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 26, 2009. 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 six and three months ended June 30, 2009 as compared to the six and three months ended June 30, 2008. Our results of operations during the relevant periods: (i) represent the operations of the radio stations:
(1) owned and operated by us; (2) operated by us pursuant to time brokerage agreements ("TBAs"); and (ii) exclude those radio stations 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 six months ended June 30, 2009 as compared to the six months ended June 30, 2008:

Acquisitions

† On March 14, 2008, we acquired three radio stations in San Francisco, California, that in 2009 increased our depreciation and amortization 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, for net cash proceeds of $12.2 million. The results for these stations were recognized as discontinued operations.

† On March 14, 2008, we sold three of our seven Seattle, Washington, radio stations and recognized a gain of $10.0 million on the disposition of these assets.

† On January 15, 2008, we sold an Austin, Texas, radio station for $20.0 million in cash.

Financing

† Our interest expense decreased due to: (1) a decrease in interest rates; (2) a decrease in our outstanding debt; and (3) the redemption of a portion of our Senior Subordinated Notes that had a higher interest rate than the rate under our senior debt.

† During the six months ended June 30, 2009, we repurchased $39.4 million of Senior Subordinated Notes and recognized a net gain on extinguishment of debt of $16.1 million (net of deferred financing expenses). During the six months ended June 30, 2008, we repurchased $41.7 million of Senior Subordinated Notes and recognized a gain on extinguishment of debt of $2.4 million.

Other

† During the second quarters of 2009 and 2008, we recorded an impairment loss of $67.7 and $184.6 million, respectively, in connection with our review of certain intangible assets under the provisions of Statement of Financial Accounting Standard ("SFAS") No. 142.

†

† Since the third quarter of 2008, we have increased the valuation allowance for our net deferred tax assets (after consideration for any net deferred tax liabilities associated with non-amortizable assets such as

broadcasting licenses and goodwill) 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 $6.7 million was necessary as a result of the status of our then ongoing divestiture process.

Six Months Ended June 30, 2009 As Compared To The Six Months Ended June 30, 2008



Net Revenues



                                            Six Months Ended
                                    June 30, 2009      June 30, 2008
                                         (dollars in millions)
               Net Revenues        $         176.7    $         219.2
               Amount of Change    $         (42.5 )
               Percentage Change             (19.4 )%

Our decrease in net revenues was impacted by the current economic downturn that caused declines in advertising and radio revenues. Net revenues declined in most of the markets where we operate stations. Those stations that were impacted the most by the decline in net revenues were radio stations located in the Boston, San Francisco, Seattle and Sacramento markets. Management anticipates that the negative trend in radio industry revenues will continue for the next several quarters, but we expect to see lower levels of decline in the second half of 2009.

Station Operating Expenses



                                                 Six Months Ended
                                         June 30, 2009      June 30, 2008
                                              (dollars in millions)
           Station Operating Expenses   $         125.7    $         138.6
           Amount of Change             $         (12.9 )
           Percentage Change                       (9.3 )%

The decrease in station operating expenses was primarily due to: (1) a decrease in net revenues as described above as certain variable expenses decrease with a corresponding decrease in net revenues; and (2) certain cost reduction initiatives that commenced during the fourth quarter of 2008, including but not limited to reductions in workforce and the elimination of the 401(k) employer matching contribution. Management anticipates that the trend of declining station operating expenses will continue for the next several quarters as we realize the effects of previously implemented cost-cutting measures together with the decline in variable station operating expense.

Depreciation and Amortization Expense



                                                      Six Months Ended
                                              June 30, 2009       June 30, 2008
                                                    (dollars in millions)
     Depreciation and Amortization Expense   $           8.5     $          11.5
     Amount of Change                        $          (3.0 )
     Percentage Change                                 (26.0 )%

Depreciation and amortization expense decreased in 2009 as the expense in 2008 was higher due to acquisitions during the fourth quarter of 2007, which included certain amortizable assets with lives of a short duration.

Corporate General and Administrative Expenses



                                                          Six Months Ended
                                                  June 30, 2009       June 30, 2008
                                                        (dollars in millions)
 Corporate General and Administrative Expenses   $          11.6     $          15.4
 Amount of Change                                $          (3.8 )
 Percentage Change                                         (24.7 )%

Corporate general and administrative expenses decreased primarily due to: (1) a decrease in non-cash compensation expense of $1.7 million as a result of a decrease in the fair value of equity awards issued; and (2) a decrease in legal expense of $1.3 million associated with certain legal proceedings during 2008 which did not reoccur in 2009.

Operating Loss



                                            Six Months Ended
                                    June 30, 2009      June 30, 2008
                                         (dollars in millions)
               Operating Loss      $         (36.9 )  $        (120.8 )
               Amount of Change    $          83.9
               Percentage Change             (69.5 )%

The decrease in operating loss was primarily due to a reduction in impairment loss of $116.9 million in connection with our review of broadcasting licenses and goodwill in the second quarter of 2009 as compared to our review of goodwill during the second quarter of 2008. The decrease in operating loss was offset by:
(1) a decrease in net revenues for the reasons described above under Net Revenues, net of a decrease in station operating expenses for the reasons described under Station Operating Expenses; and (2) a decrease in net gain on sale or disposal of assets of $10.0 million as a result of the sale in 2008 of our Seattle stations.

Interest Expense



                                            Six Months Ended
                                    June 30, 2009       June 30, 2008
                                          (dollars in millions)
               Interest Expense    $          16.0     $          24.4
               Amount of Change    $          (8.4 )
               Percentage Change             (34.4 )%

The decrease in interest expense was primarily due to: (1) a decrease in interest rates on outstanding debt during the six months ended June 30, 2009 as compared to the six months ended June 30, 2008; (2) a decline in outstanding debt upon which interest is computed; and (3) the repurchase of our Senior Subordinated Notes, which have a higher interest rate than the replacement debt.

Loss From Continuing Operations Before Income Taxes (Benefit)



                                                            Six Months Ended
                                                    June 30, 2009      June 30, 2008
                                                         (dollars in millions)
Loss From Continuing Operations Before Income
Taxes (Benefit)                                    $         (36.3 )  $        (139.5 )
Amount of Change                                   $         103.2
Percentage Change                                            (74.0 )%

The decrease was primarily attributable to: (1) a decrease in operating loss for the reasons as described above under Operating Loss; (2) a $13.7 million increase on gain on the retirement of our Senior Subordinated Notes as we repurchased debt at a higher discount; and (3) a decrease in our interest expense of $8.4 million for the reasons described above under Interest Expense.

Income Taxes (Benefit)



                                              Six Months Ended
                                      June 30, 2009       June 30, 2008
                                            (dollars in millions)
            Income Taxes (Benefit)   $           0.3     $         (52.3 )
            Amount of Change         $          52.6
            Percentage Change                 (100.5 )%

Our income tax expense was higher in 2009 as a result of recording a full valuation allowance for the full amount of our net deferred tax assets as a result of the cumulative losses incurred by us over the past three years (the recording of a full valuation allowance commenced during the third quarter of 2008).

Loss From Discontinued Operations, Net Of Tax Benefit



                                                            Six Months Ended
                                                    June 30, 2009       June 30, 2008
                                                          (dollars in millions)
Loss From Discontinued Operations, Net Of Tax
Benefit                                            $             -     $          (4.0 )
Amount of Change                                   $           4.0
Percentage Change                                           (100.5 )%

The net change was primarily due to a non-cash impairment loss of $6.7 million (before income tax benefit) 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 Loss



                                            Six Months Ended
                                    June 30, 2009      June 30, 2008
                                         (dollars in millions)
               Net Loss            $         (36.6 )  $         (91.1 )
               Amount of Change    $          54.5
               Percentage Change             (59.8 )%

The net change was primarily attributable to the reasons described above under Loss From Continuing Operations Before Income Taxes (Benefit) and Income Taxes (Benefit).

Three Months Ended June 30, 2009 As Compared To The Three Months Ended June 30, 2008

Net Revenues



                                           Three Months Ended
                                    June 30, 2009       June 30, 2008
                                          (dollars in millions)
               Net Revenues        $         101.3     $         123.8
               Amount of Change    $         (22.5 )
               Percentage Change             (18.2 )%

The decrease in net revenues was impacted by the current economic downturn that contributed to weak demand for advertising in general, including advertising on our radio stations. Those stations that were impacted the most by the decline in net revenues were radio stations located in the Boston, San Francisco, Seattle and Sacramento markets.

Station Operating Expenses



                                               Three Months Ended
                                        June 30, 2009       June 30, 2008
                                              (dollars in millions)
          Station Operating Expenses   $          67.2     $          74.5
          Amount of Change             $          (7.3 )
          Percentage Change                       (9.8 )%

The decrease in station operating expenses was primarily due to: (1) the factors leading to the decrease in Net Revenues as described above as certain variable expenses decrease with a corresponding decrease in net revenues; and (2) certain cost reduction initiatives that commenced during the fourth quarter of 2008, such as reductions in workforce and the elimination of the 401(k) employer matching contribution.

Depreciation and Amortization Expense



                                                     Three Months Ended
                                             June 30, 2009        June 30, 2008
                                                   (dollars in millions)
    Depreciation and Amortization Expense   $           4.2      $           5.5
    Amount of Change                        $          (1.3 )
    Percentage Change                                 (23.5 )%

Depreciation and amortization expense decreased as 2008 was impacted by acquisitions during the fourth quarter of 2007, which included certain amortizable assets with lives of a short duration.

Corporate General and Administrative Expenses



                                                         Three Months Ended
                                                 June 30, 2009        June 30, 2008
                                                       (dollars in millions)
Corporate General and Administrative Expenses   $           5.9      $           7.0
Amount of Change                                $          (1.1 )
Percentage Change                                         (15.7 )%

Corporate general and administrative expenses decreased primarily due to a decrease in legal expense of $0.8 million associated with certain legal proceedings during 2008 which did not reoccur in 2009.

Operating Loss



                                           Three Months Ended
                                    June 30, 2009       June 30, 2008
                                          (dollars in millions)
               Operating Loss      $         (43.7 )   $        (147.9 )
               Amount of Change    $         104.2
               Percentage Change             (70.5 )%

The decrease in operating loss was primarily due to a reduction in impairment loss of $116.9 million in connection with our review of broadcasting licenses and goodwill in the second quarter of 2009 as compared to our review of goodwill during the second quarter of 2008. The decrease in operating loss was offset by a decrease in net revenues for the reasons described above under Net Revenues, net of a decrease in station operating expenses for the reasons described under Station Operating Expenses.

Interest Expense



                                           Three Months Ended
                                    June 30, 2009       June 30, 2008
                                          (dollars in millions)
               Interest Expense    $           7.9     $          10.9
               Amount of Change    $          (3.0 )
               Percentage Change             (27.6 )%

The decrease in interest expense was primarily due to: (1) a decrease in interest rates on outstanding debt during the three months ended June 30, 2009 as compared to the three months ended June 30, 2008; (2) a decline in outstanding debt upon which interest is computed; and (3) the repurchase of our Senior Subordinated Notes, which have a higher interest rate than the replacement debt.

Loss From Continuing Operations Before Income Tax Benefit



                                                           Three Months Ended
                                                    June 30, 2009       June 30, 2008
                                                          (dollars in millions)
Loss From Continuing Operations Before Income
Tax Benefit                                        $         (43.1 )   $        (154.8 )
Amount of Change                                   $         111.7
Percentage Change                                            (72.2 )%

The decrease was primarily attributable to a decrease in operating loss for the reasons as described above under Operating Loss and an increase in gains on the retirement of our Senior Subordinated Notes as we repurchased debt at a higher discount.

Income Tax Benefit



                                           Three Months Ended
                                    June 30, 2009       June 30, 2008
                                          (dollars in millions)
              Income Tax Benefit   $          (1.2 )   $         (58.5 )
              Amount of Change     $          57.3
              Percentage Change              (98.0 )%

Our income tax expense was higher in 2009 as a result of recording a full valuation allowance for the full amount of our net deferred tax assets as a result of the cumulative losses incurred by us over the past three years (the recording of a full valuation allowance commenced during the third quarter of 2008).

Net Loss



                                           Three Months Ended
                                    June 30, 2009       June 30, 2008
                                          (dollars in millions)
               Net Loss            $         (41.9 )   $         (96.3 )
               Amount of Change    $          54.4
               Percentage Change             (56.5 )%

The net change was primarily attributable to the reasons described above under Loss From Continuing Operations Before Income Tax Benefit and Income Tax Benefit.

Future Impairments

We may determine that it will be necessary to take impairment charges in future periods for various reasons, including if the economic downturn worsens and/or continues for an extended period of time. Although the annual impairment test of our broadcasting licenses and goodwill was performed in the second quarter of 2009, we may be required to retest prior to our next annual evaluation.

Liquidity And Capital Resources

Our Credit Agreement

Our credit agreement (the "Bank Facility"), currently with a syndicate of 24 banks, provides for $1,050 million in senior secured credit that matures on June 30, 2012, which is comprised of $650 million in revolving credit ("Revolver") and $400 million in a term loan ("Term A"). The Term A reduces beginning September 30, 2009 in quarterly amounts starting at $15 million and increasing to $60 million. The Revolver provides us with working capital and capital for general corporate purposes, including capital expenditures and any or all of the following: Term A principal payments, repurchases of our Senior Subordinated Notes, repurchases of Class A common stock, dividends and acquisitions. The Bank Facility is secured by a pledge of 100% of the capital stock and other equity interest in all of our wholly owned subsidiaries. The Bank Facility requires us to comply with certain financial covenants which are defined terms within the agreement, including: (1) Consolidated Funded Indebtedness not to exceed 6 times Consolidated Operating Cash Flow; and
(2) Consolidated Operating Cash Flow to be at a minimum of 2 times Consolidated Interest Charges. Management believes we are in compliance with the financial covenants and all other terms of the Bank Facility.

Liquidity

As of June 30, 2009, we had outstanding $806.7 million in senior debt, including: (1) $761.0 million under our Bank Facility, which is comprised of $400.0 million in Term A and $361.0 million in drawn Revolver; (2) $44.1 million in Senior Subordinated Notes; and (3) $1.5 million in a letter of credit.

The undrawn amount of the Revolver was $287.5 million as of June 30, 2009. The amount of the Revolver available to us, however, is a function of covenant compliance at the time of borrowing. Based on our financial covenant analysis as of June 30, 2009, and assuming any newly borrowed funds were not used to repay indebtedness or in a manner which had a positive effect on Consolidated Operating Cash Flow, we could borrow $42.9 million of the $287.5 million in available Revolver. The entire amount of the available Revolver could be borrowed by us to the extent such borrowed funds are used to repay indebtedness. To this end, we plan to use our available Revolver capacity and cash flow from operations to fund the amortization of the Term A.

As of June 30, 2009, we had $17.9 million in cash and cash equivalents. During the six months ended June 30, 2009, we decreased our net outstanding debt by $28.5 million (which included a discount of $16.6 million on the retirement of our senior subordinated debt).

We may seek to obtain other funding or additional financing from time to time. We believe that cash on hand and cash from operating activities, together with available borrowings under the Bank Facility, will be sufficient to permit us to meet our liquidity requirements. Our lenders require that we remain in compliance with certain covenants in our credit agreements. We believe that in 2009 we will maintain our compliance with these covenants.

The current economic downturn has reduced demand for advertising in general, including advertising on our radio stations. Management anticipates that the negative trends in radio industry revenues will continue for the next several quarters, but we expect to see lower levels of decline in the second half of 2009. If our revenues decline more than planned due to difficult market conditions, our ability to maintain compliance with the financial covenants in our credit agreements would become increasingly difficult without remedial measures. Such remedial measures would include management's plans to further reduce operating costs, opportunistically repurchase debt at a discount and the sale of assets. If our remedial measures were not successful in maintaining covenant compliance, then we would negotiate with our lenders for relief, which relief could result in higher interest expense. Failure to comply with our financial covenants or other terms of our credit agreements and failure to negotiate relief from our lenders could result in the acceleration of the maturity of all outstanding debt. Under these circumstances, the acceleration of our debt could have a material adverse effect on our business.

NYSE - Continued Listing

Our common stock is currently listed on the New York Stock Exchange ("NYSE"). The continued listing requirements of the NYSE include, among other things:
(i) a minimum share closing price of $1.00 over a 30 consecutive day trading period; (ii) a minimum market capitalization of $15 million over a 30 consecutive day trading period; and (iii) a minimum of either $50 million in market capitalization or $50 million of shareholders' equity (these two thresholds are reduced from $75 million on a "pilot program" basis through October 31, 2009). While we are presently in compliance with the NYSE continued listing requirements, it is possible our common stock may in the future be subject to suspension and delisting procedures.

Operating Activities

Net cash flows provided by operating activities were $28.0 million and $55.5 million for the six months ended June 30, 2009 and 2008, respectively. The decrease in 2009 was mainly attributable to: (1) a decrease in net revenues, net of station operating expenses, of $29.6 million; and (2) a decrease in prepaid and refundable taxes of $14.2 million as we received most of our state and federal tax refunds during the prior year.

Investing Activities

Net cash flows used in investing activities were $0.9 million for the six months . . .