                   |         |         |              |   |   |              |  |  |            |           |  |           |   |       |       |  |            |            |   |   |             |    |   |               |        
|Balance at December 31, 2003 |                                                                                     |                                   |        |         |              | $ |  |              |  |  | 37,087,355 |           |  | $         | 3 |       |       |  | 27,605,150 |            |   | $ | 3           |    |   |               | 443,961 |         |   |  | (227,291 | )       |   |  | 216,676 |        
|                             | Issuance cost of the Series B preferred stock                                       |                                   |         |        |              |   |   |             |  |  |            |          |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         | (375    | ) |  |          |        |   |  |         | (375    | )
|                             | Issuance of Class A common stock from options exercised                             |                                   |         |        |              |   |   |             |  |  |            | 88,800    |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         | 580     |   |  |          |        |   |  |         | 580     |  
|                             | Conversion of Class B common stock to Class A common
    stock                      |                                   |         |        |              |   |   |             |  |  |            | 3,021,650 |  |           |   | 1     |       |  |            | (3,021,650 | ) |   |             | (1 | ) |               |         |        |   |  |          |        |   |  |         |        |  
|                             | Issuance of Series C preferred stock                                                |                                   |         | 380,000 |              |   | $ | 1            |  |  |            |          |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         | 76,284  |   |  |          |        |   |  |         | 76,285  |  
|                             | Series B preferred stock dividend                                                   |                                   |         |        |              |   |   |             |  |  |            |          |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         |        |   |  |          | (8,548  | ) |  |         | (8,548  | )
|                             | Dividend for beneficial conversion feature of Series C
    preferred stock          |                                   |         |        |              |   |   |             |  |  |            |          |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         | (11,457 | ) |  |          |        |   |  |         | (11,457 | )
|                             | Accretion of value of Series C preferred stock                                      |                                   |         |        |              |   |   |             |  |  |            |          |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         | 11,457  |   |  |          |        |   |  |         | 11,457  |  
|                             | Net income                                                                          |                                   |         |        |              |   |   |             |  |  |            |          |  |           |   |      |       |  |            |           |   |   |             |   |   |               |         |        |   |  |          | 28,018  |   |  |         | 28,018  |  
|                             |                                                                                     |                                   |         |         |              |   |   |              |  |  |            |           |  |           |   |       |       |  |            |            |   |   |             |    |   |               |        
|Balance at December 31, 2004 |                                                                                     |                                   | 380,000 |         |              | $ | 1 |              |  |  | 40,197,805 |           |  | $         | 4 |       |       |  | 24,583,500 |            |   | $ | 2           |    |   |               | 520,450 |         |   |  | (207,821 | )       |   |  | 312,636 |        
|                             |                                                                                     |                                   |         |         |              |   |   |              |  |  |            |           |  |           |   |       |       |  |            |            |   |   |             |    |   |               |        



F-7



---



##### 






SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


Fiscal years ended December 29, 2002, December 31,
2003 and December 31, 2004


|                                      |                                                                                                    |                                                                                 |                                                   |                                                        |              |        |        |              |        |        |          |        |         |        |        | 
|------------------------------------- | -------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------- | ------------------------------------------------- | ------------------------------------------------------ | ------------ | ------ | ------ | ------------ | ------ | ------ | -------- | ------ | ------- | ------ | ------ | 
|                                      |                                                                                                    | Fiscal Year                                                                     |                                                   |                                                        | Fiscal Year  |        |        | Fiscal Year  |       
|                                      |                                                                                                    | December 29,                                                                    |                                                   |                                                        | December 31, |        |        | December 31, |       
|                                      |                                                                                                    | 2002                                                                            |                                                   |                                                        | 2003         |        |        | 2004         |       
|                                      |                                                                                                    |                                                                                 |                                                   |                                                        |              |        |        |              |       
|                                      |                                                                                                    | (In thousands)                                                                  |                                                  
|Cash flows from operating activities: |                                                                                                    |                                                                                 |                                                   |                                                        |              |        |        |              |        |        |          |       
|                                      | Net (loss) income                                                                                  |                                                                                 | $                                                 | (89,846                                                | )            |        |        | (8,750       | )      |        |          | 28,018 |        
|                                      |                                                                                                    |                                                                                 |                                                   |                                                        |              |        |        |              |       
|                                      | Adjustments to reconcile net (loss) income to net cash provided
    by operating activities:       |                                                                                 |                                                   |                                                        |              |        |        |              |        |        |          |        |        
|                                      |                                                                                                    | (Income) loss from discontinued operations, net of tax                          |                                                   |                                                        | (1,910       | )      |        |              | 165    |        |          |        | (28,410 | )     
|                                      |                                                                                                    | Gain on sale of radio stations                                                  |                                                   |                                                        |             |        |        |              |       |        |          |        | (5,461  | )     
|                                      |                                                                                                    | Stock-based programming expense                                                 |                                                   |                                                        |             |        |        |              | 2,943  |        |          |        |        |       
|                                      |                                                                                                    | Cumulative effect of a change in accounting principle for
    intangible assets |                                                   |                                                        | 75,480       |        |        |              |       |        |          |        |        |       
|                                      |                                                                                                    | Loss (gain) on disposal of fixed assets                                         |                                                   |                                                        | 21           |        |        |              | (166   | )      |          |        | 163     |       
|                                      |                                                                                                    | Depreciation and amortization                                                   |                                                   |                                                        | 2,871        |        |        |              | 2,901  |        |          |        | 3,308   |       
|                                      |                                                                                                    | Net barter income                                                               |                                                   |                                                        | (854         | )      |        |              | (495   | )      |          |        | (753    | )     
|                                      |                                                                                                    | (Reduction of) provision for trade doubtful accounts                            |                                                   |                                                        | (40          | )      |        |              | 345    |        |          |        | 1,562   |       
|                                      |                                                                                                    | Amortization of debt discount                                                   |                                                   |                                                        | 970          |        |        |              | 1,092  |        |          |        | 1,230   |       
|                                      |                                                                                                    | Amortization of deferred financing costs                                        |                                                   |                                                        | 1,281        |        |        |              | 1,391  |        |          |        | 1,990   |       
|                                      |                                                                                                    | Increase in deferred income taxes                                               |                                                   |                                                        | 21,927       |        |        |              | 10,820 |        |          |        | 15,791  |       
|                                      |                                                                                                    | Amortization of deferred commitment fee                                         |                                                   |                                                        | (701         | )      |        |              | (581   | )      |          |        | (75     | )     
|                                      |                                                                                                    | Changes in operating assets and liabilities:                                    |                                                   |                                                        |              |        |        |              |        |        |          |        |         |       
|                                      |                                                                                                    |                                                                                 | Increase in trade receivables                     |                                                        |              | (2,626 | )      |              |        | (237   | )        |        |         | (9,105 | )     
|                                      |                                                                                                    |                                                                                 | (Increase) decrease in other current assets       |                                                        |              | (556   | )      |              |        | (1,222 | )        |        |         | 799    |       
|                                      |                                                                                                    |                                                                                 | Decrease (increase) in other assets               |                                                        |              | 55     |        |              |        | (247   | )        |        |         | (248   | )     
|                                      |                                                                                                    |                                                                                 | Increase in accounts payable and accrued expenses |                                                        |              | 2,514  |        |              |        | 3,533  |          |        |         | 3,885  |       
|                                      |                                                                                                    |                                                                                 | Increase in deferred commitment fee               |                                                        |              |       |        |              |        |       |          |        |         | 600    |       
|                                      |                                                                                                    |                                                                                 | (Decrease) increase in accrued interest           |                                                        |              | (90    | )      |              |        | 1,144  |          |        |         | (942   | )     
|                                      |                                                                                                    |                                                                                 |                                                   |                                                        |              |        |        |              |       
|                                      |                                                                                                    |                                                                                 |                                                   | Net cash provided by continuing operations             |              |        | 8,496  |              |        |        | 12,636   |        |         |        | 12,352 | 
|                                      |                                                                                                    |                                                                                 |                                                   | Net cash provided by discontinued operations           |              |        | 2,170  |              |        |        | 590      |        |         |        | 487    | 
|                                      |                                                                                                    |                                                                                 |                                                   |                                                        |              |        |        |              |       
|                                      |                                                                                                    |                                                                                 |                                                   | Net cash provided by operating activities              |              |        | 10,666 |              |        |        | 13,226   |        |         |        | 12,839 | 
|                                      |                                                                                                    |                                                                                 |                                                   |                                                        |              |        |        |              |       
|Cash flows from investing activities: |                                                                                                    |                                                                                 |                                                   |                                                        |              |        |        |              |        |        |          |       
|                                      | Proceeds from sale of radio stations, net of disposal costs of
    $446 in 2002 and $1,166 in 2004 |                                                                                 |                                                   | 34,534                                                 |              |        |        |             |        |        |          | 79,734 |        
|                                      | Deposit on sale of station                                                                         |                                                                                 |                                                   |                                                       |              |        |        | 1,500        |        |        |          |       |        
|                                      | Proceeds from sale of assets                                                                       |                                                                                 |                                                   |                                                       |              |        |        | 655          |        |        |          |       |        
|                                      | Additions to property and equipment                                                                |                                                                                 |                                                   | (3,828                                                 | )            |        |        | (3,216       | )      |        |          | (2,998 | )      
|                                      | Additions to property and equipment of discontinued operations                                     |                                                                                 |                                                   | (166                                                   | )            |        |        | (149         | )      |        |          |       |        
|                                      | Acquisition of radio stations                                                                      |                                                                                 |                                                   |                                                       |              |        |        | (229,960     | )      |        |          |       |        
|                                      | Acquisition costs of radio stations                                                                |                                                                                 |                                                   |                                                       |              |        |        |             |        |        |          | (1,278 | )      
|                                      | Advances on purchase price of radio stations                                                       |                                                                                 |                                                   | (21,275                                                | )            |        |        |             |        |        |          |       |        
|                                      |                                                                                                    |                                                                                 |                                                   |                                                        |              |        |        |              |       
|                                      |                                                                                                    |                                                                                 |                                                   | Net cash provided by (used in) by investing activities |              |        | 9,265  |              |        |        | (231,170 | )      |         |        | 75,458 | 
|                                      |                                                                                                    |                                                                                 |                                                   |                                                        |              |        |        |              |       

F-8



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF CASH FLOWS


Fiscal years ended December 29, 2002, December 31,
2003 and December 31, 2004


|                                               |                                                                                                                                            |                                                                           |                                                      |        |              |        |        |              |       |         |         |        |        |        |  
|---------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------- | ---------------------------------------------------- | ------ | ------------ | ------ | ------ | ------------ | ----- | ------- | ------- | ------ | ------ | ------ | -
|                                               |                                                                                                                                            | Fiscal Year                                                               |                                                      |        | Fiscal Year  |        |        | Fiscal Year  |      
|                                               |                                                                                                                                            | December 29,                                                              |                                                      |        | December 31, |        |        | December 31, |      
|                                               |                                                                                                                                            | 2002                                                                      |                                                      |        | 2003         |        |        | 2004         |      
|                                               |                                                                                                                                            |                                                                           |                                                      |        |              |        |        |              |      
|                                               |                                                                                                                                            | (In thousands)                                                            |                                                     
|Cash flows from financing activities:          |                                                                                                                                            |                                                                           |                                                      |        |              |        |        |              |       |         |         |       
|                                               | Proceeds from Series B cumulative exchangeable redeemable
    preferred stock, net of issuance cost of $3,646 in 2003 and $375
    in 2004 |                                                                           |                                                      |       |              |        |        | 71,354       |       |         |         | (375   | )     
|                                               | Proceeds from Class A stock options exercised                                                                                              |                                                                           |                                                      | 150    |              |        |        | 70           |       |         |         | 580    |       
|                                               | Repayments of other long-term debt                                                                                                         |                                                                           |                                                      | (291   | )            |        |        | (208         | )     |         |         | (227   | )     
|                                               | Proceeds from senior credit facilities                                                                                                     |                                                                           |                                                      |       |              |        |        | 125,000      |       |         |         |       |       
|                                               | Repayment of senior credit facilities                                                                                                      |                                                                           |                                                      |       |              |        |        |             |       |         |         | (1,250 | )     
|                                               | Increase in deferred financing costs                                                                                                       |                                                                           |                                                      |       |              |        |        | (4,093       | )     |         |         | (602   | )     
|                                               |                                                                                                                                            |                                                                           |                                                      |        |              |        |        |              |      
|                                               |                                                                                                                                            |                                                                           | Net cash (used in) provided by financing activities  |        |              | (141   | )      |              |       | 192,123 |         |        |        | (1,874 | )
|                                               |                                                                                                                                            |                                                                           |                                                      |        |              |        |        |              |      
|                                               |                                                                                                                                            |                                                                           | Net increase (decrease) in cash and cash equivalents |        |              | 19,790 |        |              |       | (25,821 | )       |        |        | 86,423 |  
|Cash and cash equivalents at beginning of year |                                                                                                                                            |                                                                           | 51,640                                               |        |              |        | 71,430 |              |       |         | 45,609  |       
|                                               |                                                                                                                                            |                                                                           |                                                      |        |              |        |        |              |      
|Cash and cash equivalents at end of year       |                                                                                                                                            | $                                                                         | 71,430                                               |        |              |        | 45,609 |              |       |         | 132,032 |       
|                                               |                                                                                                                                            |                                                                           |                                                      |        |              |        |        |              |      
|Supplemental cash flows information:           |                                                                                                                                            |                                                                           |                                                      |        |              |        |        |              |       |         |         |       
|                                               | Interest paid during the year                                                                                                              |                                                                           | $                                                    | 32,663 |              |        |        | 32,857       |       |         |         | 39,619 |       
|                                               |                                                                                                                                            |                                                                           |                                                      |        |              |        |        |              |      
|                                               | Net income taxes (received) paid during the year                                                                                           |                                                                           | $                                                    | (13    | )            |        |        | 191          |       |         |         | 337    |       
|                                               |                                                                                                                                            |                                                                           |                                                      |        |              |        |        |              |      
|                                               | Noncash investing and financing activities:                                                                                                |                                                                           |                                                      |        |              |        |        |              |       |         |         |        |       
|                                               |                                                                                                                                            | Issuance of Series C Preferred Stock for acquisition of
    radio station |                                                      | $      |             |        |        |              |      |         |         |        | 64,923 |       
|                                               |                                                                                                                                            |                                                                           |                                                      |        |              |        |        |              |      
|                                               |                                                                                                                                            | Issuance of warrants towards the acquisition of a of a radio
    station  |                                                      | $      | 8,922        |        |        |              |      |         |         |        | 11,362 |       
|                                               |                                                                                                                                            |                                                                           |                                                      |        |              |        |        |              |      
|                                               |                                                                                                                                            | Accrual of preferred stock as payment of preferred stock dividend         |                                                      | $      |             |        |        |              | 1,366 |         |         |        | 1,860  |       
|                                               |                                                                                                                                            |                                                                           |                                                      |        |              |        |        |              |      



F-9



---



##### 






SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|    |                                    
|--- | -----------------------------------
|(1) | Organization and Nature of Business









|    |                                                                   
|--- | ------------------------------------------------------------------
|(2) | Summary of Significant Accounting Policies and Related
    Matters



|    |                      
|--- | ---------------------
|(a) | Basis of Presentation









|    |                    
|--- | -------------------
|(b) | Revenue Recognition



F-10



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                       
|--- | ----------------------
|(c) | Property and Equipment







|    |                                            
|--- | -------------------------------------------
|(d) | Impairment or Disposal of Long-Lived Assets





|    |                                                                   
|--- | ------------------------------------------------------------------
|(e) | Indefinite-Lived Intangible Assets (FCC licenses) and
    Goodwill







F-11



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












|    |                             
|--- | ----------------------------
|(f) | Other Intangible Assets, net





|    |                         
|--- | ------------------------
|(g) | Deferred Financing Costs





|    |                    
|--- | -------------------
|(h) | Barter Transactions





F-12



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                    |  |                  |       |  |           |  |       | 
|----------------------------------- |  | ---------------- | ----- |  | --------- |  | ----- | 
|                                    |  | Impact on        |      
|                                    |  |                  |      
|                                    |  | Net              |       |  | Operating | 
|                                    |  | Revenue          |       |  | Expense   | 
|                                    |  |                  |       |  |           | 
|                                    |  | ($ in thousands) |      
|Fiscal year ended December 29, 2002 |  | $                | 6,351 |  |           |  | 6,366 | 
|                                    |  |                  |       |  |           | 



|    |                          
|--- | -------------------------
|(i) | Cash and Cash Equivalents





|    |             
|--- | ------------
|(j) | Income Taxes





|    |                  
|--- | -----------------
|(k) | Advertising Costs





|    |                        
|--- | -----------------------
|(l) | Deferred Commitment Fee





F-13



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|    |                 
|--- | ----------------
|(m) | Use of Estimates





|    |                                           
|--- | ------------------------------------------
|(n) | Concentration of Business and Credit Risks





|    |                                                         
|--- | --------------------------------------------------------
|(o) | Basic and Diluted Net (Loss) Income Per Common
    Share



F-14



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                                                             |                                                                                                                         |                                                                                                                                                                     |                                                     |        |              |         |        |              |        |         |        |         |         |       | 
|---------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ------ | ------------ | ------- | ------ | ------------ | ------ | ------- | ------ | ------- | ------- | ----- | 
|                                                                                                                             |                                                                                                                         | Fiscal Year                                                                                                                                                         |                                                     |        | Fiscal Year  |         |        | Fiscal Year  |       
|                                                                                                                             |                                                                                                                         | December 29,                                                                                                                                                        |                                                     |        | December 31, |         |        | December 31, |       
|                                                                                                                             |                                                                                                                         | 2002                                                                                                                                                                |                                                     |        | 2003         |         |        | 2004         |       
|                                                                                                                             |                                                                                                                         |                                                                                                                                                                     |                                                     |        |              |         |        |              |       
|Loss from continuing operations before discontinued operations
    and cumulative effect of a change in accounting principle |                                                                                                                         | $                                                                                                                                                                   | (46,468                                             | )      |              |         | (8,582 | )            |        |         | (392   | )      
|                                                                                                                             | Less dividends on preferred stock                                                                                       |                                                                                                                                                                     |                                                     |       |              |         |        | (1,366       | )      |         |        | (8,548  | )      
|                                                                                                                             | Less preferred stock beneficial conversion, value treated as a
    dividend                                             |                                                                                                                                                                     |                                                     |       |              |         |        |             |        |         |        | (11,457 | )      
|                                                                                                                             |                                                                                                                         |                                                                                                                                                                     |                                                     |        |              |         |        |              |       
|                                                                                                                             |                                                                                                                         | Loss applicable to common stockholders from continuing
    operations before discontinued operations, and cumulative effect
    of a change in accounting principle |                                                     |        | (46,468      | )       |        |              | (9,948 | )       |        |         | (20,397 | )    
|Discontinued operations, net of tax                                                                                          |                                                                                                                         |                                                                                                                                                                     | 1,910                                               |        |              |         | (168   | )            |        |         | 28,410 |        
|Cumulative effect of a change in accounting principle, net of tax                                                            |                                                                                                                         |                                                                                                                                                                     | (45,288                                             | )      |              |         |       |              |        |         |       |        
|                                                                                                                             |                                                                                                                         |                                                                                                                                                                     |                                                     |        |              |         |        |              |       
|                                                                                                                             |                                                                                                                         |                                                                                                                                                                     | Net (loss) income applicable to common stockholders |        | $            | (89,846 | )      |              |        | (10,116 | )      |         |         | 8,013 | 
|                                                                                                                             |                                                                                                                         |                                                                                                                                                                     |                                                     |        |              |         |        |              |       
|Weighted average common shares outstanding:                                                                                  |                                                                                                                         |                                                                                                                                                                     |                                                     |        |              |         |        |              |        |         |        |        
|                                                                                                                             | Basic                                                                                                                   |                                                                                                                                                                     |                                                     | 64,670 |              |         |        | 64,684       |        |         |        | 64,900  |        
|                                                                                                                             | Diluted                                                                                                                 |                                                                                                                                                                     |                                                     | 64,670 |              |         |        | 64,684       |        |         |        | 65,288  |        
|Basic and diluted loss (income) per common share:                                                                            |                                                                                                                         |                                                                                                                                                                     |                                                     |        |              |         |        |              |        |         |        |        
|                                                                                                                             | Net loss per common share before discontinued operations, and
    cumulative effect of a change in accounting principle |                                                                                                                                                                     |                                                     | (0.72  | )            |         |        | (0.16        | )      |         |        | (0.31   | )      
|                                                                                                                             | Net income per common share for discontinued operations                                                                 |                                                                                                                                                                     |                                                     | 0.03   |              |         |        |             |        |         |        | 0.44    |        
|                                                                                                                             | Net loss per common share for cumulative effect of a change in
    accounting principle                                 |                                                                                                                                                                     |                                                     | (0.70  | )            |         |        |             |        |         |        |        |        
|                                                                                                                             |                                                                                                                         |                                                                                                                                                                     |                                                     |        |              |         |        |              |       
|                                                                                                                             |                                                                                                                         |                                                                                                                                                                     | Net (loss) income per common share                  |        | $            | (1.39   | )      |              |        | (0.16   | )      |         |         | 0.13  | 
|                                                                                                                             |                                                                                                                         |                                                                                                                                                                     |                                                     |        |              |         |        |              |       



|    |                                    
|--- | -----------------------------------
|(p) | Fair Value of Financial Instruments





F-15



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                       |  |                   |       |  |                   |  |       |          |  |   |       |  |  |  |       | 
|---------------------------------------------------------------------- |  | ----------------- | ----- |  | ----------------- |  | ----- | -------- |  | - | ----- |  |  |  | ----- | 
|                                                                       |  | December 31, 2003 |       |  | December 31, 2004 | 
|                                                                       |  |                   |       |  |                   | 
|                                                                       |  | Gross             |       |  |                   |  | Gross |          |  |  
|                                                                       |  | Carrying          |       |  | Fair              |  |       | Carrying |  |   | Fair  | 
|                                                                       |  | Amount            |       |  | Value             |  |       | Amount   |  |   | Value | 
|                                                                       |  |                   |       |  |                   |  |       |          |  |   |       | 
|95/8% senior
    subordinated notes due 2009                           |  | $                 | 335.0 |  |                   |  | 357.6 |          |  | $ | 335.0 |  |  |  | 351.8 | 
|103/4%
    Series B cumulative exchangeable redeemable preferred stock |  | $                 | 76.4  |  |                   |  | 79.6  |          |  | $ | 84.9  |  |  |  | 94.3  | 





|    |                   
|--- | ------------------
|(q) | Stock Option Plans





|    |                 
|--- | ----------------
|(r) | Reclassification





|    |                  
|--- | -----------------
|(s) | Segment Reporting





|    |                       
|--- | ----------------------
|(t) | Other Income (Expense)





|    |             
|--- | ------------
|(3) | Acquisitions



F-16



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




3 4






F-17



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)














|    |                                                                   
|--- | ------------------------------------------------------------------
|(4) | Dispositions of Stations Classified as Discontinued
    Operations



F-18



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|    |                                                                       
|--- | ----------------------------------------------------------------------
|(5) | Dispositions of Stations Not Classified as Discontinued
    Operations









F-19



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|    |                            
|--- | ---------------------------
|(6) | Property and Equipment, Net



|                                               |  |      |         |   |      |           |         |              |  |  |            | 
|---------------------------------------------- |  | ---- | ------- | - | ---- | --------- | ------- | ------------ |  |  | ---------- | 
|                                               |  |      |         |   |      | Estimated |        
|                                               |  | 2003 |         |   | 2004 |           |         | Useful Lives | 
|                                               |  |      |         |   |      |           |         |              | 
|Land                                           |  | $    | 2,487   |   |      |           | 2,437   |              |  |  |           | 
|Building and building improvements             |  |      | 19,808  |   |      |           | 19,946  |              |  |  | 20 years   | 
|Tower and antenna systems                      |  |      | 4,487   |   |      |           | 4,361   |              |  |  | 7-15 years | 
|Studio and technical equipment                 |  |      | 8,822   |   |      |           | 7,227   |              |  |  | 10 years   | 
|Furniture and fixtures                         |  |      | 3,000   |   |      |           | 2,799   |              |  |  | 3-10 years | 
|Transmitter equipment                          |  |      | 5,977   |   |      |           | 5,415   |              |  |  | 7-10 years | 
|Leasehold improvements                         |  |      | 2,516   |   |      |           | 2,461   |              |  |  | 5-13 years | 
|Computer equipment and software                |  |      | 3,854   |   |      |           | 3,605   |              |  |  | 5 years    | 
|Other                                          |  |      | 1,462   |   |      |           | 1,628   |              |  |  | 5 years    | 
|                                               |  |      |         |   |      |           |         |              | 
|                                               |  |      | 52,413  |   |      |           | 49,879  |              |  |  |            | 
|Less accumulated depreciation and amortization |  |      | (27,855 | ) |      |           | (27,701 | )            |  |  |            | 
|                                               |  |      |         |   |      |           |         |              | 
|                                               |  | $    | 24,558  |   |      |           | 22,178  |              |  |  |            | 
|                                               |  |      |         |   |      |           |         |              | 



|    |                                      
|--- | -------------------------------------
|(7) | Accounts Payable and Accrued Expenses



|                                     |  |      |        |  |      |  |        | 
|------------------------------------ |  | ---- | ------ |  | ---- |  | ------ | 
|                                     |  | 2003 |        |  | 2004 | 
|                                     |  |      |        |  |      | 
|Accounts payable  trade             |  | $    | 1,335  |  |      |  | 2,442  | 
|Unearned barter revenue              |  |      | 690    |  |      |  | 421    | 
|Accrued compensation and commissions |  |      | 7,048  |  |      |  | 7,941  | 
|Accrued professional fees            |  |      | 3,592  |  |      |  | 2,983  | 
|Accrued music license fees           |  |      | 673    |  |      |  | 303    | 
|Accrued legal contingencies          |  |      | 3,026  |  |      |  | 3,082  | 
|Accrued taxes                        |  |      | 842    |  |      |  | 2,444  | 
|Other accrued expenses               |  |      | 1,616  |  |      |  | 4,609  | 
|                                     |  |      |        |  |      | 
|                                     |  | $    | 18,822 |  |      |  | 24,225 | 
|                                     |  |      |        |  |      | 

F-20



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                              
|--- | ---------------------------------------------
|(8) | Senior Subordinated Notes and Preferred Stock



|    |                                    
|--- | -----------------------------------
|(a) | 95/8% Senior
    Subordinated Notes

5 8


5 8








|    |                                                                                 
|--- | --------------------------------------------------------------------------------
|(b) | 103/4%
    Series A and B Cumulative Exchangeable Redeemable Preferred
    Stock

3 4


3 4 3 4


F-21



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|    |                                 
|--- | --------------------------------
|(9) | Senior Secured Credit Facilities









F-22



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                                                                                                                                                                       |  |      |          |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -------- | -
|                                                                                                                                                                                                                                       |  | 2004 |         
|                                                                                                                                                                                                                                       |  |      |         
|Revolving credit facility of $10.0 million, due 2008                                                                                                                                                                                   |  | $    |         |  
|Term loan payable due in quarterly principal repayment of .25%
    of the original outstanding amount of $125.0 million
    including variable interest based on LIBOR plus 325 basis
    points, with outstanding balance due in 2009 |  |      | 123,750  |  
|                                                                                                                                                                                                                                       |  |      |         
|                                                                                                                                                                                                                                       |  |      | 123,750  |  
|Less current portion                                                                                                                                                                                                                   |  |      | (123,750 | )
|                                                                                                                                                                                                                                       |  |      |         
|                                                                                                                                                                                                                                       |  | $    |         |  
|                                                                                                                                                                                                                                       |  |      |         



|     |                     
|---- | --------------------
|(10) | Other Long-Term Debt



|                                                                                                                                                                            |  |      |       |   |      |  |        |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ----- | - | ---- |  | ------ | -
|                                                                                                                                                                            |  | 2003 |       |   | 2004 | 
|                                                                                                                                                                            |  |      |       |   |      | 
|Obligation under capital lease with related party payable in
    monthly installments of $9,000, including interest at 6.25%,
    commencing June 1992. See notes 11 and 13 |  | $    | 703   |   |      |  | 637    |  
|Note payable due in monthly installments of $39,196, including
    interest at 9.75%, commencing August 2000, with balance due on
    June 2005                             |  |      | 3,245 |   |      |  | 3,084  |  
|                                                                                                                                                                            |  |      |       |   |      | 
|                                                                                                                                                                            |  |      | 3,948 |   |      |  | 3,721  |  
|Less current portion                                                                                                                                                        |  |      | (227  | ) |      |  | (3,154 | )
|                                                                                                                                                                            |  |      |       |   |      | 
|                                                                                                                                                                            |  | $    | 3,721 |   |      |  | 567    |  
|                                                                                                                                                                            |  |      |       |   |      | 



|                                 |            |   |       |       | 
|-------------------------------- | ---------- | - | ----- | ----- | 
|Fiscal year ending December 31,: |            |   |       |      
|                                 | 2005       |   | $     | 3,154 | 
|                                 | 2006       |   |       | 75    | 
|                                 | 2007       |   |       | 79    | 
|                                 | 2008       |   |       | 85    | 
|                                 | 2009       |   |       | 90    | 
|                                 | Thereafter |   |       | 238   | 
|                                 |            |   |      
|                                 |            | $ | 3,721 |      
|                                 |            |   |      



|     |                           
|---- | --------------------------
|(11) | Related-Party Transactions



F-23



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|     |                     
|---- | --------------------
|(12) | Stockholders Equity



|    |                         
|--- | ------------------------
|(a) | Series C Preferred Stock













|    |                           
|--- | --------------------------
|(b) | Class A and B Common Stock



F-24



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |         
|--- | --------
|(c) | Warrants



|                      |  |                     |           |  |                    |  |                  |                    |  |  |                    | 
|--------------------- |  | ------------------- | --------- |  | ------------------ |  | ---------------- | ------------------ |  |  | ------------------ | 
|                      |  | Number of Class A   |           |  |                    |  |                 
|                      |  | Common Shares       |           |  | Per Share Exercise |  |                  | Warrant Expiration | 
|Warrant Date of Issue |  | Underlying Warrants |           |  | Price              |  |                  | Date               | 
|                      |  |                     |           |  |                    |  |                  |                    | 
|February 8, 2002(1)   |  |                     | 2,000,000 |  |                    |  | $10.50           |                    |  |  | February 8, 2005   | 
|March 31, 2003        |  |                     | 100,000   |  |                    |  | $ 6.14           |                    |  |  | March 31, 2006     | 
|April 30, 2003        |  |                     | 100,000   |  |                    |  | $ 7.67           |                    |  |  | April 30, 2006     | 
|May 31, 2003          |  |                     | 100,000   |  |                    |  | $ 7.55           |                    |  |  | May 31, 2006       | 
|June 30, 2003         |  |                     | 100,000   |  |                    |  | $ 8.08           |                    |  |  | June 30, 2006      | 
|July 31, 2003         |  |                     | 100,000   |  |                    |  | $ 8.17           |                    |  |  | July 31, 2006      | 
|August 31, 2003       |  |                     | 100,000   |  |                    |  | $ 7.74           |                    |  |  | August 31, 2006    | 
|September 30, 2003    |  |                     | 100,000   |  |                    |  | $ 8.49           |                    |  |  | September 30, 2006 | 
|December 23, 2004     |  |                     | 3,800,000 |  |                    |  | (see Note 12(a)) |                    |  |  | December 23, 2008  | 
|                      |  |                     |           |  |                    |  |                  |                    | 
|                      |  |                     | 6,500,000 |  |                    |  |                  |                    |  |  |                    | 
|                      |  |                     |           |  |                    |  |                  |                    | 






|    |                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------
|(1) | Subsequent to December 31, 2004, warrants for
    2,000,000 shares of Class A common stock expired
    unexercised.
|   
|(d) | Stock Option Plans                                                                                                 





F-25



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                 |           |        |       |          |                |   |       |       | 
|-------------------------------- | --------- | ------ | ----- | -------- | -------------- | - | ----- | ----- | 
|                                 |           |        |       | Weighted |               
|                                 |           |        |       | Average  |               
|                                 |           | Shares |       |          | Exercise Price |  
|                                 |           |        |       |          |                |  
|Outstanding at December 30, 2001 |           |        | 1,995 |          |                | $ | 14.49 |      
|                                 | Granted   |        |       | 312      |                |   |       | 8.35  | 
|                                 | Exercised |        |       | (24      | )              |   |       | 6.36  | 
|                                 | Forfeited |        |       | (118     | )              |   |       | 14.48 | 
|                                 |           |        |       |          |                |  
|Outstanding at December 29, 2002 |           |        | 2,165 |          |                | $ | 13.69 |      
|                                 | Granted   |        |       | 335      |                |   |       | 8.85  | 
|                                 | Exercised |        |       | (11      | )              |   |       | 6.55  | 
|                                 | Forfeited |        |       | (138     | )              |   |       | 13.49 | 
|                                 |           |        |       |          |                |  
|Outstanding at December 31, 2003 |           |        | 2,351 |          |                | $ | 13.05 |      
|                                 | Granted   |        |       | 988      |                |   |       | 10.12 | 
|                                 | Exercised |        |       | (89      | )              |   |       | 6.53  | 
|                                 | Forfeited |        |       | (242     | )              |   |       | 12.99 | 
|                                 |           |        |       |          |                |  
|Outstanding at December 31, 2004 |           |        | 3,008 |          |                | $ | 12.28 |      
|                                 |           |        |       |          |                |  



|                         |  |             |       |             |         |  |          |          |  |   |             |          |  |          |       |  |  |   |       | 
|------------------------ |  | ----------- | ----- | ----------- | ------- |  | -------- | -------- |  | - | ----------- | -------- |  | -------- | ----- |  |  | - | ----- | 
|                         |  |             |       | Weighted    |         |  |          |          |  |   |            
|                         |  |             |       | Average     |         |  |          |          |  |   |            
|                         |  |             |       | Remaining   |         |  | Weighted |          |  |   |             | Weighted | 
|                         |  |             |       | Contractual |         |  | Average  |          |  |   |             | Average  | 
|                         |  | Number      |       |             | Life    |  |          | Exercise |  |   | Number      |          |  | Exercise |      
|Range of Exercise Prices |  | Outstanding |       |             | (Years) |  |          | Price    |  |   | Exercisable |          |  | Price    |      
|                         |  |             |       |             |         |  |          |          |  |   |             |          |  |          |      
|$ 0 - 4.99               |  |             | 100   |             |         |  | 6.9      |          |  | $ | 4.81        |          |  |          | 80    |  |  | $ | 4.81  | 
|5 - 9.99                 |  |             | 1,062 |             |         |  | 8.1      |          |  |   | 8.15        |          |  |          | 702   |  |  |   | 8.01  | 
|10 - 14.99               |  |             | 219   |             |         |  | 1.7      |          |  |   | 10.00       |          |  |          | 219   |  |  |   | 10.00 | 
|15 - 19.99               |  |             | 18    |             |         |  | 8.3      |          |  |   | 15.48       |          |  |          | 17    |  |  |   | 15.48 | 
|20 - 24.99               |  |             | 952   |             |         |  | 5.8      |          |  |   | 20.02       |          |  |          | 894   |  |  |   | 20.02 | 
|                         |  |             |       |             |         |  |          |          |  |   |             |          |  |          |      
|                         |  |             | 2,351 |             |         |  | 6.5      |          |  | $ | 13.05       |          |  |          | 1,912 |  |  | $ | 13.79 | 
|                         |  |             |       |             |         |  |          |          |  |   |             |          |  |          |      

F-26



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                         |  |             |       |             |         |  |          |          |  |   |             |          |  |          |       |  |  |   |       | 
|------------------------ |  | ----------- | ----- | ----------- | ------- |  | -------- | -------- |  | - | ----------- | -------- |  | -------- | ----- |  |  | - | ----- | 
|                         |  |             |       | Weighted    |         |  |          |          |  |   |            
|                         |  |             |       | Average     |         |  |          |          |  |   |            
|                         |  |             |       | Remaining   |         |  | Weighted |          |  |   |             | Weighted | 
|                         |  |             |       | Contractual |         |  | Average  |          |  |   |             | Average  | 
|                         |  | Number      |       |             | Life    |  |          | Exercise |  |   | Number      |          |  | Exercise |      
|Range of Exercise Prices |  | Outstanding |       |             | (Years) |  |          | Price    |  |   | Exercisable |          |  | Price    |      
|                         |  |             |       |             |         |  |          |          |  |   |             |          |  |          |      
|$ 0 - 4.99               |  |             | 100   |             |         |  | 5.9      |          |  | $ | 4.81        |          |  |          | 100   |  |  | $ | 4.81  | 
|5 - 9.99                 |  |             | 1,624 |             |         |  | 8.1      |          |  |   | 9.05        |          |  |          | 949   |  |  |   | 8.68  | 
|10 - 14.99               |  |             | 401   |             |         |  | 4.5      |          |  |   | 10.47       |          |  |          | 249   |  |  |   | 10.16 | 
|15 - 19.99               |  |             | 18    |             |         |  | 7.3      |          |  |   | 15.48       |          |  |          | 18    |  |  |   | 15.48 | 
|20 - 24.99               |  |             | 865   |             |         |  | 4.5      |          |  |   | 20.00       |          |  |          | 865   |  |  |   | 20.00 | 
|                         |  |             |       |             |         |  |          |          |  |   |             |          |  |          |      
|                         |  |             | 3,008 |             |         |  | 6.5      |          |  | $ | 12.28       |          |  |          | 2,181 |  |  | $ | 13.22 | 
|                         |  |             |       |             |         |  |          |          |  |   |             |          |  |          |      



|                        |  |              |         |   |              |  |         |              |  |  |         |  
|----------------------- |  | ------------ | ------- | - | ------------ |  | ------- | ------------ |  |  | ------- | -
|                        |  | December 29, |         |   | December 31, |  |         | December 31, | 
|                        |  | 2002         |         |   | 2003         |  |         | 2004         | 
|                        |  |              |         |   |              |  |         |              | 
|Expected life           |  |              | 7 years |   |              |  | 7 years |              |  |  | 7 years |  
|Dividends               |  |              | None    |   |              |  | None    |              |  |  | None    |  
|Risk-free interest rate |  |              | 3.36    | % |              |  | 3.63    | %            |  |  | 3.56    | %
|Expected volatility     |  |              | 88      | % |              |  | 81      | %            |  |  | 77      | %



|                                                             |                                                                                                                                    |              |         |         |              |  |         |              |   |  |       |        |  
|------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------- | ------------ | ------- | ------- | ------------ |  | ------- | ------------ | - |  | ----- | ------ | -
|                                                             |                                                                                                                                    | Fiscal Year  |         |         | Fiscal Year  |  |         | Fiscal Year  |  
|                                                             |                                                                                                                                    | December 29, |         |         | December 31, |  |         | December 31, |  
|                                                             |                                                                                                                                    | 2002         |         |         | 2003         |  |         | 2004         |  
|                                                             |                                                                                                                                    |              |         |         |              |  |         |              |  
|Net (loss) income applicable to common stockholders:         |                                                                                                                                    |              |         |         |              |  |         |              |   |  |       |       
|                                                             | As reported                                                                                                                        |              | $       | (89,846 | )            |  |         | (10,116      | ) |  |       | 8,013  |  
|                                                             | Deduct total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    tax |              |         | (5,384  | )            |  |         | (5,069       | ) |  |       | (5,379 | )
|                                                             |                                                                                                                                    |              |         |         |              |  |         |              |  
|Proforma net (loss) income applicable to common stockholders |                                                                                                                                    | $            | (95,230 | )       |              |  | (15,185 | )            |   |  | 2,634 |       
|                                                             |                                                                                                                                    |              |         |         |              |  |         |              |  
|Basic and diluted net (loss) income per common share:        |                                                                                                                                    |              |         |         |              |  |         |              |   |  |       |       
|                                                             | As reported                                                                                                                        |              | $       | (1.39   | )            |  |         | (0.16        | ) |  |       | 0.13   |  
|                                                             |                                                                                                                                    |              |         |         |              |  |         |              |  
|                                                             | Pro forma                                                                                                                          |              | $       | (1.47   | )            |  |         | (0.23        | ) |  |       | 0.04   |  
|                                                             |                                                                                                                                    |              |         |         |              |  |         |              |  

F-27



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |            
|---- | -----------
|(13) | Commitments



|    |       
|--- | ------
|(a) | Leases



|                              |  |      |       |   |      |  |       |  
|----------------------------- |  | ---- | ----- | - | ---- |  | ----- | -
|                              |  | 2003 |       |   | 2004 | 
|                              |  |      |       |   |      | 
|Building under capital lease  |  | $    | 1,230 |   |      |  | 1,230 |  
|Less accumulated depreciation |  |      | (713  | ) |      |  | (774  | )
|                              |  |      |       |   |      | 
|                              |  | $    | 517   |   |      |  | 456   |  
|                              |  |      |       |   |      | 





|                                 |            |                                         |      |     |           |  |  |        |        | 
|-------------------------------- | ---------- | --------------------------------------- | ---- | --- | --------- |  |  | ------ | ------ | 
|                                 |            | Capital                                 |      |     | Operating | 
|                                 |            | Lease                                   |      |     | Lease     | 
|                                 |            |                                         |      |     |           | 
|Fiscal year ending December 31,: |            |                                         |      |     |           |  |  |       
|                                 | 2005       |                                         | $    | 149 |           |  |  | 2,992  |       
|                                 | 2006       |                                         |      | 149 |           |  |  | 2,929  |       
|                                 | 2007       |                                         |      | 149 |           |  |  | 2,736  |       
|                                 | 2008       |                                         |      | 149 |           |  |  | 2,533  |       
|                                 | 2009       |                                         |      | 149 |           |  |  | 2,246  |       
|                                 | Thereafter |                                         |      | 360 |           |  |  | 13,416 |       
|                                 |            |                                         |      |     |           | 
|                                 |            | Total minimum lease payments            |      | $   | 1,105     |  |  | $      | 26,852 | 
|                                 |            |                                         |      |     |           | 
|Less executory costs             |            |                                         | (304 | )   |           |  |  |       
|                                 |            |                                         |      |     |           | 
|                                 |            |                                         | 801  |     |           |  |  |       
|Less interest at 6.25%           |            |                                         | (164 | )   |           |  |  |       
|                                 |            |                                         |      |     |           | 
|                                 |            | Present value of minimum lease payments |      | $   | 637       |  |  |        |        | 
|                                 |            |                                         |      |     |           | 





|                                 |      |   |     |     | 
|-------------------------------- | ---- | - | --- | --- | 
|Fiscal year ending December 31,: |      |   |     |    
|                                 | 2005 |   | $   | 352 | 
|                                 | 2006 |   |     | 53  | 
|                                 |      |   |    
|                                 |      | $ | 405 |    
|                                 |      |   |    

F-28



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                      
|--- | ---------------------
|(b) | Employment Agreements



|                                 |      |   |        |       | 
|-------------------------------- | ---- | - | ------ | ----- | 
|Fiscal year ending December 31,: |      |   |        |      
|                                 | 2005 |   | $      | 9,082 | 
|                                 | 2006 |   |        | 4,552 | 
|                                 | 2007 |   |        | 1,619 | 
|                                 | 2008 |   |        | 637   | 
|                                 | 2009 |   |        | 38    | 
|                                 |      |   |       
|                                 |      | $ | 15,928 |      
|                                 |      |   |       







|    |                           
|--- | --------------------------
|(c) | 401(k) Profit-Sharing Plan





|     |              
|---- | -------------
|(14) | Contingencies







F-29



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)














|     |                                       
|---- | --------------------------------------
|(15) | Cumulative Effect of Accounting Change



F-30



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|                                                                                   |                                                                   |                            |         |        |              |  |         |              |         |   |       |   |       | 
|---------------------------------------------------------------------------------- | ----------------------------------------------------------------- | -------------------------- | ------- | ------ | ------------ |  | ------- | ------------ | ------- | - | ----- | - | ----- | 
|                                                                                   |                                                                   | Fiscal Year                |         |        | Fiscal Year  |  |         | Fiscal Year  |        
|                                                                                   |                                                                   | December 29,               |         |        | December 31, |  |         | December 31, |        
|                                                                                   |                                                                   | 2002                       |         |        | 2003         |  |         | 2004         |        
|                                                                                   |                                                                   |                            |         |        |              |  |         |              |        
|Reported net (loss) income applicable to common stockholders                       |                                                                   | $                          | (89,846 | )      |              |  | (10,116 | )            |         |   | 8,013 |  
|                                                                                   | Add back cumulative effect of accounting principle, net of tax(1) |                            |         | 45,288 |              |  |         |             |         |   |       |  |      
|                                                                                   | Add back income tax valuation allowance(2)                        |                            |         | 55,358 |              |  |         |             |         |   |       |  |      
|                                                                                   |                                                                   |                            |         |        |              |  |         |              |        
|                                                                                   |                                                                   | Adjusted net income (loss) |         | $      | 10,800       |  |         |              | (10,116 | ) |       |   | 8,013 | 
|                                                                                   |                                                                   |                            |         |        |              |  |         |              |        
|Basic and diluted (loss) income per share:                                         |                                                                   |                            |         |        |              |  |         |              |         |   |       |  
|Reported net (loss) income per share                                               |                                                                   | $                          | (1.39   | )      |              |  | (0.16   | )            |         |   | 0.13  |  
|Cumulative effect per share of a change in accounting principle,
    net of tax(1) |                                                                   |                            | 0.70    |        |              |  |        |              |         |   |      |  
|Income tax valuation allowance per share(2)                                        |                                                                   |                            | 0.86    |        |              |  |        |              |         |   |      |  
|                                                                                   |                                                                   |                            |         |        |              |  |         |              |        
|Adjusted net income (loss) per share                                               |                                                                   | $                          | 0.17    |        |              |  | (0.16   | )            |         |   | 0.13  |  
|                                                                                   |                                                                   |                            |         |        |              |  |         |              |        

F-31



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|    |                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As a result of the adoption of SFAS No. 142 on
    December 31, 2001, the Company incurred a non-cash
    transitional charge of $45.3 million, net of income tax
    benefit of $30.2 million, due to the cumulative effect of
    the change in accounting principle.
|   
|(2) | As a result of adopting SFAS No. 142 on
    December 31, 2001, the Company incurred a non-cash income
    tax expense of $55.4 million to establish a valuation
    allowance against deferred tax assets on the date of adoption.                                     





|     |             
|---- | ------------
|(16) | Income Taxes



|                                       |         |                                 |         |        |              |  |        |              |        |  |        |        |        | 
|-------------------------------------- | ------- | ------------------------------- | ------- | ------ | ------------ |  | ------ | ------------ | ------ |  | ------ | ------ | ------ | 
|                                       |         | Fiscal Year                     |         |        | Fiscal Year  |  |        | Fiscal Year  |       
|                                       |         | December 29,                    |         |        | December 31, |  |        | December 31, |       
|                                       |         | 2002                            |         |        | 2003         |  |        | 2004         |       
|                                       |         |                                 |         |        |              |  |        |              |       
|Current:                               |         |                                 |         |        |              |  |        |              |        |  |        |       
|                                       | Federal |                                 | $       |       |              |  |        |             |        |  |        | 154    |       
|                                       | State   |                                 |         | 250    |              |  |        | 287          |        |  |        | 375    |       
|                                       | Foreign |                                 |         | 725    |              |  |        | 173          |        |  |        | 175    |       
|                                       |         |                                 |         |        |              |  |        |              |       
|                                       |         |                                 | 975     |        |              |  | 460    |              |        |  | 704    |       
|                                       |         |                                 |         |        |              |  |        |              |       
|Deferred:                              |         |                                 |         |        |              |  |        |              |        |  |        |       
|                                       | Federal |                                 |         | 45,648 |              |  |        | 9,499        |        |  |        | 13,817 |       
|                                       | State   |                                 |         | 6,471  |              |  |        | 1,321        |        |  |        | 1,974  |       
|                                       |         |                                 |         |        |              |  |        |              |       
|                                       |         |                                 | 52,119  |        |              |  | 10,820 |              |        |  | 15,791 |       
|                                       |         |                                 |         |        |              |  |        |              |       
|                                       |         | Total for continuing operations |         |        | 53,094       |  |        |              | 11,280 |  |        |        | 16,495 | 
|Discontinued operations                |         |                                 | 4,418   |        |              |  | 769    |              |        |  | (14    | )     
|Cumulative effect of accounting change |         |                                 | (30,192 | )      |              |  |       |              |        |  |       |       
|                                       |         |                                 |         |        |              |  |        |              |       
|                                       |         | Total income tax expense        |         | $      | 27,320       |  |        |              | 12,049 |  |        |        | 16,481 | 
|                                       |         |                                 |         |        |              |  |        |              |       



F-32



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                          |                                          |                                                              |                            |        |              |        |        |         |        |         | 
|------------------------- | ---------------------------------------- | ------------------------------------------------------------ | -------------------------- | ------ | ------------ | ------ | ------ | ------- | ------ | ------- | 
|                          |                                          | December 31,                                                 |                            |        | December 31, |       
|                          |                                          | 2003                                                         |                            |        | 2004         |       
|                          |                                          |                                                              |                            |        |              |       
|Deferred tax assets:      |                                          |                                                              |                            |        |              |        |        |        
|                          | Net operating loss carryforwards         |                                                              | $                          | 59,741 |              |        |        | 52,176  |       
|                          | Foreign net operating loss carryforwards |                                                              |                            | 7,654  |              |        |        | 8,453   |       
|                          | Allowance for doubtful accounts          |                                                              |                            | 1,915  |              |        |        | 2,982   |       
|                          | Unearned revenue                         |                                                              |                            | 276    |              |        |        | 168     |       
|                          | AMT credit                               |                                                              |                            | 1,015  |              |        |        | 1,181   |       
|                          | Fixed assets                             |                                                              |                            |       |              |        |        | 667     |       
|                          | Stock-based programming expense          |                                                              |                            | 1,177  |              |        |        | 1,177   |       
|                          | Other                                    |                                                              |                            | 2,096  |              |        |        | 2,478   |       
|                          |                                          |                                                              |                            |        |              |       
|                          |                                          |                                                              | 73,874                     |        |              |        | 69,282 |        
|                          | Less valuation allowance                 |                                                              |                            | 73,533 |              |        |        | 69,282  |       
|Deferred tax liabilities: |                                          |                                                              |                            |        |              |        |        |        
|                          | Fixed asset                              |                                                              |                            | 341    |              |        |        |        |       
|                          | Other                                    |                                                              |                            | 3,518  |              |        |        | 3,518   |       
|                          | Amortization of FCC licenses             |                                                              |                            | 66,122 |              |        |        | 127,386 |       
|                          |                                          | Less deferred tax liability included in assets held for sale |                            |        | (1,286       | )      |        |         | (3,849 | )      
|                          |                                          |                                                              |                            |        |              |       
|                          |                                          |                                                              | Net deferred tax liability |        | $            | 68,354 |        |         |        | 127,055 | 
|                          |                                          |                                                              |                            |        |              |       





|                                                      |  |              |       |   |              |  |       |              |  |  |       |  
|----------------------------------------------------- |  | ------------ | ----- | - | ------------ |  | ----- | ------------ |  |  | ----- | -
|                                                      |  | Fiscal Year  |       |   | Fiscal Year  |  |       | Fiscal Year  | 
|                                                      |  | December 29, |       |   | December 31, |  |       | December 31, | 
|                                                      |  | 2002         |       |   | 2003         |  |       | 2004         | 
|                                                      |  |              |       |   |              |  |       |              | 
|Computed expected tax expense                       |  |              | 35.0  | % |              |  | 35.0  | %            |  |  | 35.0  | %
|State income taxes, net of federal income tax benefit |  |              | 5.9   | % |              |  | 10.6  | %            |  |  | 7.5   | %
|Foreign taxes                                         |  |              | 10.9  | % |              |  | 6.3   | %            |  |  | 1.1   | %
|Change in valuation allowance                         |  |              | 744.6 | % |              |  | 339.4 | %            |  |  | 52.6  | %
|Nondeductible expenses                                |  |              | 4.0   | % |              |  | 23.4  | %            |  |  | 1.7   | %
|Other                                                 |  |              | 0.9   | % |              |  | 3.3   | %            |  |  | 4.5   | %
|                                                      |  |              |       |   |              |  |       |              | 
|                                                      |  |              | 801.3 | % |              |  | 418.0 | %            |  |  | 102.4 | %
|                                                      |  |              |       |   |              |  |       |              | 



F-33



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)














|     |           
|---- | ----------
|(17) | Litigation







F-34



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












F-35



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|     |                              
|---- | -----------------------------
|(18) | New Accounting Pronouncements





F-36



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|     |                                            
|---- | -------------------------------------------
|(19) | Quarterly Results of Operations (UNAUDITED)





|                                                                                    |                                                  |         |        |       |         |  |        |         |  |  |         |        |   |  |        |        |  
|----------------------------------------------------------------------------------- | ------------------------------------------------ | ------- | ------ | ----- | ------- |  | ------ | ------- |  |  | ------- | ------ | - |  | ------ | ------ | -
|                                                                                    |                                                  | First   |        |       | Second  |  |        | Third   |  |  | Fourth  |       
|                                                                                    |                                                  | Quarter |        |       | Quarter |  |        | Quarter |  |  | Quarter |       
|                                                                                    |                                                  |         |        |       |         |  |        |         |  |  |         |       
|Net revenue from continuing operations                                              |                                                  | $       | 27,923 |       |         |  | 36,535 |         |  |  | 35,700  |        |   |  | 35,108 |       
|(Loss) income from continuing operations before discontinued
    operations         |                                                  |         | (897   | )     |         |  | 1,000  |         |  |  | (2,174  | )      |   |  | (6,511 | )     
|Discontinued operations, net of tax                                                 |                                                  |         | 96     |       |         |  | (211   | )       |  |  | (225    | )      |   |  | 172    |       
|                                                                                    |                                                  |         |        |       |         |  |        |         |  |  |         |       
|                                                                                    | Net (loss) income                                |         | $      | (801  | )       |  |        | 789     |  |  |         | (2,399 | ) |  |        | (6,339 | )
|                                                                                    |                                                  |         |        |       |         |  |        |         |  |  |         |       
|Dividends on preferred stock                                                        |                                                  |         |       |       |         |  |       |         |  |  |        |        |   |  | (1,366 | )     
|                                                                                    |                                                  |         |        |       |         |  |        |         |  |  |         |       
|Net (loss) income applicable to common stockholders                                 |                                                  | $       | (801   | )     |         |  | 789    |         |  |  | (2,399  | )      |   |  | (7,705 | )     
|                                                                                    |                                                  |         |        |       |         |  |        |         |  |  |         |       
|Basic and diluted (loss) income per common share before
    discontinued operations |                                                  | $       | (0.01  | )     |         |  | 0.01   |         |  |  | (0.04   | )      |   |  | (0.12  | )     
|Discontinued operations per share                                                   |                                                  |         |       |       |         |  |       |         |  |  |        |        |   |  |       |       
|                                                                                    |                                                  |         |        |       |         |  |        |         |  |  |         |       
|                                                                                    | Basic and diluted (loss) income per common share |         | $      | (0.01 | )       |  |        | 0.01    |  |  |         | (0.04  | ) |  |        | (0.12  | )
|                                                                                    |                                                  |         |        |       |         |  |        |         |  |  |         |       



|                                                                            |                   |         |        |        |         |  |        |         |   |  |         |        |  |  |        |       | 
|--------------------------------------------------------------------------- | ----------------- | ------- | ------ | ------ | ------- |  | ------ | ------- | - |  | ------- | ------ |  |  | ------ | ----- | 
|                                                                            |                   | First   |        |        | Second  |  |        | Third   |   |  | Fourth  |       
|                                                                            |                   | Quarter |        |        | Quarter |  |        | Quarter |   |  | Quarter |       
|                                                                            |                   |         |        |        |         |  |        |         |   |  |         |       
|Net revenue from continuing operations                                      |                   | $       | 29,232 |        |         |  | 40,292 |         |   |  | 41,127  |        |  |  | 45,792 |      
|Income (loss) from continuing operations before discontinued
    operations |                   |         | 738    |        |         |  | (1,335 | )       |   |  | (3,233  | )      |  |  | 3,438  |      
|Discontinued operations, net of tax                                         |                   |         | 10,940 |        |         |  | (51    | )       |   |  | 17,638  |        |  |  | (117   | )    
|                                                                            |                   |         |        |        |         |  |        |         |   |  |         |       
|                                                                            | Net income (loss) |         | $      | 11,678 |         |  |        | (1,386  | ) |  |         | 14,405 |  |  |        | 3,321 | 
|                                                                            |                   |         |        |        |         |  |        |         |   |  |         |       

F-37



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                      |                                                                                     |         |        |       |         |  |        |         |   |  |         |        |   |  |         |         |  
|------------------------------------- | ----------------------------------------------------------------------------------- | ------- | ------ | ----- | ------- |  | ------ | ------- | - |  | ------- | ------ | - |  | ------- | ------- | -
|                                      |                                                                                     | First   |        |       | Second  |  |        | Third   |   |  | Fourth  |       
|                                      |                                                                                     | Quarter |        |       | Quarter |  |        | Quarter |   |  | Quarter |       
|                                      |                                                                                     |         |        |       |         |  |        |         |   |  |         |       
|Dividends on preferred stock          |                                                                                     | $       | (2,054 | )     |         |  | (2,107 | )       |   |  | (2,164  | )      |   |  | (2,223  | )      
|Preferred stock beneficial conversion |                                                                                     |         |       |       |         |  |       |         |   |  |        |        |   |  | (11,457 | )      
|                                      |                                                                                     |         |        |       |         |  |        |         |   |  |         |       
|                                      | Net income (loss) applicable to common stockholders                                 |         | $      | 9,624 |         |  |        | (3,493  | ) |  |         | 12,241 |   |  |         | (10,359 | )
|                                      |                                                                                     |         |        |       |         |  |        |         |   |  |         |       
|                                      | Basic and diluted (loss) income per common share before
    discontinued operations |         | $      | (0.02 | )       |  |        | (0.05   | ) |  |         | (0.08  | ) |  |         | (0.16   | )
|Discontinued operations per share     |                                                                                     |         | 0.17   |       |         |  |       |         |   |  | 0.27    |        |   |  |        |        
|                                      |                                                                                     |         |        |       |         |  |        |         |   |  |         |       
|                                      | Basic and diluted income (loss) per common share                                    |         | $      | 0.15  |         |  |        | (0.05   | ) |  |         | 0.19   |   |  |         | (0.16   | )
|                                      |                                                                                     |         |        |       |         |  |        |         |   |  |         |       



|     |                                                        
|---- | -------------------------------------------------------
|(20) | Financial Information for Guarantors and Non-Guarantors



|                                            |                      |                         |         |            |              |  |            |              |  |  |              |        |  |       |          |   |  |  |         |        | 
|------------------------------------------- | -------------------- | ----------------------- | ------- | ---------- | ------------ |  | ---------- | ------------ |  |  | ------------ | ------ |  | ----- | -------- | - |  |  | ------- | ------ | 
|                                            |                      | As of December 31, 2003 |        
|                                            |                      |                         |        
|                                            |                      |                         |         | Non        |              |  |           
|                                            |                      |                         |         | Guarantors |              |  | Guarantors |              |  | 
|Condensed Consolidating Balance Sheet       |                      | Parent                  |         |            | Subsidiaries |  |            | Subsidiaries |  |  | Eliminations |        |  | Total |         
|                                            |                      |                         |         |            |              |  |            |              |  |  |              |        |  |       |         
|Cash and cash equivalents                   |                      | $                       | 24,503  |            |              |  | 18,340     |              |  |  | 2,766        |        |  |       |         |   |  |  | 45,609  |       
|Net receivables                             |                      |                         |        |            |              |  | 23,917     |              |  |  | 1,650        |        |  |       |         |   |  |  | 25,567  |       
|Other current assets                        |                      |                         | 2,379   |            |              |  | 760        |              |  |  | 343          |        |  |       |         |   |  |  | 3,482   |       
|Assets held for sale                        |                      |                         |        |            |              |  | 917        |              |  |  | 23,027       |        |  |       |         |   |  |  | 23,944  |       
|                                            |                      |                         |         |            |              |  |            |              |  |  |              |        |  |       |         
|                                            | Total current assets |                         |         | 26,882     |              |  |            | 43,934       |  |  |              | 27,786 |  |       |          |  |  |  |         | 98,602 | 
|Property and equipment, net                 |                      |                         | 1,453   |            |              |  | 15,987     |              |  |  | 7,118        |        |  |       |         |   |  |  | 24,558  |       
|Intangible assets, net                      |                      |                         |        |            |              |  | 10,981     |              |  |  | 696,232      |        |  |       |         |   |  |  | 707,213 |       
|Deferred financing costs, net               |                      |                         | 11,461  |            |              |  |           |              |  |  |             |        |  |       |         |   |  |  | 11,461  |       
|Investment in subsidiaries and intercompany |                      |                         | 717,433 |            |              |  | 274,973    |              |  |  | (633,201     | )      |  |       | (359,205 | ) |  |  |        |       
|Other assets                                |                      |                         | 300     |            |              |  | 147        |              |  |  | 1            |        |  |       |         |   |  |  | 448     |       
|                                            |                      |                         |         |            |              |  |            |              |  |  |              |        |  |       |         
|                                            |                      | $                       | 757,529 |            |              |  | 346,022    |              |  |  | 97,936       |        |  |       | (359,205 | ) |  |  | 842,282 |       
|                                            |                      |                         |         |            |              |  |            |              |  |  |              |        |  |       |         

F-38



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                      |                      |                         |          |            |              |  |            |              |  |  |              |        |  |       |          |          |   |  |          |         | 
|------------------------------------- | -------------------- | ----------------------- | -------- | ---------- | ------------ |  | ---------- | ------------ |  |  | ------------ | ------ |  | ----- | -------- | -------- | - |  | -------- | ------- | 
|                                      |                      | As of December 31, 2003 |         
|                                      |                      |                         |         
|                                      |                      |                         |          | Non        |              |  |           
|                                      |                      |                         |          | Guarantors |              |  | Guarantors |              |  | 
|Condensed Consolidating Balance Sheet |                      | Parent                  |          |            | Subsidiaries |  |            | Subsidiaries |  |  | Eliminations |        |  | Total |         
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |        |  |       |         
|Current portion of long-term debt     |                      | $                       | 1,250    |            |              |  | 66         |              |  |  | 161          |        |  |       |         |          |   |  | 1,477    |        
|Accounts payable and accrued expenses |                      |                         | 6,371    |            |              |  | 7,769      |              |  |  | 4,682        |        |  |       |         |          |   |  | 18,822   |        
|Accrued interest                      |                      |                         | 6,370    |            |              |  |           |              |  |  |             |        |  |       |         |          |   |  | 6,370    |        
|Deposit on the sale of station        |                      |                         | 1,500    |            |              |  |           |              |  |  |             |        |  |       |         |          |   |  | 1,500    |        
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |        |  |       |         
|                                      | Current liabilities  |                         |          | 15,491     |              |  |            | 7,835        |  |  |              | 4,843  |  |       |          |         |   |  |          | 28,169  | 
|Long-term debt                        |                      |                         | 448,996  |            |              |  | 637        |              |  |  | 3,084        |        |  |       |         |          |   |  | 452,717  |        
|Deferred income taxes                 |                      |                         |         |            |              |  |           |              |  |  | 68,354       |        |  |       |         |          |   |  | 68,354   |        
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |        |  |       |         
|                                      | Total liabilities    |                         |          | 464,487    |              |  |            | 8,472        |  |  |              | 76,281 |  |       |          |         |   |  |          | 549,240 | 
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |        |  |       |         
|Series B Preferred stock              |                      |                         | 76,366   |            |              |  |           |              |  |  |             |        |  |       |         |          |   |  | 76,366   |        
|Common stock                          |                      |                         | 6        |            |              |  |           |              |  |  | 1            |        |  |       | (1       | )        |   |  | 6        |        
|Additional paid-in capital            |                      |                         | 443,961  |            |              |  |           |              |  |  | 94,691       |        |  |       | (94,691  | )        |   |  | 443,961  |        
|Accumulated deficit                   |                      |                         | (227,291 | )          |              |  | 337,550    |              |  |  | (73,037      | )      |  |       | (264,513 | )        |   |  | (227,291 | )      
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |        |  |       |         
|                                      | Stockholders equity |                         |          | 216,676    |              |  |            | 337,550      |  |  |              | 21,655 |  |       |          | (359,205 | ) |  |          | 216,676 | 
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |        |  |       |         
|                                      |                      | $                       | 757,529  |            |              |  | 346,022    |              |  |  | 97,936       |        |  |       | (359,205 | )        |   |  | 842,282  |        
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |        |  |       |         

|                                            |                      |                         |         |            |              |  |            |              |  |  |              |        |  |       |          |   |  |  |           |         | 
|------------------------------------------- | -------------------- | ----------------------- | ------- | ---------- | ------------ |  | ---------- | ------------ |  |  | ------------ | ------ |  | ----- | -------- | - |  |  | --------- | ------- | 
|                                            |                      | As of December 31, 2004 |        
|                                            |                      |                         |        
|                                            |                      |                         |         | Non        |              |  |           
|                                            |                      |                         |         | Guarantors |              |  | Guarantors |              |  | 
|Condensed Consolidating Balance Sheet       |                      | Parent                  |         |            | Subsidiaries |  |            | Subsidiaries |  |  | Eliminations |        |  | Total |         
|                                            |                      |                         |         |            |              |  |            |              |  |  |              |        |  |       |         
|Cash and cash equivalents                   |                      | $                       | 110,374 |            |              |  | 18,647     |              |  |  | 3,011        |        |  |       |         |   |  |  | 132,032   |        
|Net receivables                             |                      |                         |        |            |              |  | 30,974     |              |  |  | 1,648        |        |  |       |         |   |  |  | 32,622    |        
|Other current assets                        |                      |                         | 992     |            |              |  | 1,069      |              |  |  | 459          |        |  |       |         |   |  |  | 2,520     |        
|Assets held for sale                        |                      |                         |        |            |              |  | 1,107      |              |  |  | 63,897       |        |  |       |         |   |  |  | 65,004    |        
|                                            |                      |                         |         |            |              |  |            |              |  |  |              |        |  |       |         
|                                            | Total current assets |                         |         | 111,366    |              |  |            | 51,797       |  |  |              | 69,015 |  |       |          |  |  |  |           | 232,178 | 
|Property and equipment, net                 |                      |                         | 1,334   |            |              |  | 14,177     |              |  |  | 6,667        |        |  |       |         |   |  |  | 22,178    |        
|Intangible assets, net                      |                      |                         | 1,962   |            |              |  | 9,249      |              |  |  | 733,405      |        |  |       |         |   |  |  | 744,616   |        
|Deferred financing costs, net               |                      |                         | 10,073  |            |              |  |           |              |  |  |             |        |  |       |         |   |  |  | 10,073    |        
|Investment in subsidiaries and intercompany |                      |                         | 738,151 |            |              |  | 342,518    |              |  |  | (644,000     | )      |  |       | (436,669 | ) |  |  |          |        
|Other assets                                |                      |                         | 37      |            |              |  | 640        |              |  |  | 1            |        |  |       |         |   |  |  | 678       |        
|                                            |                      |                         |         |            |              |  |            |              |  |  |              |        |  |       |         
|                                            |                      | $                       | 862,923 |            |              |  | 418,381    |              |  |  | 165,088      |        |  |       | (436,669 | ) |  |  | 1,009,723 |        
|                                            |                      |                         |         |            |              |  |            |              |  |  |              |        |  |       |         

F-39



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                      |                      |                         |          |            |              |  |            |              |  |  |              |         |  |       |          |          |   |  |           |         | 
|------------------------------------- | -------------------- | ----------------------- | -------- | ---------- | ------------ |  | ---------- | ------------ |  |  | ------------ | ------- |  | ----- | -------- | -------- | - |  | --------- | ------- | 
|                                      |                      | As of December 31, 2004 |         
|                                      |                      |                         |         
|                                      |                      |                         |          | Non        |              |  |           
|                                      |                      |                         |          | Guarantors |              |  | Guarantors |              |  | 
|Condensed Consolidating Balance Sheet |                      | Parent                  |          |            | Subsidiaries |  |            | Subsidiaries |  |  | Eliminations |         |  | Total |         
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |         |  |       |         
|Current portion of long-term debt     |                      | $                       | 123,750  |            |              |  | 70         |              |  |  | 3,084        |         |  |       |         |          |   |  | 126,904   |        
|Accounts payable and accrued expenses |                      |                         | 8,206    |            |              |  | 11,542     |              |  |  | 4,477        |         |  |       |         |          |   |  | 24,225    |        
|Accrued interest                      |                      |                         | 5,423    |            |              |  | 5          |              |  |  |             |         |  |       |         |          |   |  | 5,428     |        
|Deferred commitment fee               |                      |                         | 525      |            |              |  |           |              |  |  |             |         |  |       |         |          |   |  | 525       |        
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |         |  |       |         
|                                      | Current liabilities  |                         |          | 137,904    |              |  |            | 11,617       |  |  |              | 7,561   |  |       |          |         |   |  |           | 157,082 | 
|Long-term debt                        |                      |                         | 326,476  |            |              |  | 567        |              |  |  |             |         |  |       |         |          |   |  | 327,043   |        
|Other debt                            |                      |                         | 993      |            |              |  |           |              |  |  |             |         |  |       |         |          |   |  | 993       |        
|Deferred income taxes                 |                      |                         |         |            |              |  |           |              |  |  | 127,055      |         |  |       |         |          |   |  | 127,055   |        
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |         |  |       |         
|                                      | Total liabilities    |                         |          | 465,373    |              |  |            | 12,184       |  |  |              | 134,616 |  |       |          |         |   |  |           | 612,173 | 
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |         |  |       |         
|Series B preferred stock              |                      |                         | 84,914   |            |              |  |           |              |  |  |             |         |  |       |         |          |   |  | 84,914    |        
|Series C preferred stock              |                      |                         | 1        |            |              |  |           |              |  |  |             |         |  |       |         |          |   |  | 1         |        
|Common stock                          |                      |                         | 6        |            |              |  |           |              |  |  | 1            |         |  |       | (1       | )        |   |  | 6         |        
|Additional paid-in capital            |                      |                         | 520,450  |            |              |  |           |              |  |  | 94,691       |         |  |       | (94,691  | )        |   |  | 520,450   |        
|Accumulated deficit                   |                      |                         | (207,821 | )          |              |  | 406,197    |              |  |  | (64,220      | )       |  |       | (341,977 | )        |   |  | (207,821  | )      
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |         |  |       |         
|                                      | Stockholders equity |                         |          | 312,636    |              |  |            | 406,197      |  |  |              | 30,472  |  |       |          | (436,669 | ) |  |           | 312,636 | 
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |         |  |       |         
|                                      |                      | $                       | 862,923  |            |              |  | 418,381    |              |  |  | 165,088      |         |  |       | (436,669 | )        |   |  | 1,009,723 |        
|                                      |                      |                         |          |            |              |  |            |              |  |  |              |         |  |       |         

|                                                                  |                                             |                                             |         |            |              |  |           |              |  |  |              |         |   |       |       |        |   |  |         |         |  
|----------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------- | ------- | ---------- | ------------ |  | --------- | ------------ |  |  | ------------ | ------- | - | ----- | ----- | ------ | - |  | ------- | ------- | -
|                                                                  |                                             | For the Fiscal Year Ended December 29, 2002 |        
|                                                                  |                                             |                                             |        
|                                                                  |                                             |                                             |         | Non        |              |  |          
|                                                                  |                                             |                                             |         | Guarantors |              |  | Guarantor |              |  | 
|Condensed Consolidating Statement of Operations                   |                                             | Parent                                      |         |            | Subsidiaries |  |           | Subsidiaries |  |  | Eliminations |         |   | Total |      
|                                                                  |                                             |                                             |         |            |              |  |           |              |  |  |              |         |   |       |      
|Net revenue                                                       |                                             | $                                           |        |            |              |  | 124,241   |              |  |  | 11,447       |         |   |       |      |        |   |  | 135,688 |        
|Station operating expenses                                        |                                             |                                             |        |            |              |  | 68,838    |              |  |  | 8,941        |         |   |       |      |        |   |  | 77,779  |        
|Corporate expenses                                                |                                             |                                             | 13,537  |            |              |  | 9         |              |  |  | 480          |         |   |       | (480  | )      |   |  | 13,546  |        
|Depreciation and amortization                                     |                                             |                                             | 340     |            |              |  | 1,841     |              |  |  | 690          |         |   |       |      |        |   |  | 2,871   |        
|                                                                  |                                             |                                             |         |            |              |  |           |              |  |  |              |         |   |       |      
|                                                                  | Operating income from continuing operations |                                             |         | (13,877    | )            |  |           | 53,553       |  |  |              | 1,336   |   |       |       | 480    |   |  |         | 41,492  |  
|Interest expense, net                                             |                                             |                                             | (28,773 | )          |              |  |          |              |  |  | (5,373       | )       |   |       |      |        |   |  | (34,146 | )      
|Other income (expense), net                                       |                                             |                                             | (1,636  | )          |              |  | 1,394     |              |  |  | 2            |         |   |       | (480  | )      |   |  | (720    | )      
|Equity in net income of subsidiaries                              |                                             |                                             | (6,648  | )          |              |  |          |              |  |  |             |         |   |       | 6,648 |        |   |  |        |        
|Income tax expense                                                |                                             |                                             | 52,208  |            |              |  | 250       |              |  |  | 636          |         |   |       |      |        |   |  | 53,094  |        
|Discontinued operations, net of tax                               |                                             |                                             |        |            |              |  | 1,910     |              |  |  |             |         |   |       |      |        |   |  | 1,910   |        
|Cumulative effect of a change in accounting principle, net of tax |                                             |                                             |        |            |              |  |          |              |  |  | (45,288      | )       |   |       |      |        |   |  | (45,288 | )      
|                                                                  |                                             |                                             |         |            |              |  |           |              |  |  |              |         |   |       |      
|                                                                  | Net (loss) income                           |                                             | $       | (89,846    | )            |  |           | 56,607       |  |  |              | (49,959 | ) |       |       | (6,648 | ) |  |         | (89,846 | )
|                                                                  |                                             |                                             |         |            |              |  |           |              |  |  |              |         |   |       |      

F-40



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |         |   |       |        |         |   |  |         |         |  
|----------------------------------------------- | --------------------------------------------------- | ------------------------------------------- | ------- | ---------- | ------------ |  | ---------- | ------------ |  |  | ------------ | ------- | - | ----- | ------ | ------- | - |  | ------- | ------- | -
|                                                |                                                     | For the Fiscal Year Ended December 31, 2003 |        
|                                                |                                                     |                                             |        
|                                                |                                                     |                                             |         | Non        |              |  |           
|                                                |                                                     |                                             |         | Guarantors |              |  | Guarantors |              |  | 
|Condensed Consolidating Statement of Operations |                                                     | Parent                                      |         |            | Subsidiaries |  |            | Subsidiaries |  |  | Eliminations |         |   | Total |       
|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |         |   |       |       
|Net revenue                                     |                                                     | $                                           |        |            |              |  | 124,130    |              |  |  | 11,136       |         |   |       |       |         |   |  | 135,266 |        
|Station operating expenses                      |                                                     |                                             |        |            |              |  | 68,261     |              |  |  | 8,056        |         |   |       |       |         |   |  | 76,317  |        
|Corporate expenses                              |                                                     |                                             | 17,853  |            |              |  |           |              |  |  | 480          |         |   |       | (480   | )       |   |  | 17,853  |        
|Depreciation and amortization                   |                                                     |                                             | 389     |            |              |  | 2,053      |              |  |  | 459          |         |   |       |       |         |   |  | 2,901   |        
|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |         |   |       |       
|                                                | Operating income from continuing operations         |                                             |         | (18,242    | )            |  |            | 53,816       |  |  |              | 2,141   |   |       |        | 480     |   |  |         | 38,195  |  
|Interest expense, net                           |                                                     |                                             | (31,284 | )          |              |  |           |              |  |  | (5,338       | )       |   |       |       |         |   |  | (36,622 | )      
|Other income (expense), net                     |                                                     |                                             |        |            |              |  | 3,388      |              |  |  | (1,783       | )       |   |       | (480   | )       |   |  | 1,125   |        
|Equity in net income of subsidiaries            |                                                     |                                             | (40,776 | )          |              |  |           |              |  |  |             |         |   |       | 40,776 |         |   |  |        |        
|Income tax expense                              |                                                     |                                             |        |            |              |  |           |              |  |  | 11,280       |         |   |       |       |         |   |  | 11,280  |        
|Discontinued operations, net of tax             |                                                     |                                             |        |            |              |  | (168       | )            |  |  |             |         |   |       |       |         |   |  | (168    | )      
|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |         |   |       |       
|                                                | Net (loss) income                                   |                                             | $       | (8,750     | )            |  |            | 57,036       |  |  |              | (16,260 | ) |       |        | (40,776 | ) |  |         | (8,750  | )
|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |         |   |       |       
|Dividends on preferred stock                    |                                                     |                                             | (1,366  | )          |              |  |           |              |  |  |             |         |   |       |       |         |   |  | (1,366  | )      
|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |         |   |       |       
|                                                | Net (loss) income applicable to common stockholders |                                             |         | (10,116    | )            |  |            | 57,036       |  |  |              | (16,260 | ) |       |        | (40,776 | ) |  |         | (10,116 | )
|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |         |   |       |       

|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |       |  |       |        |         |   |  |         |        | 
|----------------------------------------------- | --------------------------------------------------- | ------------------------------------------- | ------- | ---------- | ------------ |  | ---------- | ------------ |  |  | ------------ | ----- |  | ----- | ------ | ------- | - |  | ------- | ------ | 
|                                                |                                                     | For the Fiscal Year Ended December 31, 2004 |        
|                                                |                                                     |                                             |        
|                                                |                                                     |                                             |         | Non        |              |  |           
|                                                |                                                     |                                             |         | Guarantors |              |  | Guarantors |              |  | 
|Condensed Consolidating Statement of Operations |                                                     | Parent                                      |         |            | Subsidiaries |  |            | Subsidiaries |  |  | Eliminations |       |  | Total |       
|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |       |  |       |       
|Net revenue                                     |                                                     | $                                           |        |            |              |  | 145,193    |              |  |  | 11,250       |       |  |       |       |         |   |  | 156,443 |       
|Station operating expenses                      |                                                     |                                             |        |            |              |  | 80,044     |              |  |  | 8,158        |       |  |       |       |         |   |  | 88,202  |       
|Corporate expenses                              |                                                     |                                             | 13,346  |            |              |  |           |              |  |  | 480          |       |  |       | (480   | )       |   |  | 13,346  |       
|Depreciation and amortization                   |                                                     |                                             | 404     |            |              |  | 2,391      |              |  |  | 513          |       |  |       |       |         |   |  | 3,308   |       
|Gain on sale of stations                        |                                                     |                                             |        |            |              |  | (5,461     | )            |  |  |             |       |  |       |       |         |   |  | (5,461  | )     
|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |       |  |       |       
|                                                | Operating income from continuing operations         |                                             |         | (13,750    | )            |  |            | 68,219       |  |  |              | 2,099 |  |       |        | 480     |   |  |         | 57,048 | 
|Interest expense, net                           |                                                     |                                             | (35,837 | )          |              |  |           |              |  |  | (5,272       | )     |  |       |       |         |   |  | (41,109 | )     
|Other income (expense), net                     |                                                     |                                             | 141     |            |              |  | 437        |              |  |  | 66           |       |  |       | (480   | )       |   |  | 164     |       
|Equity in net income of subsidiaries            |                                                     |                                             | (77,464 | )          |              |  |           |              |  |  |             |       |  |       | 77,464 |         |   |  |        |       
|Income tax expense                              |                                                     |                                             |        |            |              |  |           |              |  |  | 16,495       |       |  |       |       |         |   |  | 16,495  |       
|Discontinued operations, net of tax             |                                                     |                                             |        |            |              |  | (9         | )            |  |  | 28,419       |       |  |       |       |         |   |  | 28,410  |       
|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |       |  |       |       
|                                                | Net (loss) income                                   |                                             | $       | 28,018     |              |  |            | 68,647       |  |  |              | 8,817 |  |       |        | (77,464 | ) |  |         | 28,018 | 
|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |       |  |       |       
|Dividends on preferred stock                    |                                                     |                                             | (8,548  | )          |              |  |           |              |  |  |             |       |  |       |       |         |   |  | (8,548  | )     
|Preferred stock beneficial conversion dividend  |                                                     |                                             | (11,457 | )          |              |  |           |              |  |  |             |       |  |       |       |         |   |  | (11,457 | )     
|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |       |  |       |       
|                                                | Net (loss) income applicable to common stockholders |                                             |         | 8,013      |              |  |            | 68,647       |  |  |              | 8,817 |  |       |        | (77,464 | ) |  |         | 8,013  | 
|                                                |                                                     |                                             |         |            |              |  |            |              |  |  |              |       |  |       |       

F-41



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                |  |                                             |         |            |              |  |            |              |  |  |              |   |  |       |         |   |  |  |        |  
|----------------------------------------------- |  | ------------------------------------------- | ------- | ---------- | ------------ |  | ---------- | ------------ |  |  | ------------ | - |  | ----- | ------- | - |  |  | ------ | -
|                                                |  | For the Fiscal Year Ended December 29, 2002 |        
|                                                |  |                                             |        
|                                                |  |                                             |         | Non        |              |  |           
|                                                |  |                                             |         | Guarantors |              |  | Guarantors |              |  | 
|Condensed Consolidating Statement of Cash Flows |  | Parent                                      |         |            | Subsidiaries |  |            | Subsidiaries |  |  | Eliminations |   |  | Total |        
|                                                |  |                                             |         |            |              |  |            |              |  |  |              |   |  |       |        
|Cash flows from operating activities            |  | $                                           | (38,412 | )          |              |  | 49,435     |              |  |  | (357         | ) |  |       |        |   |  |  | 10,666 |  
|                                                |  |                                             |         |            |              |  |            |              |  |  |              |   |  |       |        
|Cash flows from investing activities            |  | $                                           | 65,347  |            |              |  | (3,762     | )            |  |  | (232         | ) |  |       | (52,088 | ) |  |  | 9,265  |  
|                                                |  |                                             |         |            |              |  |            |              |  |  |              |   |  |       |        
|Cash flows from financing activities            |  | $                                           | 50      |            |              |  | (52,146    | )            |  |  | (133         | ) |  |       | 52,088  |   |  |  | (141   | )
|                                                |  |                                             |         |            |              |  |            |              |  |  |              |   |  |       |        

|                                                |  |                                             |          |            |              |  |            |              |  |  |              |   |  |       |         |   |  |  |          |  
|----------------------------------------------- |  | ------------------------------------------- | -------- | ---------- | ------------ |  | ---------- | ------------ |  |  | ------------ | - |  | ----- | ------- | - |  |  | -------- | -
|                                                |  | For the Fiscal Year Ended December 31, 2003 |         
|                                                |  |                                             |         
|                                                |  |                                             |          | Non        |              |  |           
|                                                |  |                                             |          | Guarantors |              |  | Guarantors |              |  | 
|Condensed Consolidating Statement of Cash Flows |  | Parent                                      |          |            | Subsidiaries |  |            | Subsidiaries |  |  | Eliminations |   |  | Total |        
|                                                |  |                                             |          |            |              |  |            |              |  |  |              |   |  |       |        
|Cash flows from operating activities            |  | $                                           | (41,226  | )          |              |  | 53,617     |              |  |  | 835          |   |  |       |        |   |  |  | 13,226   |  
|                                                |  |                                             |          |            |              |  |            |              |  |  |              |   |  |       |        
|Cash flows from investing activities            |  | $                                           | (174,049 | )          |              |  | (3,465     | )            |  |  | (100         | ) |  |       | (53,556 | ) |  |  | (231,170 | )
|                                                |  |                                             |          |            |              |  |            |              |  |  |              |   |  |       |        
|Cash flows from financing activities            |  | $                                           | 192,331  |            |              |  | (53,618    | )            |  |  | (146         | ) |  |       | 53,556  |   |  |  | 192,123  |  
|                                                |  |                                             |          |            |              |  |            |              |  |  |              |   |  |       |        

|                                                |  |                                             |         |            |              |  |            |              |  |  |              |   |  |       |          |   |  |  |        |  
|----------------------------------------------- |  | ------------------------------------------- | ------- | ---------- | ------------ |  | ---------- | ------------ |  |  | ------------ | - |  | ----- | -------- | - |  |  | ------ | -
|                                                |  | For the Fiscal Year Ended December 31, 2004 |        
|                                                |  |                                             |        
|                                                |  |                                             |         | Non        |              |  |           
|                                                |  |                                             |         | Guarantors |              |  | Guarantors |              |  | 
|Condensed Consolidating Statement of Cash Flows |  | Parent                                      |         |            | Subsidiaries |  |            | Subsidiaries |  |  | Eliminations |   |  | Total |         
|                                                |  |                                             |         |            |              |  |            |              |  |  |              |   |  |       |         
|Cash flows from operating activities            |  | $                                           | (42,759 | )          |              |  | 59,656     |              |  |  | (4,058       | ) |  |       |         |   |  |  | 12,839 |  
|                                                |  |                                             |         |            |              |  |            |              |  |  |              |   |  |       |         
|Cash flows from investing activities            |  | $                                           | 130,277 |            |              |  | 3,136      |              |  |  | 73,114       |   |  |       | (131,069 | ) |  |  | 75,458 |  
|                                                |  |                                             |         |            |              |  |            |              |  |  |              |   |  |       |         
|Cash flows from financing activities            |  | $                                           | (1,647  | )          |              |  | (62,485    | )            |  |  | (68,811      | ) |  |       | 131,069  |   |  |  | (1,874 | )
|                                                |  |                                             |         |            |              |  |            |              |  |  |              |   |  |       |         

F-42



---



##### 






SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


FINANCIAL STATEMENT SCHEDULE  VALUATION AND
QUALIFYING ACCOUNTS


Fiscal years ended December 29, 2002, December 31,
2003 and December 31, 2004


|                                     |                                       |                |   |        |                 |  |  |                |   |  |               |   |            |             |  |       |  |  |  |        | 
|------------------------------------ | ------------------------------------- | -------------- | - | ------ | --------------- |  |  | -------------- | - |  | ------------- | - | ---------- | ----------- |  | ----- |  |  |  | ------ | 
|                                     |                                       | Balance        |   |        |                 |  |  |                |   |  |              
|                                     |                                       | Beginning of   |   |        | Charged to Cost |  |  | Charged to     |   |  |               |   | Balance at |            
|Description                          |                                       | Year           |   |        | and Expense     |  |  | Other Accounts |   |  | Deductions(1) |   |            | End of Year | 
|                                     |                                       |                |   |        |                 |  |  |                |   |  |               |   |            |             | 
|                                     |                                       | (In thousands) |  
|Fiscal year ended December 29, 2002: |                                       |                |   |        |                 |  |  |                |   |  |               |   |            |             |  |       |  |  |  |       
|                                     | Allowance for doubtful accounts       |                | $ | 5,451  |                 |  |  | (123           | ) |  |               |  |            |             |  | 1,286 |  |  |  | 4,042  | 
|                                     | Valuation allowance on deferred taxes |                |   | 13,878 |                 |  |  | 49,730         |   |  |               |  |            |             |  |      |  |  |  | 63,608 | 
|Fiscal year ended December 31, 2003: |                                       |                |   |        |                 |  |  |                |   |  |               |   |            |             |  |       |  |  |  |       
|                                     | Allowance for doubtful accounts       |                | $ | 4,042  |                 |  |  | 335            |   |  |               |  |            |             |  | 1,479 |  |  |  | 2,898  | 
|                                     | Valuation allowance on deferred taxes |                |   | 63,608 |                 |  |  | 9,925          |   |  |               |  |            |             |  |      |  |  |  | 73,533 | 
|Fiscal year ended December 31, 2004: |                                       |                |   |        |                 |  |  |                |   |  |               |   |            |             |  |       |  |  |  |       
|                                     | Allowance for doubtful accounts       |                | $ | 2,898  |                 |  |  | 1,458          |   |  |               |  |            |             |  | 916   |  |  |  | 3,440  | 
|                                     | Valuation allowance on deferred taxes |                |   | 73,533 |                 |  |  | (4,251         | ) |  |               |  |            |             |  |      |  |  |  | 69,282 | 






|    |                                    
|--- | -----------------------------------
|(1) | Cash write-offs, net of recoveries.



F-43



---



##### 



EXHIBIT INDEX




| |     |          
| | --- | ---------
| | (a) | Exhibits:

| |   |     |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | --- |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3 | .1  |  |  |  | Third Amended and Restated Certificate of Incorporation of
    Spanish Broadcasting System, Inc. (the Company),
    dated September 29, 1999 (incorporated by reference to the
    Companys 1999 Registration Statement on Form S-1
    (Commission File No. 333-85499) (the 1999
    Registration Statement)) (Exhibit A to this exhibit
    is incorporated by reference to the Companys Current
    Report on Form 8-K, dated March 25, 1996 (the 1996
    Current Report).
| | 3 | .2  |  |  |  | Certificate of Amendment to the Third Amended and Restated
    Certificate of Incorporation of the Company, dated
    September 29, 1999 (incorporated by reference to
    Exhibit 3.2 of the Companys 1999 Registration
    Statement).                                                                                                                                                                                                                                             
| | 3 | .3  |  |  |  | Amended and Restated By-Laws of the Company (incorporated by
    reference to Exhibit 3.3 of the Companys 1999
    Registration Statement).                                                                                                                                                                                                                                                                                                                                          
| | 3 | .4  |  |  |  | Certificate of Elimination of
    141/4% Senior
    Exchangeable Preferred Stock, Series A of the Company,
    dated October 28, 2003 (incorporated by reference to
    Exhibit 3.3 of the Companys Quarterly Report on Form
    10-Q, dated November 14, 2003 (the 11/14/03 Quarterly
    Report)).                                                                                                                                                                               
| | 4 | .1  |  |  |  | Article V of the Third Amended and Restated Certificate of
    Incorporation of the Company, dated September 29, 1999
    (incorporated by reference to Exhibit 3.1 of the
    Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                
| | 4 | .2  |  |  |  | Certificate of Designations dated October 29, 2003 Setting
    Forth the Voting Power, Preferences and Relative, Participating,
    Optional and Other Special Rights and Qualifications,
    Limitations and Restrictions of the
    103/4%
    Series A Cumulative Exchangeable Redeemable Preferred Stock
    of Spanish Broadcasting System, Inc. (incorporated by reference
    to Exhibit 4.1 of the Companys 11/14/03 Quarterly
    Report).                                  
| | 4 | .3  |  |  |  | Certificate of Designations dated October 29, 2003 Setting
    Forth the Voting Power, Preferences and Relative, Participating,
    Optional and Other Special Rights and Qualifications,
    Limitations and Restrictions of the
    103/4%
    Series B Cumulative Exchangeable Redeemable Preferred Stock
    of Spanish Broadcasting System, Inc. (incorporated by reference
    to Exhibit 4.2 of the Companys 11/14/03 Quarterly
    Report).                                  
| | 4 | .4  |  |  |  | Indenture dated June 29, 1994 among the Company, IBJ
    Schroder Bank & Trust Company, as Trustee, the
    Guarantors named therein and the Purchasers named therein
    (incorporated by reference to Exhibit 4.1 of the
    Companys 1994 Registration Statement on Form S-4 (the
    1994 Registration Statement).                                                                                                                                                             
| | 4 | .5  |  |  |  | First Supplemental Indenture dated as of March 25, 1996 to
    the Indenture dated as of June 29, 1994 among the Company,
    the Guarantors named therein and IBJ Schroder Bank &
    Trust Company, as Trustee (incorporated by reference to the 1996
    Current Report).                                                                                                                                                                                                          
| | 4 | .6  |  |  |  | Second Supplemental Indenture dated as of March 1, 1997 to
    the Indenture dated as of June 29, 1994 among the Company,
    the Guarantors named therein and IBJ Schroder Bank &
    Trust Company, as Trustee (incorporated by reference to the 1996
    Current Report).                                                                                                                                                                                                          
| | 4 | .7  |  |  |  | Supplemental Indenture dated as of October 21, 1999 to the
    Indenture dated as of June 29, 1994 among the Company, the
    Guarantors named therein and IBJ Schroder Bank & Trust
    Company, as Trustee (incorporated by reference to the
    Companys 1999 Registration Statement).                                                                                                                                                                                            
| | 4 | .8  |  |  |  | Indenture with respect to
    95/8% Senior
    Subordinated Notes due 2009 with The Bank of New York as
    Trustee, dated November 2, 1999 (incorporated by reference
    to the Current Report on Form 8-K dated November 2, 1999
    (the 1999 Current Report)).                                                                                                                                                                                                                 
| | 4 | .9  |  |  |  | Indenture with respect to
    95/8% Senior
    Subordinated Notes due 2009 with the Bank of New York as
    Trustee, dated June 8, 2001 (incorporated by reference to
    the Companys Registration Statement on Form S-3,
    filed on June 25, 2001 (the 2001 Form S-3).                                                                                                                                                                                                         
| | 4 | .10 |  |  |  | Form of stock certificate for the Class A common stock of
    the Company (incorporated by reference to the Companys
    1999 Registration Statement).                                                                                                                                                                                                                                                                                                                               
| | 4 | .11 |  |  |  | Certificate of Elimination of
    141/4%
    of Senior Exchangeable Preferred Stock, Series A of the
    Company, dated October 28, 2003 (incorporated by reference
    to Exhibit 3.3 of the Companys Quarterly Report on
    Form 10-Q filed November 14, 2003).                                                                                                                                                                                                                   



---



##### 



| |    |      |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | ---- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4  | .12  |  |  |  | Certificate of Designation Setting Forth the Voting Power,
    Preferences and Relative, Participating, Optional and Other
    Special Rights and Qualifications, Limitations and Restrictions
    of the Series C Convertible Preferred Stock of the Company
    (Certificate of Designation of Series C Preferred
    Stock) (incorporated by reference to Exhibit 4.1 of
    the Companys Quarterly Report on Form 8-K filed on
    December 27, 2004).                                             
| | 4  | .13  |  |  |  | Certificate of Correction to Certificate of Designation of
    Series C Preferred Stock of the Company dated
    January 7, 2005.                                                                                                                                                                                                                                                                                                                                                                         
| | 10 | .1   |  |  |  | Warrant Agreement dated as of March 15, 1997 among the
    Company and IBJ Schroder Bank & Trust Company, as
    Warrant Agent (incorporated by reference to the 1996 Current
    Report).                                                                                                                                                                                                                                                                                                                
| | 10 | .2*  |  |  |  | Common Stock Registration Rights and Stockholders Agreement
    dated as of June 29, 1994 among the Company and certain
    Management Stockholders named therein (incorporated by reference
    to the 1994 Registration Statement).                                                                                                                                                                                                                                                                     
| | 10 | .3*  |  |  |  | Amended and Restated Employment Agreement dated as of
    October 25, 1999, by and between the Company and Raúl
    Alarcón, Jr. (incorporated by reference to the
    Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                                            
| | 10 | .4*  |  |  |  | Employment Agreement dated February 5, 1997 between the
    Company and Carey Davis (incorporated by reference to the
    Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                                                                                         
| | 10 | .5*  |  |  |  | Employment Agreement dated as of October 25, 1999, by and
    between the Company and Joseph A. García (incorporated by
    reference to the Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                                                                      
| | 10 | .9   |  |  |  | Ground Lease dated December 18, 1995 between Louis Viola
    Company and SBS-NJ (incorporated by reference to the 1996
    Current Report).                                                                                                                                                                                                                                                                                                                                                               
| | 10 | .10  |  |  |  | Ground Lease dated December 18, 1995 between Frank F. Viola
    and Estate of Thomas C. Viola and SBS-NJ (incorporated by
    reference to the 1996 Current Report).                                                                                                                                                                                                                                                                                                                                      
| | 10 | .11  |  |  |  | Lease and License Agreement dated February 1, 1991 between
    Empire State Building Company, as landlord, and SBS-NY, as
    tenant (incorporated by reference to Exhibit 10.15.1 of the
    1994 Registration Statement).                                                                                                                                                                                                                                                                               
| | 10 | .12  |  |  |  | Modification of Lease and License dated June 30, 1992
    between Empire State Building Company and SBS-NY related to
    WSKQ-FM (incorporated by reference to Exhibit 10.15.2 of
    the 1994 Registration Statement).                                                                                                                                                                                                                                                                                  
| | 10 | .13  |  |  |  | Lease and License Modification and Extension Agreement dated as
    of June 30, 1992 between Empire State Building Company, as
    landlord, and SBS-NY as tenant (incorporated by reference to
    Exhibit 10.15.3 of the 1994 Registration Statement).                                                                                                                                                                                                                                                  
| | 10 | .14  |  |  |  | Lease Agreement dated June 1, 1992 among Raúl
    Alarcón, Sr., Raúl Alarcón, Jr., and
    SBS-Fla (incorporated by reference to Exhibit 10.30 of the
    1994 Registration Statement).                                                                                                                                                                                                                                                                                                                   
| | 10 | .15  |  |  |  | Agreement of Lease dated as of March 1, 1996. No.
    WT-174-A119 1067 between The Port Authority of New Jersey and
    SBS of Greater New York, Inc. as assignee of Park Radio
    (incorporated by reference to the 1996 Current Report).                                                                                                                                                                                                                                                               
| | 10 | .16  |  |  |  | Asset Purchase Agreement dated as of July 2, 1997, by and
    between Spanish Broadcasting System, Inc. (New Jersey), Spanish
    Broadcasting System of California, Inc., Spanish Broadcasting
    System of Florida, Inc., Spanish Broadcasting System, Inc., and
    One-on-One Sports, Inc. (incorporated by reference to
    Exhibit 10.62 of the Companys Registration Statement
    on Form S-4 (Commission File No. 333-26295)).                                                                 
| | 10 | .17  |  |  |  | Amendment No. 1 dated as of September 29, 1997 to the
    Asset Purchase Agreement dated as of July 2, 1997, by and
    between Spanish Broadcasting System, Inc. (New Jersey), Spanish
    Broadcasting System of California, Inc., Spanish Broadcasting
    System of Florida, Inc., Spanish Broadcasting System, Inc., and
    One-on-One Sports, Inc. (incorporated by reference to the
    Companys Registration Statement on Form S-1, dated
    January 21, 1999 (Commission File No. 333-29449)).
| | 10 | .18  |  |  |  | Extension of lease of a Condominium Unit (Metropolitan Tower
    Condominium) between Raúl Alarcón, Jr.
    (Landlord) and Spanish Broadcasting System, Inc.
    (Tenant) (incorporated by reference to the
    Companys 1998 Annual Report on Form 10-K).                                                                                                                                                                                                                                           
| | 10 | .19* |  |  |  | Indemnification Agreement with Raúl Alarcón, Jr.
    dated as of November 2, 1999 (incorporated by reference to
    the 1999 Current Report).                                                                                                                                                                                                                                                                                                                                                             



---



##### 



| |    |      |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- | ---- |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10 | .20  |  |  |  | Indemnification Agreement with Román Martínez IV
    dated as of November 2, 1999 (incorporated by reference to
    the 1999 Current Report).                                                                                                                                                                                                                                                                                                                                                   
| | 10 | .21  |  |  |  | Indemnification Agreement with Jason L. Shrinsky dated as of
    November 2, 1999 (incorporated by reference to the 1999
    Current Report).                                                                                                                                                                                                                                                                                                                                                   
| | 10 | .22* |  |  |  | Spanish Broadcasting System 1999 Stock Option Plan (incorporated
    by reference to the Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                                                                                                                
| | 10 | .23* |  |  |  | Spanish Broadcasting System 1999 Company Stock Option Plan for
    Nonemployee Directors (incorporated by reference to the
    Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                                                                          
| | 10 | .24  |  |  |  | Form of Lock-Up Letter Agreement (incorporated by reference in
    the Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                                                                                                                                  
| | 10 | .25* |  |  |  | Option Grant not under the Stock Option Plans with Arnold
    Sheiffer, dated October 27, 1999 (incorporated by reference
    to the 1999 Current Report).                                                                                                                                                                                                                                                                                                                                      
| | 10 | .26  |  |  |  | Stock Purchase Agreement, dated as of May 8, 2000, by and
    between New World Broadcasters Corp., a Texas corporation, 910
    Broadcasting Corp., a Texas corporation, and Spanish
    Broadcasting System, Inc., a Delaware corporation (incorporated
    by reference to Exhibit 10.2 of the Companys Amended
    Quarterly Report).                                                                                                                                                      
| | 10 | .27  |  |  |  | Time Brokerage Agreement, dated May 8, 2000, by and among,
    New World Broadcasters Corp., a Texas corporation, 910
    Broadcasting Corp., a Texas corporation, and Spanish
    Broadcasting System of San Antonio, Inc., a Delaware
    corporation, and Spanish Broadcasting System, Inc., a Delaware
    corporation (incorporated by reference to Exhibit 10.5 of
    the Companys Quarterly Report on Form 10-Q, dated
    August 9, 2000 (the Companys 2000 Quarterly
    Report)).
| | 10 | .28  |  |  |  | Credit Agreement, dated as of July 6, 2000, among Spanish
    Broadcasting System, Inc., a Delaware corporation, the several
    banks and other financial institutions or entities from time to
    time party to the Credit Agreement and Lehman Commercial Paper
    Inc., as administrative agent (incorporated by reference to
    Exhibit 10.44 of the Companys Annual Report on Form
    10-K for fiscal year 2000 (the 2000 Form 10-K).                                              
| | 10 | .29  |  |  |  | Guarantee and Collateral Agreement made by Spanish Broadcasting
    System, Inc. and certain of its subsidiaries in favor of Lehman
    Commercial Paper, Inc. as Administrative Agent, dated as of
    July 6, 2000 (incorporated by reference to
    Exhibit 10.45 of the Companys 2000 Form 10-K).                                                                                                                                                                                          
| | 10 | .30* |  |  |  | Employment Agreement dated August 31, 2000, between William
    Tanner and the Company (incorporated by reference to
    Exhibit 10.47 of the Companys 2000 Form 10-K).                                                                                                                                                                                                                                                                                                                        
| | 10 | .31  |  |  |  | Deed of Constitution of Mortgage, Cadena Estereotempo, Inc., as
    Mortgagor, and Banco Bilbao Vizcaya Puerto Rico, as Mortgagee
    (incorporated by reference to Exhibit 10.49 of the
    Companys 2000 Form 10-K).                                                                                                                                                                                                                                                                         
| | 10 | .32  |  |  |  | Lease Agreement by and between the Company and Irradio Holdings,
    Ltd. made as of December 14, 2000 (incorporated by
    reference to Exhibit 10.50 of the Companys 2000 Form
    10-K).                                                                                                                                                                                                                                                                                                    
| | 10 | .33  |  |  |  | First Addendum to Lease between the Company and Irradio
    Holdings, Ltd. as of December 14, 2000 (incorporated by
    reference to Exhibit 10.51 of the Companys 2000 Form
    10-K).                                                                                                                                                                                                                                                                                                        
| | 10 | .34  |  |  |  | Asset Purchase Agreement dated as of November 2, 2000 by
    and between International Church of the FourSquare Gospel and
    the Company (incorporated by reference to Exhibit 10.1 of
    the Companys 2000 Form 10-K).                                                                                                                                                                                                                                                                     
| | 10 | .35  |  |  |  | Addendum to Asset Purchase Agreement, dated March 13, 2001,
    by and between International Church of the FourSquare Gospel and
    the Company (incorporated by reference to Exhibit 10.2 of
    the Companys Quarterly Report on Form 10-Q filed on
    May 9, 2001 (5/9/01 Quarterly Report)).                                                                                                                                                                                           
| | 10 | .36  |  |  |  | Time Brokerage Agreement, dated March 13, 2001, by and
    between International Church of the FourSquare Gospel and the
    Company (incorporated by reference to Exhibit 10.3 of the
    Companys 5/9/01 Quarterly Report).                                                                                                                                                                                                                                                                  
| | 10 | .37  |  |  |  | 93.5 Time Brokerage Agreement, dated March 13, 2001, by and
    between Spanish Broadcasting System Southwest, Inc. and
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.4 of the Companys 5/9/01
    Quarterly Report).                                                                                                                                                                                                                         



---



##### 



| |    |      |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                              
| | -- | ---- |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10 | .38  |  |  |  | Radio Network Affiliation Agreement, dated April 5, 2001,
    between Clear Channel Broadcasting, Inc. and SBS of
    San Francisco, Inc. (incorporated by reference to
    Exhibit 10.5 of the Companys 5/9/01 Quarterly Report).                                                                                                                                                                          
| | 10 | .39  |  |  |  | First Amendment to Credit Agreement, dated as of March 5,
    2001, by and among the Company, the lenders party to the Credit
    Agreement dated as of July 6, 2000 and Lehman Commercial
    Paper, Inc. (incorporated by reference to Exhibit 10.1 of
    the Companys 5/9/01 Quarterly Report).                                                                                                         
| | 10 | .40  |  |  |  | Purchase Agreement dated May 24, 2001 between the Company
    and Lehman Brothers Inc. with respect to
    95/8% Senior
    Subordinated Notes due 2009 (incorporated by reference to the
    Companys 2001 Form S-3).                                                                                                                                                                                      
| | 10 | .41  |  |  |  | Registration Rights Agreement dated June 8, 2001 between
    the Company and Lehman Brothers Inc. with respect to
    95/8% Senior
    Subordinated Notes due 2009 (incorporated be reference to the
    Companys 2001 Form S-3).                                                                                                                                                                           
| | 10 | .42  |  |  |  | Indemnification Agreement with Castor Fernandez dated as of
    August 9, 2001 (incorporated by reference to
    Exhibit 10.47 to the Companys Annual Report on Form
    10-K filed December 31, 2001).                                                                                                                                                                                                     
| | 10 | .43  |  |  |  | Form of Indemnification Agreement with Carl Parmer dated as of
    August 9, 2001 (incorporated by reference to
    Exhibit 10.48 to the Companys Annual Report on Form
    10-K filed December 31, 2001).                                                                                                                                                                                                  
| | 10 | .44* |  |  |  | Stock Option Agreement dated as of January 15, 2001 between
    the Company and Joseph A. García (incorporated by reference
    to Exhibit 10.49 to the Companys Annual Report on
    Form 10-K filed December 31, 2001).                                                                                                                                                                                   
| | 10 | .46* |  |  |  | Form of Stock Option Agreement dated as of October 29, 2001
    between Spanish Broadcasting System, Inc. and Carl Parmer
    (incorporated by reference to Exhibit 10.51 to the
    Companys Annual Report on Form 10-K filed
    December 31, 2001).                                                                                                                                                      
| | 10 | .47  |  |  |  | Amendment dated as of February 8, 2002 to Asset Purchase
    Agreement dated as of November 2, 2000 by and between
    International Church of the FourSquare Gospel and Spanish
    Broadcasting System, Inc., as amended by an Addendum dated
    March 13, 2001 (incorporated by reference to
    Exhibit 10.1 to the Companys Quarterly Transition
    Report on Form 10-Q filed February 13, 2002).    
| | 10 | .48  |  |  |  | Amendment No. 1 dated as of February 8, 2002 to Time
    Brokerage Agreement dated as of March 13, 2001 by and
    between International Church of the FourSquare Gospel, as
    Licensee, and Spanish Broadcasting System, Inc., as Time Broker
    (incorporated by reference to Exhibit 10.2 to the
    Companys Quarterly Transition Report on Form 10-Q filed
    February 13, 2002).                  
| | 10 | .49  |  |  |  | Amendment No. 1 dated as of February 8, 2002 to the
    93.5 Time Brokerage Agreement dated as of March 13, 2001 by
    and between Spanish Broadcasting System SouthWest, Inc., as
    Licensee and International Church of the FourSquare Gospel, as
    Time Broker (incorporated by reference to Exhibit 10.3 to
    the Companys Quarterly Transition Report on Form 10-Q
    filed February 13, 2002).
| | 10 | .50  |  |  |  | Warrant dated February 8, 2002 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.1 to the Companys Quarterly
    Report on Form 10-Q filed May 2, 2002).                                                                                                                                                                            
| | 10 | .51* |  |  |  | Stock Option Agreement dated as of January 16, 2002 between
    the Company and Joseph A. García (incorporated by reference
    to Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q filed May 2, 2002).                                                                                                                                                                                       
| | 10 | .52  |  |  |  | Asset Purchase Agreement dated June 4, 2002 by and among
    the Company, KTCY Licensing, Inc. and Entravision 
    Texas Limited Partnership (incorporated by reference to
    Exhibit 10.1 to the Companys Quarterly Report on Form
    10-Q filed August 14, 2002).                                                                                                                                     
| | 10 | .53  |  |  |  | Time Brokerage Agreement dated as of June 4, 2002 between
    KTCY Licensing, Inc. as Licensee and Entravision Communications
    Corporation as Programmer (incorporated by reference to
    Exhibit 10.2 to the Companys Quarterly Report on Form
    10-Q filed August 14, 2002).                                                                                                                        
| | 10 | .54* |  |  |  | Companys 1999 Stock Option Plan as amended on May 6,
    2002 (incorporated by reference to Exhibit 10.3 to the
    Companys Quarterly Report on Form 10-Q filed
    August 14, 2002).                                                                                                                                                                                                                     



---



##### 



| |    |      |  |   |  |                                                                                                                                                                                                                                                                                                                                               
| | -- | ---- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10 | .55* |  |  |  | Companys 1999 Stock Option Plan for Non-Employee Directors
    as amended on May 6, 2002 (incorporated by reference to
    Exhibit 10.4 to the Companys Quarterly Report on Form
    10-Q filed August 14, 2002).                                                                                                                           
| | 10 | .56* |  |  |  | Stock Option Agreement dated as of August 30, 2002 between
    the Company and William B. Tanner (incorporated by reference to
    Exhibit 10.1 to the Companys Quarterly Report on Form
    10-Q filed November 13, 2002).                                                                                                                  
| | 10 | .57* |  |  |  | Stock Option Agreement dated as of October 29, 2002 between
    the Company and Raúl Alarcón, Jr. (incorporated
    by reference to Exhibit 10.2 to the Companys
    Quarterly Report on Form 10-Q filed November 13, 2002).                                                                                                                 
| | 10 | .58  |  |  |  | Asset Purchase Agreement dated as of December 31, 2002 by
    and among Spanish Broadcasting System of Illinois, Inc., Big
    City Radio, Inc. and Big City Radio-CHI, L.L.C. (incorporated by
    reference to Exhibit 10.59 to the Companys Annual
    Report on Form 10-K filed March 31, 2003 (the 2003
    Form 10-K)).              
| | 10 | .59  |  |  |  | Time Brokerage Agreement dated as of December 31, 2002
    between Big City Radio-CHI, L.L.C. as Licensee and Spanish
    Broadcasting System of Illinois, Inc. as Programmer
    (incorporated by reference to Exhibit 10.60 to the
    Companys 2003 Form 10-K).                                                                           
| | 10 | .60  |  |  |  | Guaranty Agreement dated as of December 31, 2002 by the
    Company in favor of Big City Radio, Inc. and Big City Radio-CHI,
    L.L.C. (incorporated by reference to Exhibit 10.61 to the
    Companys 2003 Form 10-K).                                                                                                                     
| | 10 | .61  |  |  |  | Warrant dated March 31, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.4 of the Companys Quarterly
    Report on Form 10-Q, dated May 15, 2003 (the 5/15/03
    Quarterly Report)).                                                                        
| | 10 | .62  |  |  |  | Warrant dated April 30, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.5 of the Companys 5/15/03
    Quarterly Report).                                                                                                                                      
| | 10 | .63  |  |  |  | Warrant dated May 31, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.1 of the Companys Quarterly
    Report on Form 10-Q, dated August 13, 2003 (the
    8/13/03 Quarterly Report)).                                                                       
| | 10 | .64  |  |  |  | Warrant dated June 30, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.2 of the Companys 8/13/03
    Quarterly Report).                                                                                                                                       
| | 10 | .65  |  |  |  | Warrant dated July 31, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.3 of the Companys 8/13/03
    Quarterly Report).                                                                                                                                       
| | 10 | .66  |  |  |  | Asset Purchase Agreement dated as of September 18, 2003
    between Spanish Broadcasting System, Inc. and Border Media
    Partners, LLC (incorporated by reference to Exhibit 10.1 of
    the Companys Current Report on Form 8-K, dated
    September 25, 2003).                                                                           
| | 10 | .67  |  |  |  | Asset Purchase Agreement dated as of October 2, 2003
    between Spanish Broadcasting System, Inc., Spanish Broadcasting
    System-San Francisco, Inc., KPTI Licensing, Inc. and 3
    Point Media-San Francisco, LLC (incorporated by reference
    to Exhibit 10.1 of the Companys Current Report on
    Form 8-K, dated October 9, 2003).
| | 10 | .68  |  |  |  | Warrant dated August 31, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.1 of the Companys 11/14/03
    Quarterly Report).                                                                                                                                    
| | 10 | .69  |  |  |  | Warrant dated September 30, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.2 of the Companys 11/14/03
    Quarterly Report).                                                                                                                                 
| | 10 | .70  |  |  |  | Credit Agreement between the Company and Merrill Lynch, Pierce
    Fenner & Smith Incorporated, Deutsche Bank Securities
    Inc. and Lehman Commercial Paper Inc. dated October 30,
    2003 (incorporated by reference to Exhibit 10.3 of the
    Companys 11/14/03 Quarterly Report).                                                     
| | 10 | .71  |  |  |  | Guarantee and Collateral Agreement between the Company and
    certain of its subsidiaries in favor of Lehman Commercial Paper
    Inc. dated October 30, 2003 (incorporated by reference to
    Exhibit 10.4 of the Companys 11/14/03 Quarterly
    Report).                                                                                



---



##### 



| |    |      |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                              
| | -- | ---- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10 | .72  |  |  |  | Assignment of Leases and Rents by the Company in favor of Lehman
    Commercial Paper Inc. dated October 30, 2003 (incorporated
    by reference to Exhibit 10.5 of the Companys 11/14/03
    Quarterly Report).                                                                                                                                                                            
| | 10 | .73  |  |  |  | Deed of Trust, Assignment of Leases and Rents, Security
    Agreement and Fixture Filing by the Company in favor of Lehman
    Commercial Paper Inc. dated October 30, 2003 (incorporated
    by reference to Exhibit 10.6 of the Companys 11/14/03
    Quarterly Report).                                                                                                                  
| | 10 | .74  |  |  |  | Transmission Facilities Lease between the Company and
    International Church of the FourSquare Gospel, dated
    October 30, 2003 (incorporated by reference to
    Exhibit 10.7 of the Companys 11/14/03 Quarterly
    Report).                                                                                                                                                          
| | 10 | .75  |  |  |  | Purchase Agreement dated October 30, 2003 between the
    Company and Merrill Lynch, Pierce Fenner & Smith
    Incorporated, Deutsche Bank Securities Inc. and Lehman Brothers
    Inc. with respect to
    103/4%
    Series A Cumulative Exchangeable Redeemable Preferred Stock
    (incorporated by reference to Exhibit 10.8 of the
    Companys 11/14/03 Quarterly Report).           
| | 10 | .76* |  |  |  | Registration Rights Agreement dated October 30, 2003
    between the Company and Merrill Lynch, Pierce Fenner &
    Smith Incorporated, Deutsche Bank Securities Inc. and Lehman
    Brothers Inc. with respect to
    103/4%
    Series A Cumulative Exchangeable Redeemable Preferred Stock
    (incorporated by reference to Exhibit 10.9 of the
    Companys 11/14/03 Quarterly Report).
| | 10 | .77* |  |  |  | Nonqualified Stock Option Agreement dated as of July 11,
    2003 between the Company and Jack Langer (incorporated by
    reference to Exhibit 10.74 of the Companys Annual
    Report on Form 10-K for fiscal year 2004 (the 2004
    Form 10-K)).                                                                                                                                      
| | 10 | .78* |  |  |  | Nonqualified Stock Option Agreement dated as of July 11,
    2003 between the Company and Dan Mason (incorporated by
    reference to Exhibit 10.75 of the Companys 2004 Form
    10-K).                                                                                                                                                                                                    
| | 10 | .79* |  |  |  | Amended and Restated Employment Agreement dated October 31,
    2003 between the Company and Marko Radlovic (incorporated by
    reference to Exhibit 10.81 of the Companys 2004 Form
    10-K).                                                                                                                                                                                            
| | 10 | .80* |  |  |  | Incentive Stock Option Agreement dated September 8, 2003
    between the Company and William B. Tanner Jr. (incorporated by
    reference to Exhibit 10.76 of the Companys 2004 Form
    10-K).                                                                                                                                                                                             
| | 10 | .81* |  |  |  | Nonqualified Stock Option Agreement dated September 8, 2003
    between the Company and William B. Tanner, Jr.
    (incorporated by reference to Exhibit 10.77 of the
    Companys 2004 Form 10-K).                                                                                                                                                                                         
| | 10 | .82* |  |  |  | Nonqualified Stock Option Agreement dated October 27, 2003
    between the Company and Raúl Alarcón, Jr.
    (incorporated by reference to Exhibit 10.78 of the
    Companys 2004 Form 10-K).                                                                                                                                                                                               
| | 10 | .83* |  |  |  | Nonqualified Stock Option Agreement dated December 10, 2003
    between the Company and Marko Radlovic (incorporated by
    reference to Exhibit 10.79 of the Companys 2004 Form
    10-K).                                                                                                                                                                                                 
| | 10 | .84* |  |  |  | Incentive Stock Option Agreement dated December 10, 2003
    between the Company and Marko Radlovic (incorporated by
    reference to Exhibit 10.80 of the Companys 2004 Form
    10-K).                                                                                                                                                                                                    
| | 10 | .86* |  |  |  | Non-Qualified Stock Option Agreement dated as of March 3,
    2004 between the Company and Joseph A. García (incorporated
    by reference to Exhibit 10.1 to the Companys
    Quarterly Report on Form 10-Q filed May 10, 2004 (the
    5/10/04 Quarterly Report)).                                                                                                                      
| | 10 | .87* |  |  |  | Incentive Stock Option Agreement dated as of March 3, 2004
    between the Company and Joseph A. García (incorporated
    by reference to Exhibit 10.2 to the Companys 5/10/04
    Quarterly Report).                                                                                                                                                                                       
| | 10 | .88  |  |  |  | Amendment dated as of April 15, 2004, to the Asset Purchase
    Agreement dated as of October 2, 2003 between Spanish
    Broadcasting System, Inc., Spanish Broadcasting
    System-San Francisco, Inc., KPTI Licensing, Inc. and 3
    Point Media-San Francisco, LLC (incorporated by reference
    to Exhibit 10.3 of the Companys 5/10/04 Quarterly
    Report).                       
| | 10 | .89  |  |  |  | Time Brokerage Agreement dated as of April 15, 2004 between
    KPTI Licensing, Inc., and Spanish Broadcasting
    System-San Francisco, Inc. and 3 Point
    Media-San Francisco, LLC (incorporated by reference to
    Exhibit 10.4 of the Companys 5/10/04 Quarterly
    Report).                                                                                                        



---



##### 



| |       |      |  |   |  |                                                                                                                                                                                                                                                                                                                                    
| | ----- | ---- |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10    | .90* |  |  |  | Stock Option Letter Agreement dated as of July 2, 2004
    between the Company and Antonio S. Fernandez (incorporated by
    reference to Exhibit 10.1 of the Companys Quarterly
    Report on Form 10-Q filed August 9, 2004 (the
    8/9/04 Quarterly Report)).                                                               
| | 10    | .91* |  |  |  | Stock Option Letter Agreement dated as of July 2, 2004
    between the Company and Jose Antonio Villamil (incorporated by
    reference to Exhibit 10.2 of the Companys 8/9/04
    Quarterly Report).                                                                                                                             
| | 10    | .92  |  |  |  | Asset Purchase Agreement dated as of July 26, 2004 between
    Newsweb Corporation and Spanish Broadcasting System of Illinois,
    Inc. (incorporated by reference to Exhibit 10.5 of the
    Companys 8/9/04 Quarterly Report).                                                                                                 
| | 10    | .93  |  |  |  | Asset Purchase Agreement dated as of August 17, 2004
    between Styles Media Group, LLC and Spanish Broadcasting System
    Southwest, Inc. (incorporated by reference to Exhibit 10.1
    of the Companys Quarterly Report on Form 8-K filed
    August 23, 2004).                                                              
| | 10    | .94  |  |  |  | Merger Agreement dated as of October 5, 2004 among Infinity
    Media Corporation, Infinity Broadcasting Corporation of
    San Francisco, Spanish Broadcasting System, Inc. and SBS
    Bay Area, LLC (incorporated by reference to Exhibit 10.1 of
    the Companys Quarterly Report on Form 8-K filed on
    October 12, 2004).
| | 10    | .95  |  |  |  | Stockholder Agreement dated as of October 5, 2004 among
    Spanish Broadcasting System, Inc., Infinity Media Corporation
    and Raúl Alarcón, Jr. (incorporated by reference
    to Exhibit 10.2 of the Companys Quarterly Report on
    Form 8-K filed on October 12, 2004).                                                   
| | 10    | .96  |  |  |  | Local Marketing Agreement dated as of October 5, 2004
    between Infinity Broadcasting Corporation of San Francisco
    and SBS Bay Area, LLC (incorporated by reference to
    Exhibit 10.3 of the Companys Quarterly Report on Form
    8-K filed on October 12, 2004).                                                        
| | 10    | .97  |  |  |  | Time Brokerage Agreement dated as of August 17, 2004
    between Spanish Broadcasting System Southwest, Inc. and Styles
    Media Group, LLC (incorporated by reference to Exhibit 10.3
    of the Companys Quarterly Report on Form 8-K filed on
    November 9, 2004).                                                          
| | 10    | .98  |  |  |  | Warrant to Purchase Series C Preferred Stock of Spanish
    Broadcasting System, Inc. dated December 23, 2004 by the
    Company in favor of Infinity Media Corporation (incorporated by
    reference to Exhibit 4.2 of the Companys Quarterly
    Report on Form 8-K filed on December 27, 2004).                               
| | 10    | .99  |  |  |  | Registration Rights Agreement dated as of December 23, 2004
    between Spanish Broadcasting System, Inc. and Infinity Media
    Corporation (incorporated by reference to Exhibit 4.3 of
    the Companys Quarterly Report on Form 8-K filed on
    December 27, 2004).                                                          
| | 14    | .1   |  |  |  | Code of Business Conduct and Ethics (incorporated by reference
    to Exhibit 14.1 of the Companys 2004 Form 10-K).                                                                                                                                                                                                               
| | 21    | .1   |  |  |  | List of Subsidiaries of the Company.                                                                                                                                                                                                                                                                                               
| | 24    | .1   |  |  |  | Power of Attorney (included on the signature page of this Annual
    Report on Form 10-K).                                                                                                                                                                                                                                         
| | 31(i) | .1   |  |  |  | Chief Executive Officers Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                             
| | 31(i) | .2   |  |  |  | Chief Financial Officers Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                             
| | 32    | .1   |  |  |  | Chief Executive Officers Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                          
| | 32    | .2   |  |  |  | Chief Financial Officers Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                          






|  |                                                                                                                    
|- | -------------------------------------------------------------------------------------------------------------------
|* | Indicates a management contract or compensatory plan or
    arrangement, as required by Item 15(a)(3) of Form 10-K.



---



##### 



SIGNATURES






| |                                  
| | ---------------------------------
| | Spanish Broadcasting System, Inc.



| |     |                          
| | --- | -------------------------
| | By: | /s/ Raúl
    Alarcón, Jr.

| |                                   
| | ----------------------------------
| |                                   
| | Name:        Raúl
    Alarcón, Jr.

| |        |                                                                                
| | ------ | -------------------------------------------------------------------------------
| | Title: | Chairman of the Board of Directors, 
     Chief Executive Officer and President





|                                                           |  |                                                                                                                  
|---------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------
|Signature                                                  |  |                                                                                                                  
|                                                           |  |                                                                                                                  
|                                                          
|/s/ Raúl
    Alarcón, Jr.Raúl
    Alarcón, Jr.             |  | Chairman of the Board of Directors, Chief Executive Officer and
    President (principal executive officer)      
|                                                          
|/s/ Joseph A.
    GarcíaJoseph
    A. García               |  | Executive Vice President, Chief Financial Officer, and Secretary
    (principal financial and accounting officer)
|                                                          
|/s/ Pablo Raúl
    Alarcón, Sr.Pablo
    Raúl Alarcón, Sr. |  | Director                                                                                                         
|                                                          
|/s/ Dan MasonDan
    Mason                                 |  | Director                                                                                                         
|                                                          
|/s/ Antonio S.
    FernandezAntonio
    S. Fernandez       |  | Director                                                                                                         
|                                                          
|/s/ Jose A. VillamilJose
    A. Villamil                   |  | Director                                                                                                         
|                                                          
|/s/ Jason L. ShrinskyJason
    L. Shrinsky                 |  | Director                                                                                                         



---



##### 



EXHIBIT INDEX




| |     |          
| | --- | ---------
| | (a) | Exhibits:

| |   |     |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | --- |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3 | .1  |  |  |  | Third Amended and Restated Certificate of Incorporation of
    Spanish Broadcasting System, Inc. (the Company),
    dated September 29, 1999 (incorporated by reference to the
    Companys 1999 Registration Statement on Form S-1
    (Commission File No. 333-85499) (the 1999
    Registration Statement)) (Exhibit A to this exhibit
    is incorporated by reference to the Companys Current
    Report on Form 8-K, dated March 25, 1996 (the 1996
    Current Report).
| | 3 | .2  |  |  |  | Certificate of Amendment to the Third Amended and Restated
    Certificate of Incorporation of the Company, dated
    September 29, 1999 (incorporated by reference to
    Exhibit 3.2 of the Companys 1999 Registration
    Statement).                                                                                                                                                                                                                                             
| | 3 | .3  |  |  |  | Amended and Restated By-Laws of the Company (incorporated by
    reference to Exhibit 3.3 of the Companys 1999
    Registration Statement).                                                                                                                                                                                                                                                                                                                                          
| | 3 | .4  |  |  |  | Certificate of Elimination of
    141/4% Senior
    Exchangeable Preferred Stock, Series A of the Company,
    dated October 28, 2003 (incorporated by reference to
    Exhibit 3.3 of the Companys Quarterly Report on Form
    10-Q, dated November 14, 2003 (the 11/14/03 Quarterly
    Report)).                                                                                                                                                                               
| | 4 | .1  |  |  |  | Article V of the Third Amended and Restated Certificate of
    Incorporation of the Company, dated September 29, 1999
    (incorporated by reference to Exhibit 3.1 of the
    Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                
| | 4 | .2  |  |  |  | Certificate of Designations dated October 29, 2003 Setting
    Forth the Voting Power, Preferences and Relative, Participating,
    Optional and Other Special Rights and Qualifications,
    Limitations and Restrictions of the
    103/4%
    Series A Cumulative Exchangeable Redeemable Preferred Stock
    of Spanish Broadcasting System, Inc. (incorporated by reference
    to Exhibit 4.1 of the Companys 11/14/03 Quarterly
    Report).                                  
| | 4 | .3  |  |  |  | Certificate of Designations dated October 29, 2003 Setting
    Forth the Voting Power, Preferences and Relative, Participating,
    Optional and Other Special Rights and Qualifications,
    Limitations and Restrictions of the
    103/4%
    Series B Cumulative Exchangeable Redeemable Preferred Stock
    of Spanish Broadcasting System, Inc. (incorporated by reference
    to Exhibit 4.2 of the Companys 11/14/03 Quarterly
    Report).                                  
| | 4 | .4  |  |  |  | Indenture dated June 29, 1994 among the Company, IBJ
    Schroder Bank & Trust Company, as Trustee, the
    Guarantors named therein and the Purchasers named therein
    (incorporated by reference to Exhibit 4.1 of the
    Companys 1994 Registration Statement on Form S-4 (the
    1994 Registration Statement).                                                                                                                                                             
| | 4 | .5  |  |  |  | First Supplemental Indenture dated as of March 25, 1996 to
    the Indenture dated as of June 29, 1994 among the Company,
    the Guarantors named therein and IBJ Schroder Bank &
    Trust Company, as Trustee (incorporated by reference to the 1996
    Current Report).                                                                                                                                                                                                          
| | 4 | .6  |  |  |  | Second Supplemental Indenture dated as of March 1, 1997 to
    the Indenture dated as of June 29, 1994 among the Company,
    the Guarantors named therein and IBJ Schroder Bank &
    Trust Company, as Trustee (incorporated by reference to the 1996
    Current Report).                                                                                                                                                                                                          
| | 4 | .7  |  |  |  | Supplemental Indenture dated as of October 21, 1999 to the
    Indenture dated as of June 29, 1994 among the Company, the
    Guarantors named therein and IBJ Schroder Bank & Trust
    Company, as Trustee (incorporated by reference to the
    Companys 1999 Registration Statement).                                                                                                                                                                                            
| | 4 | .8  |  |  |  | Indenture with respect to
    95/8% Senior
    Subordinated Notes due 2009 with The Bank of New York as
    Trustee, dated November 2, 1999 (incorporated by reference
    to the Current Report on Form 8-K dated November 2, 1999
    (the 1999 Current Report)).                                                                                                                                                                                                                 
| | 4 | .9  |  |  |  | Indenture with respect to
    95/8% Senior
    Subordinated Notes due 2009 with the Bank of New York as
    Trustee, dated June 8, 2001 (incorporated by reference to
    the Companys Registration Statement on Form S-3,
    filed on June 25, 2001 (the 2001 Form S-3).                                                                                                                                                                                                         
| | 4 | .10 |  |  |  | Form of stock certificate for the Class A common stock of
    the Company (incorporated by reference to the Companys
    1999 Registration Statement).                                                                                                                                                                                                                                                                                                                               
| | 4 | .11 |  |  |  | Certificate of Elimination of
    141/4%
    of Senior Exchangeable Preferred Stock, Series A of the
    Company, dated October 28, 2003 (incorporated by reference
    to Exhibit 3.3 of the Companys Quarterly Report on
    Form 10-Q filed November 14, 2003).                                                                                                                                                                                                                   



---



##### 



| |    |      |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | ---- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4  | .12  |  |  |  | Certificate of Designation Setting Forth the Voting Power,
    Preferences and Relative, Participating, Optional and Other
    Special Rights and Qualifications, Limitations and Restrictions
    of the Series C Convertible Preferred Stock of the Company
    (Certificate of Designation of Series C Preferred
    Stock) (incorporated by reference to Exhibit 4.1 of
    the Companys Quarterly Report on Form 8-K filed on
    December 27, 2004).                                             
| | 4  | .13  |  |  |  | Certificate of Correction to Certificate of Designation of
    Series C Preferred Stock of the Company dated
    January 7, 2005.                                                                                                                                                                                                                                                                                                                                                                         
| | 10 | .1   |  |  |  | Warrant Agreement dated as of March 15, 1997 among the
    Company and IBJ Schroder Bank & Trust Company, as
    Warrant Agent (incorporated by reference to the 1996 Current
    Report).                                                                                                                                                                                                                                                                                                                
| | 10 | .2*  |  |  |  | Common Stock Registration Rights and Stockholders Agreement
    dated as of June 29, 1994 among the Company and certain
    Management Stockholders named therein (incorporated by reference
    to the 1994 Registration Statement).                                                                                                                                                                                                                                                                     
| | 10 | .3*  |  |  |  | Amended and Restated Employment Agreement dated as of
    October 25, 1999, by and between the Company and Raúl
    Alarcón, Jr. (incorporated by reference to the
    Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                                            
| | 10 | .4*  |  |  |  | Employment Agreement dated February 5, 1997 between the
    Company and Carey Davis (incorporated by reference to the
    Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                                                                                         
| | 10 | .5*  |  |  |  | Employment Agreement dated as of October 25, 1999, by and
    between the Company and Joseph A. García (incorporated by
    reference to the Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                                                                      
| | 10 | .9   |  |  |  | Ground Lease dated December 18, 1995 between Louis Viola
    Company and SBS-NJ (incorporated by reference to the 1996
    Current Report).                                                                                                                                                                                                                                                                                                                                                               
| | 10 | .10  |  |  |  | Ground Lease dated December 18, 1995 between Frank F. Viola
    and Estate of Thomas C. Viola and SBS-NJ (incorporated by
    reference to the 1996 Current Report).                                                                                                                                                                                                                                                                                                                                      
| | 10 | .11  |  |  |  | Lease and License Agreement dated February 1, 1991 between
    Empire State Building Company, as landlord, and SBS-NY, as
    tenant (incorporated by reference to Exhibit 10.15.1 of the
    1994 Registration Statement).                                                                                                                                                                                                                                                                               
| | 10 | .12  |  |  |  | Modification of Lease and License dated June 30, 1992
    between Empire State Building Company and SBS-NY related to
    WSKQ-FM (incorporated by reference to Exhibit 10.15.2 of
    the 1994 Registration Statement).                                                                                                                                                                                                                                                                                  
| | 10 | .13  |  |  |  | Lease and License Modification and Extension Agreement dated as
    of June 30, 1992 between Empire State Building Company, as
    landlord, and SBS-NY as tenant (incorporated by reference to
    Exhibit 10.15.3 of the 1994 Registration Statement).                                                                                                                                                                                                                                                  
| | 10 | .14  |  |  |  | Lease Agreement dated June 1, 1992 among Raúl
    Alarcón, Sr., Raúl Alarcón, Jr., and
    SBS-Fla (incorporated by reference to Exhibit 10.30 of the
    1994 Registration Statement).                                                                                                                                                                                                                                                                                                                   
| | 10 | .15  |  |  |  | Agreement of Lease dated as of March 1, 1996. No.
    WT-174-A119 1067 between The Port Authority of New Jersey and
    SBS of Greater New York, Inc. as assignee of Park Radio
    (incorporated by reference to the 1996 Current Report).                                                                                                                                                                                                                                                               
| | 10 | .16  |  |  |  | Asset Purchase Agreement dated as of July 2, 1997, by and
    between Spanish Broadcasting System, Inc. (New Jersey), Spanish
    Broadcasting System of California, Inc., Spanish Broadcasting
    System of Florida, Inc., Spanish Broadcasting System, Inc., and
    One-on-One Sports, Inc. (incorporated by reference to
    Exhibit 10.62 of the Companys Registration Statement
    on Form S-4 (Commission File No. 333-26295)).                                                                 
| | 10 | .17  |  |  |  | Amendment No. 1 dated as of September 29, 1997 to the
    Asset Purchase Agreement dated as of July 2, 1997, by and
    between Spanish Broadcasting System, Inc. (New Jersey), Spanish
    Broadcasting System of California, Inc., Spanish Broadcasting
    System of Florida, Inc., Spanish Broadcasting System, Inc., and
    One-on-One Sports, Inc. (incorporated by reference to the
    Companys Registration Statement on Form S-1, dated
    January 21, 1999 (Commission File No. 333-29449)).
| | 10 | .18  |  |  |  | Extension of lease of a Condominium Unit (Metropolitan Tower
    Condominium) between Raúl Alarcón, Jr.
    (Landlord) and Spanish Broadcasting System, Inc.
    (Tenant) (incorporated by reference to the
    Companys 1998 Annual Report on Form 10-K).                                                                                                                                                                                                                                           
| | 10 | .19* |  |  |  | Indemnification Agreement with Raúl Alarcón, Jr.
    dated as of November 2, 1999 (incorporated by reference to
    the 1999 Current Report).                                                                                                                                                                                                                                                                                                                                                             



---



##### 



| |    |      |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- | ---- |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10 | .20  |  |  |  | Indemnification Agreement with Román Martínez IV
    dated as of November 2, 1999 (incorporated by reference to
    the 1999 Current Report).                                                                                                                                                                                                                                                                                                                                                   
| | 10 | .21  |  |  |  | Indemnification Agreement with Jason L. Shrinsky dated as of
    November 2, 1999 (incorporated by reference to the 1999
    Current Report).                                                                                                                                                                                                                                                                                                                                                   
| | 10 | .22* |  |  |  | Spanish Broadcasting System 1999 Stock Option Plan (incorporated
    by reference to the Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                                                                                                                
| | 10 | .23* |  |  |  | Spanish Broadcasting System 1999 Company Stock Option Plan for
    Nonemployee Directors (incorporated by reference to the
    Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                                                                          
| | 10 | .24  |  |  |  | Form of Lock-Up Letter Agreement (incorporated by reference in
    the Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                                                                                                                                  
| | 10 | .25* |  |  |  | Option Grant not under the Stock Option Plans with Arnold
    Sheiffer, dated October 27, 1999 (incorporated by reference
    to the 1999 Current Report).                                                                                                                                                                                                                                                                                                                                      
| | 10 | .26  |  |  |  | Stock Purchase Agreement, dated as of May 8, 2000, by and
    between New World Broadcasters Corp., a Texas corporation, 910
    Broadcasting Corp., a Texas corporation, and Spanish
    Broadcasting System, Inc., a Delaware corporation (incorporated
    by reference to Exhibit 10.2 of the Companys Amended
    Quarterly Report).                                                                                                                                                      
| | 10 | .27  |  |  |  | Time Brokerage Agreement, dated May 8, 2000, by and among,
    New World Broadcasters Corp., a Texas corporation, 910
    Broadcasting Corp., a Texas corporation, and Spanish
    Broadcasting System of San Antonio, Inc., a Delaware
    corporation, and Spanish Broadcasting System, Inc., a Delaware
    corporation (incorporated by reference to Exhibit 10.5 of
    the Companys Quarterly Report on Form 10-Q, dated
    August 9, 2000 (the Companys 2000 Quarterly
    Report)).
| | 10 | .28  |  |  |  | Credit Agreement, dated as of July 6, 2000, among Spanish
    Broadcasting System, Inc., a Delaware corporation, the several
    banks and other financial institutions or entities from time to
    time party to the Credit Agreement and Lehman Commercial Paper
    Inc., as administrative agent (incorporated by reference to
    Exhibit 10.44 of the Companys Annual Report on Form
    10-K for fiscal year 2000 (the 2000 Form 10-K).                                              
| | 10 | .29  |  |  |  | Guarantee and Collateral Agreement made by Spanish Broadcasting
    System, Inc. and certain of its subsidiaries in favor of Lehman
    Commercial Paper, Inc. as Administrative Agent, dated as of
    July 6, 2000 (incorporated by reference to
    Exhibit 10.45 of the Companys 2000 Form 10-K).                                                                                                                                                                                          
| | 10 | .30* |  |  |  | Employment Agreement dated August 31, 2000, between William
    Tanner and the Company (incorporated by reference to
    Exhibit 10.47 of the Companys 2000 Form 10-K).                                                                                                                                                                                                                                                                                                                        
| | 10 | .31  |  |  |  | Deed of Constitution of Mortgage, Cadena Estereotempo, Inc., as
    Mortgagor, and Banco Bilbao Vizcaya Puerto Rico, as Mortgagee
    (incorporated by reference to Exhibit 10.49 of the
    Companys 2000 Form 10-K).                                                                                                                                                                                                                                                                         
| | 10 | .32  |  |  |  | Lease Agreement by and between the Company and Irradio Holdings,
    Ltd. made as of December 14, 2000 (incorporated by
    reference to Exhibit 10.50 of the Companys 2000 Form
    10-K).                                                                                                                                                                                                                                                                                                    
| | 10 | .33  |  |  |  | First Addendum to Lease between the Company and Irradio
    Holdings, Ltd. as of December 14, 2000 (incorporated by
    reference to Exhibit 10.51 of the Companys 2000 Form
    10-K).                                                                                                                                                                                                                                                                                                        
| | 10 | .34  |  |  |  | Asset Purchase Agreement dated as of November 2, 2000 by
    and between International Church of the FourSquare Gospel and
    the Company (incorporated by reference to Exhibit 10.1 of
    the Companys 2000 Form 10-K).                                                                                                                                                                                                                                                                     
| | 10 | .35  |  |  |  | Addendum to Asset Purchase Agreement, dated March 13, 2001,
    by and between International Church of the FourSquare Gospel and
    the Company (incorporated by reference to Exhibit 10.2 of
    the Companys Quarterly Report on Form 10-Q filed on
    May 9, 2001 (5/9/01 Quarterly Report)).                                                                                                                                                                                           
| | 10 | .36  |  |  |  | Time Brokerage Agreement, dated March 13, 2001, by and
    between International Church of the FourSquare Gospel and the
    Company (incorporated by reference to Exhibit 10.3 of the
    Companys 5/9/01 Quarterly Report).                                                                                                                                                                                                                                                                  
| | 10 | .37  |  |  |  | 93.5 Time Brokerage Agreement, dated March 13, 2001, by and
    between Spanish Broadcasting System Southwest, Inc. and
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.4 of the Companys 5/9/01
    Quarterly Report).                                                                                                                                                                                                                         



---



##### 



| |    |      |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                              
| | -- | ---- |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10 | .38  |  |  |  | Radio Network Affiliation Agreement, dated April 5, 2001,
    between Clear Channel Broadcasting, Inc. and SBS of
    San Francisco, Inc. (incorporated by reference to
    Exhibit 10.5 of the Companys 5/9/01 Quarterly Report).                                                                                                                                                                          
| | 10 | .39  |  |  |  | First Amendment to Credit Agreement, dated as of March 5,
    2001, by and among the Company, the lenders party to the Credit
    Agreement dated as of July 6, 2000 and Lehman Commercial
    Paper, Inc. (incorporated by reference to Exhibit 10.1 of
    the Companys 5/9/01 Quarterly Report).                                                                                                         
| | 10 | .40  |  |  |  | Purchase Agreement dated May 24, 2001 between the Company
    and Lehman Brothers Inc. with respect to
    95/8% Senior
    Subordinated Notes due 2009 (incorporated by reference to the
    Companys 2001 Form S-3).                                                                                                                                                                                      
| | 10 | .41  |  |  |  | Registration Rights Agreement dated June 8, 2001 between
    the Company and Lehman Brothers Inc. with respect to
    95/8% Senior
    Subordinated Notes due 2009 (incorporated be reference to the
    Companys 2001 Form S-3).                                                                                                                                                                           
| | 10 | .42  |  |  |  | Indemnification Agreement with Castor Fernandez dated as of
    August 9, 2001 (incorporated by reference to
    Exhibit 10.47 to the Companys Annual Report on Form
    10-K filed December 31, 2001).                                                                                                                                                                                                     
| | 10 | .43  |  |  |  | Form of Indemnification Agreement with Carl Parmer dated as of
    August 9, 2001 (incorporated by reference to
    Exhibit 10.48 to the Companys Annual Report on Form
    10-K filed December 31, 2001).                                                                                                                                                                                                  
| | 10 | .44* |  |  |  | Stock Option Agreement dated as of January 15, 2001 between
    the Company and Joseph A. García (incorporated by reference
    to Exhibit 10.49 to the Companys Annual Report on
    Form 10-K filed December 31, 2001).                                                                                                                                                                                   
| | 10 | .46* |  |  |  | Form of Stock Option Agreement dated as of October 29, 2001
    between Spanish Broadcasting System, Inc. and Carl Parmer
    (incorporated by reference to Exhibit 10.51 to the
    Companys Annual Report on Form 10-K filed
    December 31, 2001).                                                                                                                                                      
| | 10 | .47  |  |  |  | Amendment dated as of February 8, 2002 to Asset Purchase
    Agreement dated as of November 2, 2000 by and between
    International Church of the FourSquare Gospel and Spanish
    Broadcasting System, Inc., as amended by an Addendum dated
    March 13, 2001 (incorporated by reference to
    Exhibit 10.1 to the Companys Quarterly Transition
    Report on Form 10-Q filed February 13, 2002).    
| | 10 | .48  |  |  |  | Amendment No. 1 dated as of February 8, 2002 to Time
    Brokerage Agreement dated as of March 13, 2001 by and
    between International Church of the FourSquare Gospel, as
    Licensee, and Spanish Broadcasting System, Inc., as Time Broker
    (incorporated by reference to Exhibit 10.2 to the
    Companys Quarterly Transition Report on Form 10-Q filed
    February 13, 2002).                  
| | 10 | .49  |  |  |  | Amendment No. 1 dated as of February 8, 2002 to the
    93.5 Time Brokerage Agreement dated as of March 13, 2001 by
    and between Spanish Broadcasting System SouthWest, Inc., as
    Licensee and International Church of the FourSquare Gospel, as
    Time Broker (incorporated by reference to Exhibit 10.3 to
    the Companys Quarterly Transition Report on Form 10-Q
    filed February 13, 2002).
| | 10 | .50  |  |  |  | Warrant dated February 8, 2002 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.1 to the Companys Quarterly
    Report on Form 10-Q filed May 2, 2002).                                                                                                                                                                            
| | 10 | .51* |  |  |  | Stock Option Agreement dated as of January 16, 2002 between
    the Company and Joseph A. García (incorporated by reference
    to Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q filed May 2, 2002).                                                                                                                                                                                       
| | 10 | .52  |  |  |  | Asset Purchase Agreement dated June 4, 2002 by and among
    the Company, KTCY Licensing, Inc. and Entravision 
    Texas Limited Partnership (incorporated by reference to
    Exhibit 10.1 to the Companys Quarterly Report on Form
    10-Q filed August 14, 2002).                                                                                                                                     
| | 10 | .53  |  |  |  | Time Brokerage Agreement dated as of June 4, 2002 between
    KTCY Licensing, Inc. as Licensee and Entravision Communications
    Corporation as Programmer (incorporated by reference to
    Exhibit 10.2 to the Companys Quarterly Report on Form
    10-Q filed August 14, 2002).                                                                                                                        
| | 10 | .54* |  |  |  | Companys 1999 Stock Option Plan as amended on May 6,
    2002 (incorporated by reference to Exhibit 10.3 to the
    Companys Quarterly Report on Form 10-Q filed
    August 14, 2002).                                                                                                                                                                                                                     



---



##### 



| |    |      |  |   |  |                                                                                                                                                                                                                                                                                                                                               
| | -- | ---- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10 | .55* |  |  |  | Companys 1999 Stock Option Plan for Non-Employee Directors
    as amended on May 6, 2002 (incorporated by reference to
    Exhibit 10.4 to the Companys Quarterly Report on Form
    10-Q filed August 14, 2002).                                                                                                                           
| | 10 | .56* |  |  |  | Stock Option Agreement dated as of August 30, 2002 between
    the Company and William B. Tanner (incorporated by reference to
    Exhibit 10.1 to the Companys Quarterly Report on Form
    10-Q filed November 13, 2002).                                                                                                                  
| | 10 | .57* |  |  |  | Stock Option Agreement dated as of October 29, 2002 between
    the Company and Raúl Alarcón, Jr. (incorporated
    by reference to Exhibit 10.2 to the Companys
    Quarterly Report on Form 10-Q filed November 13, 2002).                                                                                                                 
| | 10 | .58  |  |  |  | Asset Purchase Agreement dated as of December 31, 2002 by
    and among Spanish Broadcasting System of Illinois, Inc., Big
    City Radio, Inc. and Big City Radio-CHI, L.L.C. (incorporated by
    reference to Exhibit 10.59 to the Companys Annual
    Report on Form 10-K filed March 31, 2003 (the 2003
    Form 10-K)).              
| | 10 | .59  |  |  |  | Time Brokerage Agreement dated as of December 31, 2002
    between Big City Radio-CHI, L.L.C. as Licensee and Spanish
    Broadcasting System of Illinois, Inc. as Programmer
    (incorporated by reference to Exhibit 10.60 to the
    Companys 2003 Form 10-K).                                                                           
| | 10 | .60  |  |  |  | Guaranty Agreement dated as of December 31, 2002 by the
    Company in favor of Big City Radio, Inc. and Big City Radio-CHI,
    L.L.C. (incorporated by reference to Exhibit 10.61 to the
    Companys 2003 Form 10-K).                                                                                                                     
| | 10 | .61  |  |  |  | Warrant dated March 31, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.4 of the Companys Quarterly
    Report on Form 10-Q, dated May 15, 2003 (the 5/15/03
    Quarterly Report)).                                                                        
| | 10 | .62  |  |  |  | Warrant dated April 30, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.5 of the Companys 5/15/03
    Quarterly Report).                                                                                                                                      
| | 10 | .63  |  |  |  | Warrant dated May 31, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.1 of the Companys Quarterly
    Report on Form 10-Q, dated August 13, 2003 (the
    8/13/03 Quarterly Report)).                                                                       
| | 10 | .64  |  |  |  | Warrant dated June 30, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.2 of the Companys 8/13/03
    Quarterly Report).                                                                                                                                       
| | 10 | .65  |  |  |  | Warrant dated July 31, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.3 of the Companys 8/13/03
    Quarterly Report).                                                                                                                                       
| | 10 | .66  |  |  |  | Asset Purchase Agreement dated as of September 18, 2003
    between Spanish Broadcasting System, Inc. and Border Media
    Partners, LLC (incorporated by reference to Exhibit 10.1 of
    the Companys Current Report on Form 8-K, dated
    September 25, 2003).                                                                           
| | 10 | .67  |  |  |  | Asset Purchase Agreement dated as of October 2, 2003
    between Spanish Broadcasting System, Inc., Spanish Broadcasting
    System-San Francisco, Inc., KPTI Licensing, Inc. and 3
    Point Media-San Francisco, LLC (incorporated by reference
    to Exhibit 10.1 of the Companys Current Report on
    Form 8-K, dated October 9, 2003).
| | 10 | .68  |  |  |  | Warrant dated August 31, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.1 of the Companys 11/14/03
    Quarterly Report).                                                                                                                                    
| | 10 | .69  |  |  |  | Warrant dated September 30, 2003 by the Company in favor of
    International Church of the FourSquare Gospel (incorporated by
    reference to Exhibit 10.2 of the Companys 11/14/03
    Quarterly Report).                                                                                                                                 
| | 10 | .70  |  |  |  | Credit Agreement between the Company and Merrill Lynch, Pierce
    Fenner & Smith Incorporated, Deutsche Bank Securities
    Inc. and Lehman Commercial Paper Inc. dated October 30,
    2003 (incorporated by reference to Exhibit 10.3 of the
    Companys 11/14/03 Quarterly Report).                                                     
| | 10 | .71  |  |  |  | Guarantee and Collateral Agreement between the Company and
    certain of its subsidiaries in favor of Lehman Commercial Paper
    Inc. dated October 30, 2003 (incorporated by reference to
    Exhibit 10.4 of the Companys 11/14/03 Quarterly
    Report).                                                                                



---



##### 



| |    |      |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                              
| | -- | ---- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10 | .72  |  |  |  | Assignment of Leases and Rents by the Company in favor of Lehman
    Commercial Paper Inc. dated October 30, 2003 (incorporated
    by reference to Exhibit 10.5 of the Companys 11/14/03
    Quarterly Report).                                                                                                                                                                            
| | 10 | .73  |  |  |  | Deed of Trust, Assignment of Leases and Rents, Security
    Agreement and Fixture Filing by the Company in favor of Lehman
    Commercial Paper Inc. dated October 30, 2003 (incorporated
    by reference to Exhibit 10.6 of the Companys 11/14/03
    Quarterly Report).                                                                                                                  
| | 10 | .74  |  |  |  | Transmission Facilities Lease between the Company and
    International Church of the FourSquare Gospel, dated
    October 30, 2003 (incorporated by reference to
    Exhibit 10.7 of the Companys 11/14/03 Quarterly
    Report).                                                                                                                                                          
| | 10 | .75  |  |  |  | Purchase Agreement dated October 30, 2003 between the
    Company and Merrill Lynch, Pierce Fenner & Smith
    Incorporated, Deutsche Bank Securities Inc. and Lehman Brothers
    Inc. with respect to
    103/4%
    Series A Cumulative Exchangeable Redeemable Preferred Stock
    (incorporated by reference to Exhibit 10.8 of the
    Companys 11/14/03 Quarterly Report).           
| | 10 | .76* |  |  |  | Registration Rights Agreement dated October 30, 2003
    between the Company and Merrill Lynch, Pierce Fenner &
    Smith Incorporated, Deutsche Bank Securities Inc. and Lehman
    Brothers Inc. with respect to
    103/4%
    Series A Cumulative Exchangeable Redeemable Preferred Stock
    (incorporated by reference to Exhibit 10.9 of the
    Companys 11/14/03 Quarterly Report).
| | 10 | .77* |  |  |  | Nonqualified Stock Option Agreement dated as of July 11,
    2003 between the Company and Jack Langer (incorporated by
    reference to Exhibit 10.74 of the Companys Annual
    Report on Form 10-K for fiscal year 2004 (the 2004
    Form 10-K)).                                                                                                                                      
| | 10 | .78* |  |  |  | Nonqualified Stock Option Agreement dated as of July 11,
    2003 between the Company and Dan Mason (incorporated by
    reference to Exhibit 10.75 of the Companys 2004 Form
    10-K).                                                                                                                                                                                                    
| | 10 | .79* |  |  |  | Amended and Restated Employment Agreement dated October 31,
    2003 between the Company and Marko Radlovic (incorporated by
    reference to Exhibit 10.81 of the Companys 2004 Form
    10-K).                                                                                                                                                                                            
| | 10 | .80* |  |  |  | Incentive Stock Option Agreement dated September 8, 2003
    between the Company and William B. Tanner Jr. (incorporated by
    reference to Exhibit 10.76 of the Companys 2004 Form
    10-K).                                                                                                                                                                                             
| | 10 | .81* |  |  |  | Nonqualified Stock Option Agreement dated September 8, 2003
    between the Company and William B. Tanner, Jr.
    (incorporated by reference to Exhibit 10.77 of the
    Companys 2004 Form 10-K).                                                                                                                                                                                         
| | 10 | .82* |  |  |  | Nonqualified Stock Option Agreement dated October 27, 2003
    between the Company and Raúl Alarcón, Jr.
    (incorporated by reference to Exhibit 10.78 of the
    Companys 2004 Form 10-K).                                                                                                                                                                                               
| | 10 | .83* |  |  |  | Nonqualified Stock Option Agreement dated December 10, 2003
    between the Company and Marko Radlovic (incorporated by
    reference to Exhibit 10.79 of the Companys 2004 Form
    10-K).                                                                                                                                                                                                 
| | 10 | .84* |  |  |  | Incentive Stock Option Agreement dated December 10, 2003
    between the Company and Marko Radlovic (incorporated by
    reference to Exhibit 10.80 of the Companys 2004 Form
    10-K).                                                                                                                                                                                                    
| | 10 | .86* |  |  |  | Non-Qualified Stock Option Agreement dated as of March 3,
    2004 between the Company and Joseph A. García (incorporated
    by reference to Exhibit 10.1 to the Companys
    Quarterly Report on Form 10-Q filed May 10, 2004 (the
    5/10/04 Quarterly Report)).                                                                                                                      
| | 10 | .87* |  |  |  | Incentive Stock Option Agreement dated as of March 3, 2004
    between the Company and Joseph A. García (incorporated
    by reference to Exhibit 10.2 to the Companys 5/10/04
    Quarterly Report).                                                                                                                                                                                       
| | 10 | .88  |  |  |  | Amendment dated as of April 15, 2004, to the Asset Purchase
    Agreement dated as of October 2, 2003 between Spanish
    Broadcasting System, Inc., Spanish Broadcasting
    System-San Francisco, Inc., KPTI Licensing, Inc. and 3
    Point Media-San Francisco, LLC (incorporated by reference
    to Exhibit 10.3 of the Companys 5/10/04 Quarterly
    Report).                       
| | 10 | .89  |  |  |  | Time Brokerage Agreement dated as of April 15, 2004 between
    KPTI Licensing, Inc., and Spanish Broadcasting
    System-San Francisco, Inc. and 3 Point
    Media-San Francisco, LLC (incorporated by reference to
    Exhibit 10.4 of the Companys 5/10/04 Quarterly
    Report).                                                                                                        



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##### 



| |       |      |  |   |  |                                                                                                                                                                                                                                                                                                                                    
| | ----- | ---- |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10    | .90* |  |  |  | Stock Option Letter Agreement dated as of July 2, 2004
    between the Company and Antonio S. Fernandez (incorporated by
    reference to Exhibit 10.1 of the Companys Quarterly
    Report on Form 10-Q filed August 9, 2004 (the
    8/9/04 Quarterly Report)).                                                               
| | 10    | .91* |  |  |  | Stock Option Letter Agreement dated as of July 2, 2004
    between the Company and Jose Antonio Villamil (incorporated by
    reference to Exhibit 10.2 of the Companys 8/9/04
    Quarterly Report).                                                                                                                             
| | 10    | .92  |  |  |  | Asset Purchase Agreement dated as of July 26, 2004 between
    Newsweb Corporation and Spanish Broadcasting System of Illinois,
    Inc. (incorporated by reference to Exhibit 10.5 of the
    Companys 8/9/04 Quarterly Report).                                                                                                 
| | 10    | .93  |  |  |  | Asset Purchase Agreement dated as of August 17, 2004
    between Styles Media Group, LLC and Spanish Broadcasting System
    Southwest, Inc. (incorporated by reference to Exhibit 10.1
    of the Companys Quarterly Report on Form 8-K filed
    August 23, 2004).                                                              
| | 10    | .94  |  |  |  | Merger Agreement dated as of October 5, 2004 among Infinity
    Media Corporation, Infinity Broadcasting Corporation of
    San Francisco, Spanish Broadcasting System, Inc. and SBS
    Bay Area, LLC (incorporated by reference to Exhibit 10.1 of
    the Companys Quarterly Report on Form 8-K filed on
    October 12, 2004).
| | 10    | .95  |  |  |  | Stockholder Agreement dated as of October 5, 2004 among
    Spanish Broadcasting System, Inc., Infinity Media Corporation
    and Raúl Alarcón, Jr. (incorporated by reference
    to Exhibit 10.2 of the Companys Quarterly Report on
    Form 8-K filed on October 12, 2004).                                                   
| | 10    | .96  |  |  |  | Local Marketing Agreement dated as of October 5, 2004
    between Infinity Broadcasting Corporation of San Francisco
    and SBS Bay Area, LLC (incorporated by reference to
    Exhibit 10.3 of the Companys Quarterly Report on Form
    8-K filed on October 12, 2004).                                                        
| | 10    | .97  |  |  |  | Time Brokerage Agreement dated as of August 17, 2004
    between Spanish Broadcasting System Southwest, Inc. and Styles
    Media Group, LLC (incorporated by reference to Exhibit 10.3
    of the Companys Quarterly Report on Form 8-K filed on
    November 9, 2004).                                                          
| | 10    | .98  |  |  |  | Warrant to Purchase Series C Preferred Stock of Spanish
    Broadcasting System, Inc. dated December 23, 2004 by the
    Company in favor of Infinity Media Corporation (incorporated by
    reference to Exhibit 4.2 of the Companys Quarterly
    Report on Form 8-K filed on December 27, 2004).                               
| | 10    | .99  |  |  |  | Registration Rights Agreement dated as of December 23, 2004
    between Spanish Broadcasting System, Inc. and Infinity Media
    Corporation (incorporated by reference to Exhibit 4.3 of
    the Companys Quarterly Report on Form 8-K filed on
    December 27, 2004).                                                          
| | 14    | .1   |  |  |  | Code of Business Conduct and Ethics (incorporated by reference
    to Exhibit 14.1 of the Companys 2004 Form 10-K).                                                                                                                                                                                                               
| | 21    | .1   |  |  |  | List of Subsidiaries of the Company.                                                                                                                                                                                                                                                                                               
| | 24    | .1   |  |  |  | Power of Attorney (included on the signature page of this Annual
    Report on Form 10-K).                                                                                                                                                                                                                                         
| | 31(i) | .1   |  |  |  | Chief Executive Officers Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                             
| | 31(i) | .2   |  |  |  | Chief Financial Officers Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                             
| | 32    | .1   |  |  |  | Chief Executive Officers Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                          
| | 32    | .2   |  |  |  | Chief Financial Officers Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                          






|  |                                                                                                                    
|- | -------------------------------------------------------------------------------------------------------------------
|* | Indicates a management contract or compensatory plan or
    arrangement, as required by Item 15(a)(3) of Form 10-K.