##### 



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




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##### 



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




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##### 



PART I  FINANCIAL INFORMATION
 ITEM 1. FINANCIAL STATEMENTS
 SUSQUEHANNA MEDIA CO. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30, 2005
    
    December 31, 2004(Unaudited)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    906
    
    
    $
    Accounts receivable, less allowance for doubtful
accounts of $2,079 in 2005 and $1,822 in 2004
    
    
    52,371
    
    
    
    50,332Other current assets
    
    
    6,193
    
    
    
    7,278Total Current Assets
    
    
    59,470
    
    
    
    57,610Property, Plant and Equipment, at costLand
    
    
    6,415
    
    
    
    6,233Buildings and improvements
    
    
    27,288
    
    
    
    26,722Equipment
    
    
    345,761
    
    
    
    334,471Construction-in-progress
    
    
    13,554
    
    
    
    14,872393,018
    
    
    
    382,298Accumulated depreciation and amortization
    
    
    197,337
    
    
    
    182,549Property, Plant and Equipment, net
    
    
    195,681
    
    
    
    199,749Intangible Assets and Goodwill, net
    
    
    508,002
    
    
    
    514,299Investments and Other Assets
    
    
    23,542
    
    
    
    19,323$
    786,695
    
    
    $
    790,981LIABILITIES AND STOCKHOLDERS DEFICITCurrent LiabilitiesCash overdrafts
    
    $
    
    
    
    $
    1,428Current portion of long-term debt
    
    
    8,716
    
    
    
    3,368Accounts payable
    
    
    9,899
    
    
    
    13,181Accrued employee-related costs
    
    
    13,358
    
    
    
    12,812Accrued income taxes
    
    
    3,760
    
    
    
    11,781Deferred income taxes
    
    
    5,336
    
    
    
    5,114Accrued interest
    
    
    7,773
    
    
    
    7,564Accrued franchise and licensing fees
    
    
    2,290
    
    
    
    2,864Deferred income
    
    
    3,804
    
    
    
    3,943Judgment payable
    
    
    10,134
    
    
    
    10,105Other current liabilities
    
    
    9,592
    
    
    
    8,206Total Current Liabilities
    
    
    74,662
    
    
    
    80,366Long-term Debt
    
    
    568,261
    
    
    
    573,864Other Liabilities
    
    
    14,913
    
    
    
    13,964Deferred Income Taxes
    
    
    77,703
    
    
    
    74,894Minority Interests
    
    
    61,156
    
    
    
    68,499Stockholders DeficitPreferred stock  Voting, 7% cumulative, $100 par
value, authorized 110,000 shares
    
    
    7,050
    
    
    
    7,050Common stock  Voting, $1 par value, authorized 1,100,000
shares
    
    
    1,100
    
    
    
    1,100Retained earnings
    
    
    89,971
    
    
    
    76,212Receivable from Parent
    
    
    (108,121
    )
    
    
    (104,968
    )Total Stockholders Deficit
    
    
    (10,000
    )
    
    
    (20,606
    )$
    786,695
    
    
    $
    790,981
  2




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##### 



SUSQUEHANNA MEDIA CO. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Three Months
    
    For the Six MonthsEnded June 30,
    
    Ended June 30,2005
    
    2004
    
    2005
    
    2004RevenuesRadio
    
    $
    62,207
    
    
    $
    64,233
    
    
    $
    110,665
    
    
    $
    110,912Cable
    
    
    48,807
    
    
    
    46,590
    
    
    
    96,539
    
    
    
    85,701Other
    
    
    771
    
    
    
    496
    
    
    
    1,888
    
    
    
    1,567Total revenues
    
    
    111,785
    
    
    
    111,319
    
    
    
    209,092
    
    
    
    198,180Operating ExpensesOperating and programming
    
    
    46,034
    
    
    
    42,865
    
    
    
    86,934
    
    
    
    77,453Selling
    
    
    12,053
    
    
    
    11,264
    
    
    
    22,553
    
    
    
    20,955General and administrative
    
    
    22,109
    
    
    
    21,585
    
    
    
    42,507
    
    
    
    41,263Impairment loss
    
    
    2,131
    
    
    
    
    
    
    
    2,131
    
    
    
    Depreciation and amortization
    
    
    11,153
    
    
    
    11,220
    
    
    
    22,672
    
    
    
    20,186Total operating expenses
    
    
    93,480
    
    
    
    86,934
    
    
    
    176,797
    
    
    
    159,857Operating Income
    
    
    18,305
    
    
    
    24,385
    
    
    
    32,295
    
    
    
    38,323Other Income (Expense)Interest expense
    
    
    (9,016
    )
    
    
    (7,990
    )
    
    
    (15,992
    )
    
    
    (16,833
    )Loss on extinguishment of debt
    
    
    
    
    
    
    (9,065
    )
    
    
    
    
    
    
    (9,065
    )Interest income on receivable from
Parent
    
    
    1,585
    
    
    
    1,656
    
    
    
    3,153
    
    
    
    3,312Gain on Sale of WABZ-FM
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    Other
    
    
    (355
    )
    
    
    233
    
    
    
    (260
    )
    
    
    296Income Before Income Taxes
    
    
    10,519
    
    
    
    9,219
    
    
    
    19,496
    
    
    
    16,033Provision for Income Taxes
    
    
    4,235
    
    
    
    3,487
    
    
    
    7,687
    
    
    
    6,060Income Before Minority Interests
    
    
    6,284
    
    
    
    5,732
    
    
    
    11,809
    
    
    
    9,973Minority Interests
    
    
    3,110
    
    
    
    (6,179
    )
    
    
    2,197
    
    
    
    (6,929
    )Net Income (Loss) and Comprehensive
Income (Loss)
    
    
    9,394
    
    
    
    (447
    )
    
    
    14,006
    
    
    
    3,044Preferred Dividends Declared
    
    
    (124
    )
    
    
    (123
    )
    
    
    (247
    )
    
    
    (247
    )Net Income (Loss) Available for
Common Shares
    
    $
    9,270
    
    
    $
    (570
    )
    
    $
    13,759
    
    
    $
    2,797
  3




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##### 



SUSQUEHANNA MEDIA CO. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For The Six Months EndedJune 30,2005
    
    2004CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    14,006
    
    
    $
    3,044Adjustments to reconcile net income to net cash:Depreciation and amortization
    
    
    22,672
    
    
    
    20,186Impairment loss
    
    
    2,131
    
    
    
    Deferred income taxes
    
    
    3,031
    
    
    
    2,131Minority interests
    
    
    (2,197
    )
    
    
    6,929Write-down of SusQtech accounts receivable
    
    
    629
    
    
    
    Loss on extinguishment of debt
    
    
    
    
    
    
    2,690Equity in (earnings) or loss of investees
    
    
    317
    
    
    
    (121
    )Gain on sale of WABZ-FM
    
    
    (300
    )
    
    
    Deferred financing amortization
    
    
    380
    
    
    
    840Changes in assets and liabilities:Increase in accounts receivable, net
    
    
    (2,668
    )
    
    
    (3,963
    )Decrease (increase) in other current assets
    
    
    1,085
    
    
    
    (9
    )Increase in receivable from Parent
    
    
    (3,153
    )
    
    
    (3,330
    )Decrease in accounts payable
    
    
    (3,282
    )
    
    
    (1,742
    )Increase (decrease) in accrued interest
    
    
    209
    
    
    
    (1,053
    )Increase (decrease) in accrued income taxes
    
    
    (8,021
    )
    
    
    2,951Increase in other current liabilities
    
    
    1,248
    
    
    
    9,016Increase in other liabilities
    
    
    949
    
    
    
    1,039Net cash provided by operating activities
    
    
    27,036
    
    
    
    38,608CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment, net
    
    
    (14,438
    )
    
    
    (16,739
    )Acquisitions
    
    
    
    
    
    
    (124,496
    )Proceeds from sale of WABZ-FM
    
    
    300
    
    
    
    Increase in investments, other assets and intangible assets
    
    
    (4,934
    )
    
    
    (4,476
    )Net cash used by investing activities
    
    
    (19,072
    )
    
    
    (145,711
    )CASH FLOWS FROM FINANCING ACTIVITIESIncrease (decrease) in revolving credit borrowings
    
    
    (100
    )
    
    
    35,900New term loan borrowings
    
    
    
    
    
    
    400,000Repayment of debt
    
    
    (2,082
    )
    
    
    (324,250
    )Decrease in cash overdrafts
    
    
    (1,428
    )
    
    
    Payment of preferred dividends
    
    
    (247
    )
    
    
    (247
    )Non-voting subsidiary common stock transactions
    
    
    (3,201
    )
    
    
    (4,733
    )Net cash provided (used) by financing activities
    
    
    (7,058
    )
    
    
    106,670NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    906
    
    
    
    (433
    )CASH AND CASH EQUIVALENTS, beginning
    
    
    
    
    
    
    525CASH AND CASH EQUIVALENTS, ending
    
    $
    906
    
    
    $
    92
  4




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##### 



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




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##### 



Radio Employee Stock Plan and Cable Performance Share Plan
 st
 Recent Accounting Pronouncements
    3. Segment Information
   Radio
    
    Cable
    
    Other
    
    TotalFor the Three Months Ended June 30, 2005Operating income (loss)
    
    $
    16,800
    
    
    $
    5,680
    
    
    $
    (4,175
    )
    
    $
    18,305Interest expense, net
    
    
    1,178
    
    
    
    4,179
    
    
    
    3,659
    
    
    
    9,016Depreciation and amortization
    
    
    1,602
    
    
    
    9,382
    
    
    
    169
    
    
    
    11,153Income (loss) before income taxes
    
    
    15,623
    
    
    
    1,501
    
    
    
    (6,605
    )
    
    
    10,519Identifiable assets
    
    
    447,753
    
    
    
    334,736
    
    
    
    4,206
    
    
    
    786,695Capital expenditures
    
    
    753
    
    
    
    6,151
    
    
    
    (2
    )
    
    
    6,902For the Three Months Ended June 30, 2004Operating income (loss)
    
    $
    19,279
    
    
    $
    6,434
    
    
    $
    (1,328
    )
    
    $
    24,385Interest expense, net
    
    
    1,382
    
    
    
    3,498
    
    
    
    3,110
    
    
    
    7,990Depreciation and amortization
    
    
    1,745
    
    
    
    9,373
    
    
    
    102
    
    
    
    11,220Income (loss) before income taxes
    
    
    15,892
    
    
    
    (2,747
    )
    
    
    (3,926
    )
    
    
    9,219Identifiable assets (1)
    
    
    436,051
    
    
    
    343,545
    
    
    
    126,468
    
    
    
    906,064Capital expenditures
    
    
    1,104
    
    
    
    10,228
    
    
    
    62
    
    
    
    11,394
 6




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##### 



Radio
    
    Cable
    
    Other
    
    TotalFor the Six Months Ended June 30, 2005Operating income (loss)
    
    $
    26,182
    
    
    $
    11,493
    
    
    $
    (5,380
    )
    
    $
    32,295Interest expense, net
    
    
    2,191
    
    
    
    7,764
    
    
    
    6,037
    
    
    
    15,992Depreciation and amortization
    
    
    3,207
    
    
    
    19,132
    
    
    
    333
    
    
    
    22,672Income (loss) before income taxes
    
    
    24,348
    
    
    
    3,729
    
    
    
    (8,581
    )
    
    
    19,496Identifiable assets
    
    
    447,753
    
    
    
    334,736
    
    
    
    4,206
    
    
    
    786,695Capital expenditures
    
    
    1,245
    
    
    
    13,164
    
    
    
    29
    
    
    
    14,438For the Six Months Ended June 30, 2004Operating income (loss)
    
    $
    27,782
    
    
    $
    12,778
    
    
    $
    (2,237
    )
    
    $
    38,323Interest expense, net
    
    
    3,101
    
    
    
    7,110
    
    
    
    6,622
    
    
    
    16,833Depreciation and amortization
    
    
    3,410
    
    
    
    16,585
    
    
    
    191
    
    
    
    20,186Income (loss) before income taxes
    
    
    22,775
    
    
    
    (15
    )
    
    
    (6,727
    )
    
    
    16,033Identifiable assets (1)
    
    
    436,051
    
    
    
    343,545
    
    
    
    126,468
    
    
    
    906,064Capital expenditures
    
    
    1,765
    
    
    
    14,773
    
    
    
    201
    
    
    
    16,739
 
 (1)
    
    Receivable from Parent of $111.3 million was reported as an asset as of June 30, 2004. 7




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##### 



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




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##### 



Overview
       -
    
    Cable revenues increased $10.8 million or 13% over 2004 largely due to a full
six months impact in 2005 of the March 2004 Carmel acquisition.-
    
    Cables Carmel operation ceased using all RCN transition services, including
telephone-based customer service, network monitoring, billing (voice, video and data),
telephony switching and Internet backbone. Carmels operating loss improved in the
second quarter by $0.2 million or 12% compared to the same period in 2004.-
    
    The Rankin County cable plant rebuild was substantially finished as of June 30,
2005, with minor clean-up and customer connections expected to be completed during
August.-
    
    Capital expenditures for 2005 were 40% less than for the comparable period in
2004.-
    
    On January 26, 2005, the United States District Court for the Northern District
of Georgia granted a summary judgment against Media. The summary judgment granted BCI,
the plaintiff, the sum of $10.0 million with interest at the rate of 9% per annum from
January 22, 2001 and also allowed for recovery of BCIs attorneys fees and costs. On
February 22, 2005, Media appealed the summary judgment. Oral arguments on Medias
appeal are scheduled for the week of December 5, 2005 (See Note 2 to condensed
consolidated financial statements).-
    
    Media recognized an impairment loss on SusQtechs goodwill and other long-lived
assets of $2.1 million. (See Note 2 to condensed consolidated financial
statements.)-
    
    Cable launched digital video recorder (DVR) customer premise equipment during
second quarter to customers in York and Williamsport, Pennsylvania and Brunswick,
Maine. The equipment is expected to be offered in the remaining systems during third
quarter 2005.-
    
    Based on the results of the independent valuation performed for Susquehanna
Pfaltzgraff Co.s ESOP as of December 31, 2004 (Valuation), a $1.2 million
compensation expense was recognized related to the Cable Performance Share Plan on
April 1, 2005. Based on the results of the Valuation, a $4.0 million decrease in
minority interests related to the Radio Employee Stock Plan was recognized on April 1,
2005.
 9




---



##### 



Results of Operations
  (in millions)
    
    Three months ended June 30, 2005Radio
    
    Cable
    
    Other
    
    TotalRevenues
    
    $
    62.2
    
    
    
    100.0
    %
    
    $
    48.8
    
    
    
    100.0
    %
    
    $
    0.8
    
    
    
    100.0
    %
    
    $
    111.8
    
    
    
    100.0
    %Operating expenses:Operating and programming
    
    
    21.2
    
    
    
    34.1
    %
    
    
    23.9
    
    
    
    49.0
    %
    
    
    0.9
    
    
    
    112.5
    %
    
    
    46.0
    
    
    
    41.1
    %Selling
    
    
    9.5
    
    
    
    15.3
    %
    
    
    2.3
    
    
    
    4.7
    %
    
    
    0.3
    
    
    
    37.5
    %
    
    
    12.1
    
    
    
    10.8
    %General and administrative
    
    
    13.1
    
    
    
    21.1
    %
    
    
    7.5
    
    
    
    15.4
    %
    
    
    1.5
    
    
    
    *
    
    
    
    22.1
    
    
    
    19.8
    %Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.1
    
    
    
    *
    
    
    
    2.1
    
    
    
    1.9
    %Depreciation and
amortization
    
    
    1.6
    
    
    
    2.5
    %
    
    
    9.4
    
    
    
    19.2
    %
    
    
    0.2
    
    
    
    25.0
    %
    
    
    11.2
    
    
    
    10.0
    %Total operating expenses
    
    
    45.4
    
    
    
    73.0
    %
    
    
    43.1
    
    
    
    88.3
    %
    
    
    5.0
    
    
    
    *
    
    
    
    93.5
    
    
    
    83.6
    %Operating income (loss)
    
    $
    16.8
    
    
    
    27.0
    %
    
    $
    5.7
    
    
    
    11.7
    %
    
    $
    (4.2
    )
    
    
    *
    
    
    
    18.3
    
    
    
    16.4
    %Other income (expense)Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9.0
    )
    
    
    (8.1
    )%Interest income from loan to
parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.6
    
    
    
    1.4
    %Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.4
    )
    
    
    (0.4
    )%Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4.2
    )
    
    
    (3.7
    )%Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.1
    
    
    
    2.8
    %Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    9.4
    
    
    
    8.4
    %
 
 *
    
    Not meaningful. (in millions)
    
    Three months ended June 30, 2004Radio
    
    Cable
    
    Other
    
    TotalRevenues
    
    $
    64.2
    
    
    
    100.0
    %
    
    $
    46.6
    
    
    
    100.0
    %
    
    $
    0.5
    
    
    
    100.0
    %
    
    $
    111.3
    
    
    
    100.0
    %Operating expenses:Operating and programming
    
    
    20.5
    
    
    
    31.9
    %
    
    
    21.5
    
    
    
    46.1
    %
    
    
    0.8
    
    
    
    160.0
    %
    
    
    42.8
    
    
    
    38.5
    %Selling
    
    
    9.7
    
    
    
    15.1
    %
    
    
    1.3
    
    
    
    2.8
    %
    
    
    0.2
    
    
    
    40.0
    %
    
    
    11.2
    
    
    
    10.1
    %General and administrative
    
    
    12.9
    
    
    
    20.1
    %
    
    
    7.9
    
    
    
    17.0
    %
    
    
    0.9
    
    
    
    180.0
    %
    
    
    21.7
    
    
    
    19.5
    %Depreciation and
amortization
    
    
    1.8
    
    
    
    2.8
    %
    
    
    9.4
    
    
    
    20.2
    %
    
    
    0.1
    
    
    
    20.0
    %
    
    
    11.3
    
    
    
    10.1
    %Total operating expenses
    
    
    44.9
    
    
    
    69.9
    %
    
    
    40.1
    
    
    
    86.1
    %
    
    
    2.0
    
    
    
    400.0
    %
    
    
    87.0
    
    
    
    78.2
    %Operating income
    
    $
    19.3
    
    
    
    30.1
    %
    
    $
    6.5
    
    
    
    13.9
    %
    
    $
    (1.5
    )
    
    
    (300.0
    )%
    
    
    24.3
    
    
    
    21.8
    %Other income (expense)Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8.0
    )
    
    
    (7.2
    )%Interest income from
loan to
parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.7
    
    
    
    1.5
    %Loss on extinguishment of
debt and other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8.8
    )
    
    
    (7.9
    )%Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3.5
    )
    
    
    (3.1
    )%Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6.2
    )
    
    
    (5.5
    )%Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (0.5
    )
    
    
    (0.4
    )%
 10




---



##### 



(in millions)
    
    Six months ended June 30, 2005Radio
    
    Cable
    
    Other
    
    TotalRevenues
    
    $
    110.7
    
    
    
    100.0
    %
    
    $
    96.5
    
    
    
    100.0
    %
    
    $
    1.9
    
    
    
    100.0
    %
    
    $
    209.1
    
    
    
    100.0
    %Operating expenses:Operating and programming
    
    
    37.5
    
    
    
    33.9
    %
    
    
    47.5
    
    
    
    49.2
    %
    
    
    1.9
    
    
    
    100.0
    %
    
    
    86.9
    
    
    
    41.6
    %Selling
    
    
    18.1
    
    
    
    16.3
    %
    
    
    4.0
    
    
    
    4.2
    %
    
    
    0.5
    
    
    
    26.3
    %
    
    
    22.6
    
    
    
    10.8
    %General and administrative
    
    
    25.7
    
    
    
    23.2
    %
    
    
    14.4
    
    
    
    14.9
    %
    
    
    2.4
    
    
    
    *
    
    
    
    42.5
    
    
    
    20.3
    %Impairment loss
    
    
    
    
    
    
    0.0
    %
    
    
    
    
    
    
    0.0
    %
    
    
    2.1
    
    
    
    *
    
    
    
    2.1
    
    
    
    1.0
    %Depreciation and
amortization
    
    
    3.2
    
    
    
    2.9
    %
    
    
    19.1
    
    
    
    19.8
    %
    
    
    0.4
    
    
    
    21.1
    %
    
    
    22.7
    
    
    
    10.9
    %Total operating expenses
    
    
    84.5
    
    
    
    76.3
    %
    
    
    85.0
    
    
    
    88.1
    %
    
    
    7.3
    
    
    
    *
    
    
    
    176.8
    
    
    
    84.6
    %Operating income (loss)
    
    $
    26.2
    
    
    
    23.7
    %
    
    $
    11.5
    
    
    
    11.9
    %
    
    $
    (5.4
    )
    
    
    *
    
    
    
    32.3
    
    
    
    15.4
    %Other income (expense)Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16.0
    )
    
    
    (7.6
    )%Interest income from
loan to
parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.2
    
    
    
    1.5
    %Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.0
    )
    
    
    (0.0
    )%Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7.7
    )
    
    
    (3.7
    )%Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.2
    
    
    
    1.1
    %Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    14.0
    
    
    
    6.7
    %
 
 *
    
    Not meaningful. (in millions)
    
    Six months ended June 30, 2004Radio
    
    Cable
    
    Other
    
    TotalRevenues
    
    $
    110.9
    
    
    
    100.0
    %
    
    $
    85.7
    
    
    
    100.0
    %
    
    $
    1.6
    
    
    
    100.0
    %
    
    $
    198.2
    
    
    
    100.0
    %Operating expenses:Operating and programming
    
    
    36.1
    
    
    
    32.6
    %
    
    
    39.8
    
    
    
    46.4
    %
    
    
    1.5
    
    
    
    93.8
    %
    
    
    77.4
    
    
    
    39.1
    %Selling
    
    
    17.9
    
    
    
    16.1
    %
    
    
    2.7
    
    
    
    3.2
    %
    
    
    0.4
    
    
    
    25.0
    %
    
    
    21.0
    
    
    
    10.6
    %General and administrative
    
    
    25.7
    
    
    
    23.2
    %
    
    
    13.8
    
    
    
    16.1
    %
    
    
    1.8
    
    
    
    112.5
    %
    
    
    41.3
    
    
    
    20.8
    %Depreciation and
amortization
    
    
    3.4
    
    
    
    3.0
    %
    
    
    16.6
    
    
    
    19.4
    %
    
    
    0.2
    
    
    
    12.5
    %
    
    
    20.2
    
    
    
    10.2
    %Total operating expenses
    
    
    83.1
    
    
    
    74.9
    %
    
    
    72.9
    
    
    
    85.1
    %
    
    
    3.9
    
    
    
    243.8
    %
    
    
    159.9
    
    
    
    80.7
    %Operating income (loss)
    
    $
    27.8
    
    
    
    25.1
    %
    
    $
    12.8
    
    
    
    14.9
    %
    
    $
    (2.3
    )
    
    
    (143.8
    )%
    
    
    38.3
    
    
    
    19.3
    %Other income (expense)Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16.8
    )
    
    
    (8.5
    )%Interest income from
loan to
parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.3
    
    
    
    1.7
    %Loss on extinguishment of
debt and other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8.8
    )
    
    
    (4.4
    )%Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6.1
    )
    
    
    (3.1
    )%Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6.9
    )
    
    
    (3.5
    )%Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3.0
    
    
    
    1.5
    %
 11




---



##### 



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




---



##### 



Operating and programming expenses.
 Selling expenses.
 General and administrative expenses.
 Depreciation and amortization.
 Operating income.
 Six Months Ended June 30, 2005 Compared to the Six Months Ended June 30, 2004
 Consolidated
 Revenues
 Operating and programming expenses.
 Selling expenses. S
 General and administrative expenses.
 Impairment loss.
 Depreciation and amortization.
 Operating income.
 Net income.
 Interest expense
 13




---



##### 



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




---



##### 



Total
 TotalContractual Cash
    
    AmountsObligations
    
    Committed
    
    2005
    
    2006
    
    2007
    
    2008
    
    2009
    
    ThereafterLong-term debt
    
    $
    576,978
    
    
    $
    1,269
    
    
    $
    16,218
    
    
    $
    24,141
    
    
    $
    30,625
    
    
    $
    38,125
    
    
    $
    466,600Broadcast rights
    
    
    42,317
    
    
    
    6,217
    
    
    
    11,200
    
    
    
    8,000
    
    
    
    8,250
    
    
    
    8,650
    
    
    
    Operating leases
    
    
    42,723
    
    
    
    5,329
    
    
    
    5,138
    
    
    
    4,968
    
    
    
    4,741
    
    
    
    4,348
    
    
    
    18,199Total
    
    $
    662,018
    
    
    $
    12,815
    
    
    $
    32,556
    
    
    $
    37,109
    
    
    $
    43,616
    
    
    $
    51,123
    
    
    $
    484,799
  Covenant Test
    
    Actual ValueFixed charge coverage ratio must be at least 1.10
    
    
    1.55Maximum consolidated leverage ratio may not exceed 6.50
    
    
    4.19Interest coverage ratio must be at least 2.00
    
    
    5.06
   ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   2005
    
    $
    1,2502006
    
    
    13,7502007
    
    
    23,1252008
    
    
    30,6252009
    
    
    38,1252010
    
    
    45,6252011
    
    
    212,2252012
    
    
    58,750
 15




---



##### 



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




---



##### 



SIGNATURE
  August 17, 2005
    SUSQUEHANNA MEDIA CO.By:
    /s/ John L. FinlaysonJohn L. FinlaysonVice President and Principal
   Financial and Accounting Officer 17