You should read the following discussion together with the financial statements and related notes included elsewhere in this report. The results discussed below are not necessarily indicative of the results to be expected in any future periods. This report contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including any projections of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words "may," "will," "estimate," "intend," "continue," "believe," "expect" or "anticipate" and other similar words. Such forward-looking statements may be contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations," among other places. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as unforeseen events that would cause us to broadcast commercial-free for any period of time and changes in the radio broadcasting industry generally. We do not intend, and undertake no obligation, to update any forward-looking statement. Key risks to our company are described in our annual report on Form 10-K, filed with the Securities and Exchange Commission on March 13, 2008.

General

We are a radio broadcasting company whose primary business is acquiring, developing, and operating radio stations throughout the United States. We own and operate 44 radio stations in the following markets: Miami-Fort Lauderdale, FL, Philadelphia, PA, Wilmington, DE, Las Vegas, NV, Fort Myers-Naples, FL, Fayetteville, NC, Greenville-New Bern-Jacksonville, NC, Augusta, GA, West Palm Beach-Boca Raton, FL, Atlanta, GA and Boston, MA. We refer to each group of radio stations that we own in each radio market as a market cluster.

Financial Statement Presentation

The following discussion provides a brief description of certain key items that appear in our consolidated financial statements and general factors that impact these items.

Net Revenue. Our net revenue is primarily derived from the sale of advertising airtime to local and national advertisers. Net revenue is gross revenue less agency commissions, generally 15% of gross revenue. Local revenue generally consists of advertising airtime sales to advertisers in a radio station's local market either directly to the advertiser or through the advertiser's agency. National revenue generally consists of advertising airtime sales to agencies purchasing advertising for multiple markets. National sales are generally facilitated by our national representation firm, which serves as our agent in these transactions.

The advertising rates that we are able to charge and the number of advertisements that we can broadcast without jeopardizing listener levels generally determine our net revenue. Advertising rates are primarily based on the following factors:

• a radio station's audience share in the demographic groups targeted by advertisers as measured principally by quarterly reports issued by the Arbitron Ratings Company;

• the number of radio stations, as well as other forms of media, in the market competing for the attention of the same demographic groups;

• the supply of, and demand for, radio advertising time; and

• the size of the market.

Our net revenue is affected by general economic conditions, competition and our ability to improve operations at our market clusters. Seasonal revenue fluctuations are also common in the radio broadcasting industry and are primarily due to variations in advertising expenditures by local and national advertisers. Our revenues are typically lowest in the first calendar quarter of the year.

We use trade sales agreements to reduce cash paid for operating costs and expenses by exchanging advertising airtime for goods or services; however, we endeavor to minimize trade revenue in order to maximize cash revenue from our available airtime.

A growing source of revenue comes from our radio station websites primarily through the sale of advertiser promotions and advertising on our websites and the sale of advertising airtime during audio streaming of our radio stations over the internet. Our radio station websites contributed $3.0 million or 3.0% of net revenue during the nine months ended September 30, 2007 and $4.2 million or 4.6% of net revenue during the nine months ended September 30, 2008.

Operating Costs and Expenses. Our operating costs and expenses consist primarily of (1) programming, engineering, and promotional expenses, reported as cost of services, and selling, general and administrative expenses incurred at our radio stations, (2) general and administrative expenses, including compensation and other expenses, incurred at our corporate offices, and (3) depreciation and amortization. We strive to control our operating expenses by centralizing certain functions at our corporate offices and consolidating certain functions in each of our market clusters.

Income Taxes. Our effective tax rate was approximately 39% for both periods presented in 2007 and 43% for both periods presented in 2008, which differs from the federal statutory rate of 34% due to the effect of state income taxes and certain of our expenses that are not deductible for tax purposes. The effective tax rate for 2008 also includes expected additional tax expense from the vesting of restricted stock throughout 2008 at stock prices lower than the grant-date stock prices of those awards.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect reported amounts and related disclosures. We consider an accounting estimate to be critical if:

• it requires assumptions to be made that were uncertain at the time the estimate was made; and

• changes in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition.

Our critical accounting policies are described in Item 7 of our annual report on Form 10-K for the year ended December 31, 2007. There have been no material changes to our critical accounting policies during the third quarter of 2008.

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS 141 (revised 2007), Business Combinations which replaces SFAS 141, Business Combinations. SFAS 141(R) requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS 141(R) also requires the acquirer in a business combination achieved in stages to recognize the identifiable assets and liabilities, as well at the noncontrolling interest in the acquiree, at the full amounts of their fair values. SFAS 141(R) applies to all transactions or other events in which an entity obtains control of one or more businesses. SFAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.

In March 2008, the FASB issued SFAS 161, Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133 which changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosure about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application permitted. We have not completed our evaluation of the impact of the adoption of SFAS 161.

In April 2008, the FASB issued FASB Staff Position ("FSP") 142-3, Determination of the Useful Life of Intangible Assets, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142, Goodwill and Other Intangible Assets. The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS
141 (revised 2007), and other U.S. generally accepted accounting principles. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. We have not completed our evaluation of the impact of the adoption of FSP 142-3.

Three Months Ended September 30, 2008 Compared to the Three Months Ended September 30, 2007

The following summary table presents a comparison of our results of operations for the three months ended September 30, 2007 and 2008 with respect to certain of our key financial measures. These changes illustrated in the table are discussed in greater detail below. This section should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in Item 1 of this report.

                                                Three months ended
                                                  September 30,                    Change
                                               2007            2008             $              %
Net revenue                                $ 33,285,701    $ 30,571,244    $ (2,714,457 )     (8.2 )%
Cost of services                             12,501,619      10,418,913      (2,082,706 )    (16.7 )
Selling, general and administrative
expenses                                     12,240,981      11,104,606      (1,136,375 )     (9.3 )
Corporate general and administrative
expenses                                      2,671,256       2,214,838        (456,418 )    (17.1 )
Interest expense                              3,583,319       2,045,164      (1,538,155 )    (42.9 )

Net Revenue. The $2.7 million decrease in net revenue during the three months ended September 30, 2008 was partially due to a $1.6 million decrease at our Miami-Fort Lauderdale market cluster, which was primarily due to the absence of revenue from broadcasting the Florida Marlins baseball games, which contributed $0.9 million during the same period in 2007. The program rights agreement to broadcast the Florida Marlins baseball games was not renewed in 2008. The decrease in net revenue was also due to an additional $0.7 million decrease at our Miami-Fort Lauderdale market cluster, a $0.7 million decrease at our Fort Myers-Naples market cluster, and a $0.3 million decrease at our Greenville-New Bern-Jacksonville market cluster due to weaker performance in those clusters. These decreases were partially offset by a $0.3 million increase at our Philadelphia market cluster due to improved performance in that cluster.

Cost of Services. The $2.1 million decrease in cost of services during the three months ended September 30, 2008 was primarily due to a $1.9 million decrease at our Miami-Fort Lauderdale market cluster that was primarily due to the non-renewal of the Florida Marlins baseball team program rights agreement, which cost $1.8 million during the same period in 2007. Cost of services also decreased at six of our ten other market clusters and were comparable to the same period in 2007 at the remaining four market clusters.

Selling, General and Administrative Expenses. The $1.1 million decrease in selling, general and administrative expenses during the three months ended September 30, 2008 was primarily due to a $0.8 million decrease at our Miami-Fort Lauderdale market cluster primarily due to lower sales commissions as a result of the decrease in net revenue. This decrease was partially offset by a $0.3 million increase at our Philadelphia market cluster primarily due to higher sales commissions as a result of the increase in net revenue. Selling, general and administrative expenses also decreased at eight of our nine other market clusters and were comparable to the same period in 2007 at the remaining market cluster.

Corporate General and Administrative Expenses. The $0.5 million decrease in corporate general and administrative expenses during the three months ended September 30, 2008 was primarily due to a decrease in stock-based compensation expense and severance expense.

Interest Expense. The $1.5 million decrease in interest expense during the three months ended September 30, 2008 was primarily due to a decrease in our borrowing costs and voluntary repayments of borrowings under our credit facility.

Nine Months Ended September 30, 2008 Compared to the Nine Months Ended September 30, 2007

The following summary table presents a comparison of our results of operations for the nine months ended September 30, 2007 and 2008 with respect to certain of our key financial measures. These changes illustrated in the table are discussed in greater detail below. This section should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in Item 1 of this report.

                                                Nine months ended
                                                  September 30,                    Change
                                               2007            2008             $              %
Net revenue                                $ 98,897,353    $ 90,977,719    $ (7,919,634 )     (8.0 )%
Cost of services                             35,428,293      29,647,257      (5,781,036 )    (16.3 )
Selling, general and administrative
expenses                                     36,012,966      34,908,556      (1,104,410 )     (3.1 )
Corporate general and administrative
expenses                                      7,728,012       7,109,008        (619,004 )     (8.0 )
Interest expense                             10,487,802       6,839,564      (3,648,238 )    (34.8 )
Loss on extinguishment of long-term
debt                                            366,599              -         (366,599 )       -

Net Revenue. The $7.9 million decrease in net revenue during the nine months ended September 30, 2008 was partially due to a $3.1 million decrease at our Miami-Fort Lauderdale market cluster, which was primarily due to the absence of revenue from broadcasting the Florida Marlins baseball games, which contributed $1.9 million during the same period in 2007. The decrease in net revenue was also due to an additional $1.2 million decrease at our Miami-Fort Lauderdale market cluster, a $2.6 million decrease at our Fort Myers-Naples market cluster, a $1.5 million decrease at our Las Vegas market cluster, and a $0.5 million decrease at our Greenville-New Bern-Jacksonville market cluster due to weaker performance in those clusters.

Cost of Services. The $5.8 million decrease in cost of services during the nine months ended September 30, 2008 was primarily due to a $4.0 million decrease at our Miami-Fort Lauderdale market cluster that was primarily due to the non-renewal of the Florida Marlins baseball team program rights agreement, which cost $3.9 million during the same period in 2007. The decrease in cost of services was also due to a $0.5 million decrease at our Las Vegas market cluster primarily due to a promotional campaign in 2007 for one of our radio stations in that market. Cost of services also decreased at eight of our nine other market clusters and were comparable to the same period in 2007 at the remaining market cluster.

Selling, General and Administrative Expenses. The $1.1 million decrease in selling, general and administrative expenses during the nine months ended September 30, 2008 was primarily due to a $0.6 million

decrease at our Miami-Fort Lauderdale market cluster, a $0.5 million decrease at our Las Vegas market cluster primarily due to lower sales commissions as a result of the decrease in net revenue in those markets. These decreases were partially offset by a $0.5 million increase at our Philadelphia market cluster primarily due to higher sales commissions as a result of the increase in net revenue.

Corporate General and Administrative Expenses. The $0.6 million decrease in corporate general and administrative expenses during the three months ended September 30, 2008 was primarily due to a decrease in stock-based compensation expense.

Interest Expense. The $3.6 million decrease in interest expense during the nine months ended September 30, 2008 was primarily due to a decrease in our borrowing costs and voluntary repayments of borrowings under our credit facility.

Loss on Extinguishment of Long-Term Debt. In connection with an amendment to our credit agreement in 2007, we recorded a $0.4 million loss on extinguishment of long-term debt during the nine months ended September 30, 2007.

Liquidity and Capital Resources

Overview. Our primary sources of liquidity are internally generated cash flow and our revolving credit loan. Our primary liquidity needs have been, and for the next twelve months and thereafter are expected to continue to be, for working capital, debt service, and other general corporate purposes, including capital expenditures and radio station acquisitions. Historically, our capital expenditures have not been significant. In addition to property and equipment associated with radio station acquisitions, our capital expenditures have generally been, and are expected to continue to be, related to the maintenance of our studio and office space and the technological improvement, including upgrades necessary to broadcast HD Radio, and maintenance of our broadcasting towers and equipment. We have also purchased or constructed office and studio space in some of our markets to facilitate the consolidation of our operations. Other liquidity needs for the next twelve months and thereafter may also include additional share repurchases and cash dividends.

Our credit agreement permits us to repurchase up to $50.0 million of our common stock and on June 10, 2004, our board of directors has authorized us to repurchase up to $25.0 million of our Class A common stock over a one-year period from the date of authorization, which was extended on May 12, 2005 for one additional year. On May 24, 2006, our board of directors authorized us to increase the remaining balance under our previous authorization from $21.3 million to $25.0 million and to extend the repurchase period to May 23, 2007. Effective May 24, 2007, our board of directors authorized the extension of the repurchase period for one additional year. Effective May 24, 2008, our board of directors authorized the extension of the repurchase period for one additional year. From June 10, 2004 to November 7, 2008, we repurchased 1.5 million shares of our Class A common stock for an aggregate $12.7 million.

Our credit agreement also permits us to pay cash dividends on our common stock in an amount up to an aggregate of $10.0 million per year. During the three and nine months ended September 30, 2008, we paid $1.5 million and $4.4 million for cash dividends, respectively. On September 10, 2008, our board of directors declared a cash dividend of $0.05 per share on our Class A and Class B common stock. The dividend of $1.2 million in the aggregate was paid on October 16, 2008, to stockholders of record on September 30, 2008.

We expect to provide for future liquidity needs through one or a combination of the following sources of liquidity:

• internally generated cash flow;

• our credit facility;

• additional borrowings, other than under our existing credit facility, to the extent permitted thereunder; and

• additional equity offerings.

We believe that we will have sufficient liquidity and capital resources to permit us to provide for our liquidity requirements and meet our financial obligations for the next twelve months. However, continuation or worsening of the economic downturn in the United States or in the markets we serve, poor financial results, unanticipated acquisition opportunities or unanticipated expenses could give rise to defaults under our credit facility, additional debt servicing requirements or other additional financing or liquidity requirements sooner than we expect and we may not secure financing when needed or on acceptable terms.

Our ability to reduce our total leverage ratio as required by our credit facility by increasing operating cash flow and/or decreasing long-term debt will determine how much, if any, of the remaining commitments under the revolving portion of our credit facility will be available to us in the future. Continuation or worsening of the economic downturn in the United States or in the markets we serve, poor financial results or unanticipated expenses could result in our failure to maintain or lower our total leverage ratio and we may not be permitted to make any additional borrowings under the revolving portion of our credit facility. We may make additional share repurchases and future dividend payments instead of repaying indebtedness with such funds and if we incur additional indebtedness in order to make such repurchases or dividend payments, our total debt ratio may be adversely affected and we may not be permitted to make additional borrowings under the revolving portion of our credit facility.

The following summary table presents a comparison of our cash flows for the nine months ended September 30, 2007 and 2008 with respect to certain of our key measures affecting our liquidity. The changes set forth in the table are discussed in greater detail below. This section should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in Item 1 of this report.

                                                             Nine months ended September 30,
                                                               2007                    2008
Net cash provided by operating activities                $      13,236,456         $  16,750,306
Net cash used in investing activities                          (46,977,330 )          (1,200,898 )
Net cash provided by (used in) financing activities             31,284,334           (17,116,247 )

Net decrease in cash and cash equivalents                $      (2,456,540 )       $  (1,566,839 )

Net Cash Provided By Operating Activities. Net cash provided by operating activities increased by $3.5 million during the nine months ended September 30, 2008 compared to the same period in 2007 primarily due to a $4.2 million decrease in cash paid for station operating expenses, a $3.2 million decrease in cash paid for interest, and a $1.0 million increase in cash refunded for income taxes. These increases were partially offset by a $4.9 million decrease in cash receipts from the sale of advertising airtime.

Net Cash Used In Investing Activities. Net cash used in investing activities in the nine months ended September 30, 2008 was primarily due to cash payments for capital expenditures of $1.3 million. Net cash used in investing activities for the same period in 2007 was primarily due to cash payments of $42.2 million for the acquisition of WJBR-FM in Wilmington, DE, cash payments of $2.7 million for the acquisition KBET-AM in Las Vegas, NV and cash payments for capital expenditures of $2.3 million.

Net Cash Provided By (Used In) Financing Activities. Net cash used in financing activities in the nine months ended September 30, 2008 was primarily due to voluntary repayments of $12.0 million of borrowings under our credit facility, cash dividends of $4.4 million and $0.8 million for repurchases of our Class A common stock. Net cash provided by financing activities for the same period in 2007 was primarily due to additional borrowings of $42.0 million from our credit facility to finance the acquisition of WJBR-FM in Wilmington, DE, which were partially offset by cash dividends of $4.4 million, $3.1 million for repurchases of our Class A common stock, and voluntary repayments of $3.0 million of borrowings under our credit facility.

Credit Facility. As of October 31, 2008, the outstanding balance of our credit facility was $179.1 million. As of September 30, 2008, our credit facility consisted of a revolving credit loan with a maximum commitment of $102.1 million and a term loan with a remaining balance of $126.1 million. The revolving credit loan includes a $10.0 million sub-limit for letters of credit, which may be increased to $20.0 million upon our request and with the approval of the Bank of Montreal, Chicago Branch in its capacity as the letter of credit issuer. At our election, the revolving credit loan and term loan may bear interest at either the base rate or LIBOR plus a margin that is determined by our debt to operating cash flow ratio. The base rate is equal to the higher of the prime rate or the overnight federal funds rate plus 0.5%. Interest on base rate loans is payable quarterly through maturity. Interest on LIBOR loans is payable on the last day of the selected LIBOR period and, if the selected period is longer than three months, every three months after the beginning of the LIBOR period. The revolving credit loan and term loan carried interest, based on LIBOR, at 6.4888% and 4.6274% as of December 31, 2007 and September 30, 2008, respectively, and mature on June 30, 2015. The scheduled reductions in the amount available under the revolving credit loan may require principal repayments if the outstanding balance at that time exceeds the maximum amount available under the revolving credit loan.

As of September 30, 2008, we had $46.6 million in remaining commitments available under the revolving portion of our credit facility; however, as of September 30, 2008, our maximum consolidated total debt covenant would have limited additional borrowings to $8.2 million.

Our credit facility is secured by substantially all of our assets and is guaranteed jointly and severally by all of our subsidiaries. The guarantees were issued to our lenders for repayment of the outstanding balance of the credit . . .