In preparing the discussion and analysis contained in this Item 2, we presume that readers have read or have access to the discussion and analysis contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 22, 2008. In addition, you should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and related notes included elsewhere in this report. The following results of operations include a discussion of the nine months and three months ended September 30, 2008 as compared to the nine months and three months ended September 30, 2007. Our results of operations during the relevant periods represent the operations of the radio stations: (1) owned and operated by us;
(2) operated by us pursuant to time brokerage agreements ("TBAs"); or (3) owned by us but operated by others pursuant to TBAs.

We discuss net revenues, station operating expenses and operating income by comparing the performance of stations owned or operated by us throughout a relevant period to the performance of those same stations in the prior period whether or not owned or operated by us. We use these comparisons to assess the performance of our operations by analyzing the effect of acquisitions and dispositions of stations on net revenues and station operating expenses throughout the periods measured.

Results of Operations

The following significant factors affected our results of operations for the nine months ended September 30, 2008 as compared to the nine months ended September 30, 2007:

Acquisitions

† On March 14, 2008, we acquired through an exchange agreement three radio stations in San Francisco, California, from Bonneville International Corporation ("Bonneville"). We began operating these stations on February 26, 2007 under a TBA that in 2008 increased our net revenues, station operating expenses and depreciation and amortization expense.

† On December 10, 2007, we acquired WVEI-FM (formerly WBEC-FM), a station in Springfield, Massachusetts, for $5.8 million in cash. We began operating this station on February 10, 2006 under a TBA by simulcasting the format of WEEI-AM (a radio station owned and operated by us in the Boston, Massachusetts, market). The impact to 2008 was an increase in our depreciation and amortization expense and interest expense.

† On November 30, 2007, we acquired from CBS Radio Stations Inc. ("CBS") four radio stations in Austin, Texas, and three radio stations in Memphis, Tennessee, for $101.0 million in cash. We began operating these stations on November 1, 2006 under a TBA. The impact to 2008 was an increase in our depreciation and amortization expense and interest expense and a decrease in our TBA expense.

† On November 30, 2007, we acquired from CBS four radio stations in Cincinnati, Ohio, for $119.0 million in cash. From November 1, 2006 through February 25, 2007, we operated three of these stations under a TBA. On February 26, 2007, Bonneville began operating the same three stations under a TBA with us. The impact to 2008 was a decrease in our net revenues, station operating expenses and TBA fees and an increase to our interest expense.

† On November 30, 2007, we acquired from CBS four stations in Rochester, New York, for $42.0 million in cash. Of the four stations acquired, two stations were reflected in continuing operations and two stations were reflected in discontinued operations. For the two stations reflected in continuing operations, the impact to 2008 was an increase to our net revenues, station operating expenses, depreciation and amortization expense and interest expense.

Dispositions

† On July 14, 2008, we sold three of our eight Rochester, New York, radio stations, which the buyer began operating on May 1, 2008 under a TBA with us. These three stations were recognized as discontinued operations and required us to conform the prior year's financial statements to the current year's presentation.

† On March 14, 2008, we sold to Bonneville through an exchange agreement, three of our seven Seattle, Washington, radio stations which Bonneville began operating on February 26, 2007 under a TBA with us. The impact to 2008, due to the cessation of operation of these stations on February 26, 2007, was a decrease in our net revenues, station operating expenses and depreciation and amortization expense.

† On March 14, 2008, we sold to Bonneville, through an exchange agreement, four Cincinnati, Ohio, radio stations we acquired during the fourth quarter of 2007 under two separate transactions. Pursuant to two TBA agreements, we operated these stations from November 1, 2006 through February 25, 2007. On February 26, 2007, Bonneville began operating these stations under a TBA with us. The impact to 2008, due to the cessation of operation of these stations on February 26, 2007, was a decrease in our net revenues and station operating expenses.

† On January 15, 2008, we sold KLQB-FM (formerly KXBT-FM), Austin, Texas, to Univision Radio Broadcasting Texas, L.P. ("Univision") for $20.0 million in cash. Univision began operating KLQB-FM under a TBA on February 26, 2007 (a station we began operating on November 1, 2006 under a TBA agreement with CBS). The impact to 2008, due to the cessation of operation of this station on February 26, 2007 and the sale on January 15, 2008, was a decrease in our net revenues, station operating expenses and interest expense.

Financing

† Our interest expense decreased due to: (1) a decrease in interest rates; and (2) the redemption of a portion of our Senior Subordinated Notes that had a higher interest rate than the rate under our senior debt. This decrease was offset by: (i) increased borrowings used to finance: (a) acquisitions during the fourth quarter of 2007 in the amount of $268.3 million; (b) stock repurchases during the second quarter of 2008 of $13.3 million and during the third quarter of 2007 of $7.6 million; and (c) the payment of quarterly cash dividends to our shareholders; and (ii) interest expense of $0.9 million related to the resolution of certain litigation.

† During the nine months ended September 30, 2008, we repurchased $58.0 million of Senior Subordinated Notes and recognized a net gain on extinguishment of debt of $4.0 million.

† On June 18, 2007, we entered into a new credit facility that resulted in the recognition of a $0.5 million loss on the early extinguishment of debt related to the write-off of deferred financing costs during the second quarter of 2007.

Other

† During the second quarters of 2008 and 2007, we recorded an impairment loss of $184.6 million and $45.4 million, respectively, in connection with our annual impairment review of goodwill under the provisions of Statement of Financial Accounting Standard ("SFAS") No. 142. See Note 3 in the accompanying notes to the financial statements for a discussion of the contributing factors that caused the impairment loss.

† In 2008, we recorded an increase to our valuation allowance of $11.7 million for the full amount of the net current and net deferred tax assets (after excluding the net deferred tax liabilities associated with non amortizable assets such as broadcasting licenses and goodwill). The increase was primarily due to the cumulative losses incurred by us since 2006, which caused uncertainty as to the realization of the deferred tax assets in future years.

† During the second quarter of 2008, we recovered $3.5 million from our insurance company for damages resulting from Hurricane Katrina.

† During the first quarter of 2008, we reviewed our carrying amount for the Rochester assets then held for sale and determined that an impairment loss of $4.0 million (net of an income tax benefit of $2.7 million) was necessary as a result of the status of our then ongoing divestiture process.

† During the first quarter of 2007, we recorded a discrete income tax expense adjustment of $2.9 million as we commenced operations in 2007 in states which on average have higher income tax rates than in states in which we had previously operated.

Nine Months Ended September 30, 2008 As Compared To The Nine Months Ended September 30, 2007

Net Revenues:



                                Nine Months Ended
                    September 30, 2008     September 30, 2007
                              (dollars in millions)
Net Revenues        $             334.7    $             347.8
Amount of Change    $             (13.1 )
Percentage Change                  (3.8 )%

Our decrease in net revenues was primarily due to: (1) weak demand for advertising in general that contributed to an overall decline in total market revenues in many of the markets where we operate stations, including Kansas City, New Orleans, Portland and Sacramento; and (2) the commencement of operations by other parties under TBAs on: (i) February 26, 2007 for three of our seven Seattle radio stations; (ii) February 26, 2007 for four radio stations in the Cincinnati market; and (iii) February 26, 2007 for a radio station in the Austin market. Our decrease in net revenues was offset by: (a) the commencement by us of operations under a TBA on February 26, 2007 of three radio stations in the San Francisco market; (b) the acquisition on November 30, 2007 of four radio stations in the Rochester market of which two radio stations were reflected in continuing operations; and (c) increases in net revenues for our radio stations in markets such as Austin, Buffalo and Norfolk.

† Net revenues in 2008 were not impacted by any acquisitions and dispositions of radio stations as of the beginning of the period.

† Net revenues in 2007 would have been higher by $2.3 million if we had adjusted net revenues to give effect to acquisitions and dispositions of radio stations as of the beginning of the period.

Station Operating Expenses:



                                         Nine Months Ended
                             September 30, 2008     September 30, 2007
                                       (dollars in millions)
Station Operating Expenses   $             210.7    $             214.9
Amount of Change             $              (4.2 )
Percentage Change                           (2.0 )%

The decrease in station operating expenses was primarily due to the factors leading to the decrease in net revenues as described above as certain variable expenses decrease with a corresponding decrease in net revenues, offset by the effects of inflation.

† Station operating expenses in 2008 were not impacted for any acquisitions and dispositions of radio stations as of the beginning of the period.

††††††††††††††† † Station operating expenses in 2007 would have been higher by $0.9 million if we had adjusted station operating expenses to give effect to acquisitions and dispositions of radio stations as of the beginning of the period.

Depreciation And Amortization Expenses:



                                                     Nine Months Ended
                                         September 30, 2008     September 30, 2007
                                                   (dollars in millions)
Depreciation and Amortization Expenses   $              16.0    $              12.0
Amount of Change                         $               4.0
Percentage Change                                       33.3 %

Depreciation and amortization expense increased due to the acquisitions of radio station assets in the fourth quarter of 2007 (other than those assets in Rochester, New York that were acquired and held for sale or those assets in Cincinnati, Ohio which were acquired and reflected as an investment in deconsolidated subsidiaries), which included certain amortizable assets with lives of a short duration.

Corporate General And Administrative Expenses:



                                                                   Nine Months Ended
                                                       September 30, 2008      September 30, 2007
                                                                 (dollars in millions)
Corporate General and Administrative Expenses         $               21.5     $              22.2
Amount of Change                                      $               (0.7 )
Percentage Change                                                     (3.2 )%

Corporate general and administrative expenses decreased primarily due to: (1) a decrease in legal expenses of $0.9 million primarily associated with certain legal proceedings in the nine months ended September 30, 2007 which did not reoccur in 2008; and (2) a deferred compensation expense reduction of $0.7 million as a result of a decrease in the value of the unfunded obligation. The decrease in corporate general and administrative expense was offset by an increase in non-cash compensation expense of $1.6 million due to: (a) the cumulative effect of equity awards issued over multiple years, including 2008, with the awards vesting over periods of up to four years; and (b) the acceleration of vesting of equity awards for a key officer.

Operating Income (Loss):



                                       Nine Months Ended
                           September 30, 2008      September 30, 2007
                                     (dollars in millions)
Operating Income (Loss)   $              (88.0 )  $               42.7
Amount of Change          $             (130.7 )
Percentage Change                       (306.1 )%

The decrease in operating income was primarily due to: (1) an increase in impairment loss of $139.2 million due to a $184.6 million impairment loss in connection with our review of goodwill in the second quarter of 2008 as compared to a $45.4 million impairment loss in connection with our review of goodwill during the second quarter of 2007; and (2) an increase in depreciation and amortization expenses as described above. This decrease was offset by: (i) the elimination of time brokerage agreement fees in 2007 of $11.6 million, primarily due to the cessation of a TBA with CBS on November 30, 2007; and (ii) an increase in net gain on sale or disposal of assets of $9.1 million primarily related to our Bonneville exchange agreement.

† Operating income in 2008 was not impacted for any acquisitions and dispositions of radio stations as of the beginning of the period.

† Operating income in 2007 would have been higher by $1.4 million if we had adjusted operating income to give effect to acquisitions and dispositions of radio stations as of the beginning of the period.

Interest Expense:



                                 Nine Months Ended
                     September 30, 2008      September 30, 2007
                               (dollars in millions)
Interest Expense    $               34.8     $              37.7
Amount of Change    $               (2.9 )
Percentage Change                   (7.7 )%

The decrease in interest expense was primarily due to: (1) a decline in interest rates during the nine months ended September 30, 2008 as compared to the nine months ended September 30, 2007; and (2) the repurchase of our senior subordinated notes which have a higher interest rate than the replacement debt during the first three quarters of 2008. This decrease was offset by higher average outstanding debt under our senior credit agreement used to finance:
(i) the acquisition of radio station assets in several markets in the amount of $268.3 million during the fourth quarter of 2007; (ii) quarterly dividend payments during the trailing four quarters ended September 30, 2008; and
(iii) the repurchase of our common stock in the amount of $13.3 million during the second quarter of 2008 and $7.6 million during the third quarter of 2007.

Income (Loss) From Continuing Operations Before Income Tax Provision (Benefit):



                                                                   Nine Months Ended
                                                       September 30, 2008      September 30, 2007
                                                                 (dollars in millions)
Income (Loss) From Continuing Operations Before
Income Tax Provision (Benefit)                        $             (115.7 )  $                5.9
Amount of Change                                      $             (121.6 )
Percentage Change                                                       NM

The net change was primarily attributable to an increase in impairment loss of $139.2 million due to a $184.6 million impairment loss in connection with our review of goodwill in the second quarter of 2008 as compared to a $45.4 million impairment loss in connection with our review of goodwill in the second quarter of 2007. This decrease was offset by: (1) a $4.0 million gain on the retirement of our senior subordinated debt; (2) a $3.3 million increase in other income related to an insurance recovery; and (3) a decrease in our interest expense of $2.9 million for the reasons described above under Interest Expense.

Income Tax Provision (Benefit):



                                              Nine Months Ended
                                  September 30, 2008      September 30, 2007
                                            (dollars in millions)
Income Tax Provision (Benefit)   $              (32.3 )  $                4.9
Amount of Change                 $              (37.2 )
Percentage Change                                  NM

The net change in income tax provision (benefit) was primarily the result of the net change as described above under Income (Loss) From Continuing Operations Before Income Tax Provision (Benefit). In addition, we recorded discrete items of tax of: (1) $11.7 million for the nine months ended September 30, 2008 due to an increase to our valuation allowance for the full amount of the net current and net deferred tax assets (after excluding the net deferred tax liabilities associated with non amortizable assets such as broadcasting licenses and goodwill); and (2) $2.9 million for the nine months ended September 30, 2007 resulting from the commencement of operations in 2007 in states which on average have higher income tax rates than in states in which we previously operated and the resulting effect on previously reported temporary differences between the tax and financial reporting bases of our assets and liabilities.

Our effective income tax rate was a tax benefit of 27.9% for the nine months ended September 30, 2008 and is based upon our estimated annual rate of a tax benefit of 38.0% (the estimated annual rate of tax is exclusive of any discrete items of tax, including the discrete item of tax in the amount of $11.7 million as described above). For the nine months ended September 30, 2007, the effective income tax rate was 82.7% (exclusive of the discrete item of tax in the amount of $2.9 million as described above).

For the nine months ended September 30, 2008, the income tax benefit of $32.3 million was deferred. For the nine months ended September 30, 2007, the income tax expense of $4.9 million was comprised of a current tax credit of $6.3 million and a deferred tax expense of $11.2 million.

Income (Loss) From Discontinued Operations, Net Of Income Tax Provision (Benefit):

                                                                     Nine Months Ended
                                                       September 30, 2008        September 30, 2007
                                                                   (dollars in millions)
Income (Loss) from Discontinued Operations, Net Of
Income Tax Provision (Benefit)                        $               (3.5 )   $                    0
Amount of Change                                      $               (3.5 )
Percentage Change                                                       NM

The net change was primarily due to a non-cash impairment loss of $4.0 million (net of an income tax benefit of $2.7 million) in the first quarter of 2008 for the Rochester assets that were held for sale and that were subsequently disposed of during the third quarter of 2008.

Net Income (Loss):



                                 Nine Months Ended
                     September 30, 2008      September 30, 2007
                               (dollars in millions)
Net Income (Loss)   $              (86.8 )  $                1.0
Amount of Change    $              (87.8 )
Percentage Change                     NM

The net change was primarily attributable to the reasons described above under Income (Loss) From Continuing Operations Before Income Tax Provision (Benefit) and the discrete items of tax as described above under Income Tax Provision (Benefit).

Three Months Ended September 30, 2008 As Compared To The Three Months Ended September 30, 2007

Net Revenues:



                                Three Months Ended
                    September 30, 2008      September 30, 2007
                               (dollars in millions)
Net Revenues        $             115.6     $             122.9
Amount of Change    $              (7.3 )
Percentage Change                  (5.9 )%

Our decrease in net revenues was primarily due to weak demand for advertising in general that contributed to an overall decline in total market revenues in many of the markets where we operate stations, including Boston, Sacramento and Seattle. This decrease was partially offset by increases in net revenues for our radio stations in certain markets, including Buffalo, Denver and Norfolk.

† Net revenues in 2008 were not impacted for any acquisitions and dispositions of radio stations as of the beginning of the period.

† Net revenues in 2007 would have been higher by $1.4 million if we had adjusted net revenues to give effect to acquisitions and dispositions of radio stations as of the beginning of the period.

Station Operating Expenses:



                                         Three Months Ended
                             September 30, 2008     September 30, 2007
                                       (dollars in millions)
Station Operating Expenses   $              72.1    $              71.8
Amount of Change             $               0.3
Percentage Change                            0.4 %

The marginal increase in station operating expenses was primarily due to salary increases, offset by the factors leading to the decrease in net revenues as described above as certain variable expenses decrease with a corresponding decrease in net revenues.

† Station operating expenses in 2008 were not impacted for any acquisitions and dispositions of radio stations as of the beginning of the period.

††††††† † Station operating expenses in 2007 would have been higher by $1.3 million if we had adjusted station operating expenses to give effect to acquisitions and dispositions of radio stations as of the beginning of the period.

Depreciation And Amortization Expenses:



                                                                   Three Months Ended
                                                       September 30, 2008      September 30, 2007
                                                                 (dollars in millions)
Depreciation and Amortization Expenses                $                4.5    $                3.9
Amount of Change                                      $                0.6
Percentage Change                                                     15.4 %

Depreciation and amortization expense increased due to the acquisitions of radio station assets in the amount of $268.3 million in the fourth quarter of 2007, which included certain amortizable assets with lives of a short duration.

Corporate General And Administrative Expenses:



                                                                    Three Months Ended
                                                      September 30, 2008        September 30, 2007
                                                                  (dollars in millions)
Corporate General and Administrative Expenses         $               6.2      $                 6.8
Amount of Change                                      $              (0.6 )
Percentage Change                                                    (8.8 )%

The decrease in corporate general and administrative expenses was primarily due to a deferred compensation expense reduction of $0.4 million due to a decrease in the value of the unfunded obligation, offset by the effects of inflation.

Operating Income:



                                 Three Months Ended
                     September 30, 2008       September 30, 2007
                                (dollars in millions)
Operating Income    $               32.8     $               36.7
Amount of Change    $               (3.9 )
Percentage Change                  (10.6 )%

The decrease in operating income was primarily due to a decrease in net revenues as described under Net Revenues above, offset by a decrease in time brokerage agreement fees of $4.1 million, primarily due to the cessation of a TBA with CBS on November 30, 2007.

††††††††††††††† † Operating income in 2008 was not impacted for any acquisitions and dispositions of radio stations as of the beginning of the period.

††††††††††††††† † Operating income in 2007 would have been . . .