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 nine and three months ended September 30, 2009 as compared to the nine and three months ended September 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 nine months ended September 30, 2009 as compared to the nine months ended September 30, 2008:

Acquisitions

† On March 14, 2008, we acquired three radio stations in San Francisco, California, that in 2008 increased our depreciation and amortization expense as we acquired amortizable assets with lives of a short duration.

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 7.625% Senior Subordinated Notes ("Notes") that had a higher interest rate than the rate under our senior debt.

† During the nine months ended September 30, 2009, we repurchased $59.6 million of our Notes and recognized a net gain on extinguishment of debt of $19.3 million (net of deferred financing expenses). During the nine months ended September 30, 2008, we repurchased $58.0 million of our Notes and recognized a net gain on extinguishment of debt of $4.0 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.

† 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.

Nine Months Ended September 30, 2009 As Compared To The Nine Months Ended September 30, 2008

Net Revenues



                            Nine Months Ended
                     September 30,      September 30,
                         2009               2008
                          (dollars in millions)
Net Revenues        $         276.4    $         334.7
Amount of Change    $         (58.3 )
Percentage Change             (17.4 )%

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. Our net revenues were impacted the most by the decline in net revenues for those radio stations located in the Boston, Sacramento, San Francisco and Seattle markets. Management anticipates that the negative revenue trends in the radio industry will continue into the fourth quarter of 2009, but reverse in early 2010 as the economy and the advertising environment rebounds and we compare favorably to prior periods of economic downturn.

Station Operating Expenses



                                     Nine Months Ended
                              September 30,      September 30,
                                  2009               2008
                                   (dollars in millions)
Station Operating Expenses   $         192.0    $         210.7
Amount of Change             $         (18.7 )
Percentage Change                       (8.9 )%

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 balance of the year as we realize the effects of previously implemented cost-cutting measures together with the decline in variable station operating expenses.

Depreciation And Amortization Expense



                                                 Nine Months Ended
                                         September 30,       September 30,
                                             2009                2008
                                               (dollars in millions)
Depreciation And Amortization Expense   $          12.7     $          16.0
Amount of Change                        $          (3.3 )
Percentage Change                                 (20.6 )%

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

Corporate General And Administrative Expenses



                                                           Nine Months Ended
                                                  September 30,         September 30,
                                                       2009                 2008
                                                         (dollars in millions)
Corporate General And Administrative Expenses    $           17.4     $            21.5
Amount of Change                                 $           (4.1 )
Percentage Change                                           (19.0 )%

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 $1.0 million associated with certain legal proceedings during 2008 which did not reoccur in 2009. The decrease was offset by a $1.1 million net increase in deferred compensation expense as our deferred compensation liability generally tracks the movements in the stock market.

Operating Loss



                            Nine Months Ended
                     September 30,      September 30,
                         2009               2008
                          (dollars in millions)
Operating Loss      $         (13.4 )  $         (88.0 )
Amount of Change    $          74.6
Percentage Change              84.8 %

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



                             Nine Months Ended
                     September 30,       September 30,
                         2009                2008
                           (dollars in millions)
Interest Expense    $          23.8     $          34.8
Amount of Change    $         (11.0 )
Percentage Change             (31.6 )%

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

Loss From Continuing Operations Before Income Taxes (Benefit)



                                                        Nine Months Ended
                                                 September 30,      September 30,
                                                     2009               2008
                                                      (dollars in millions)
Loss From Continuing Operations Before
Income Taxes (Benefit)                          $         (17.6 )  $        (115.7 )
Amount of Change                                $          98.1
Percentage Change                                          84.8 %

The decrease was primarily attributable to: (1) a decrease in operating loss for the reasons as described above under Operating Loss; (2) a $15.2 million increase in gain on the retirement of our Notes as we repurchased debt at a larger discount; and (3) a decrease in our interest expense of $11.0 million for the reasons described above under Interest Expense.

Income Taxes (Benefit)



                                 Nine Months Ended
                          September 30,      September 30,
                              2009               2008
                               (dollars in millions)
Income Taxes (Benefit)   $           0.7    $         (32.3 )
Amount of Change         $          33.0
Percentage Change                  102.1 %

Our income tax expense was higher in 2009 as a result of recording a valuation allowance for the full amount of our net deferred tax assets, net of deferred tax liabilities (after consideration for any net deferred tax liabilities associated with non-amortizable assets such as broadcasting licenses and goodwill). The recording of a valuation allowance commenced during the third quarter of 2008, which was required due to the cumulative losses incurred by us over the past three years.

Loss From Discontinued Operations, Net Of Tax Benefit



                                                         Nine Months Ended
                                                 September 30,       September 30,
                                                      2009               2008
                                                       (dollars in millions)
Loss From Discontinued Operations, Net Of
Tax Benefit                                     $              -    $          (3.5 )
Amount of Change                                $            3.5
Percentage Change                                          100.0 %

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



                            Nine Months Ended
                     September 30,      September 30,
                         2009               2008
                          (dollars in millions)
Net Loss            $         (18.3 )  $         (86.9 )
Amount of Change    $          68.6
Percentage Change              79.0 %

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

Net Revenues



                            Three Months Ended
                     September 30,       September 30,
                         2009                2008
                           (dollars in millions)
Net Revenues        $          99.8     $         115.6
Amount of Change    $         (15.8 )
Percentage Change             (13.7 )%

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. Our net revenues were impacted the most by the decline in net revenues for those radio stations located in the Boston, Portland, Sacramento and Seattle markets.

Station Operating Expenses



                                     Three Months Ended
                              September 30,       September 30,
                                  2009                2008
                                    (dollars in millions)
Station Operating Expenses   $          66.3     $          72.1
Amount of Change             $          (5.8 )
Percentage Change                       (8.0 )%

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
                                         September 30,        September 30,
                                             2009                 2008
                                               (dollars in millions)
Depreciation And Amortization Expense   $           4.1      $           4.5
Amount of Change                        $          (0.4 )
Percentage Change                                  (8.9 )%

Depreciation and amortization expense decreased as 2008 was impacted by acquisitions during the first quarter of 2008 and 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,         September 30,
                                                      2009                   2008
                                                          (dollars in millions)
Corporate General And Administrative Expenses    $           5.8      $              6.2
Amount of Change                                 $          (0.4 )
Percentage Change                                           (6.5 )%

Corporate general and administrative expenses decreased primarily due to certain cost cutting measures that commenced during the fourth quarter of 2008. The decrease was offset by a $0.8 million net increase in deferred compensation expense as our deferred compensation liability generally tracks the movements in the stock market.

Operating Income



                            Three Months Ended
                     September 30,       September 30,
                         2009                2008
                           (dollars in millions)
Operating Income    $          23.4     $          32.8
Amount of Change    $          (9.4 )
Percentage Change             (28.6 )%

The decrease in operating income was due to 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
                     September 30,       September 30,
                         2009                2008
                           (dollars in millions)
Interest Expense    $           7.9     $          10.4
Amount of Change    $          (2.5 )
Percentage Change             (24.0 )%

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

Income From Continuing Operations Before Income Taxes



                                                         Three Months Ended
                                                 September 30,        September 30,
                                                      2009                 2008
                                                        (dollars in millions)
Income From Continuing Operations Before
Income Taxes                                    $           18.7     $           23.8
Amount of Change                                $           (5.1 )
Percentage Change                                          (21.4 )%

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

Income Taxes



                            Three Months Ended
                     September 30,       September 30,
                         2009                2008
                           (dollars in millions)
Income Taxes        $           0.4     $          20.0
Amount of Change    $         (19.6 )
Percentage Change             (97.9 )%

Due to the cumulative losses incurred by us over the past three years, effective with the third quarter of 2008, we recorded a valuation allowance for the full amount of our net deferred tax assets, net of deferred tax liabilities (after consideration for any net deferred tax liabilities associated with non-amortizable assets such as broadcasting licenses and goodwill). Even though we continue to record in each quarter a full valuation allowance for the full amount of our net deferred tax assets, the initial recording substantially increased our income tax expense during the third quarter of 2008.

Income From Discontinued Operations, Net Of Taxes



                                                               Three Months Ended
                                                      September 30,         September 30,
                                                          2009                   2008
                                                              (dollars in millions)
Income From Discontinued Operations, Net Of Taxes    $             -      $              0.5
Amount of Change                                     $          (0.5 )
Percentage Change                                             (104.2 )%

During the third quarter of 2008, we completed the transaction to sell the assets of three radio stations in Rochester, New York.

Net Income



                            Three Months Ended
                     September 30,      September 30,
                         2009               2008
                          (dollars in millions)
Net Income          $          18.3    $           4.3
Amount of Change    $          14.0
Percentage Change             329.4 %

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

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. Any such impairment could be material.

Liquidity And Capital Resources

Liquidity

Historically, we have carried significant amounts of debt. As of September 30, 2009, we had outstanding $788.1 million in debt, including: (1) $758.0 million under our Bank Facility, which is comprised of $385.0 million in Term Loan and $373.0 million in drawn Revolver; (2) $23.9 million in Notes; (3) finance method lease obligations of $4.5 million; and (4) $1.5 million in a letter of credit.

As of September 30, 2009, we had $20.1 million in cash and cash equivalents. During the nine months ended September 30, 2009, we decreased our outstanding debt by $47.1 million (which included a discount of $19.9 million on the retirement of our Notes).

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. While our operating cash flow has been reduced from prior periods during the recent economic downturn, it has remained positive and adequate to fund our operating needs. As a result, we have not been required to rely upon, and we do not anticipate having to rely upon, our Revolver to fund our operations. Notwithstanding the foregoing, we may from time to time seek to amend our existing Bank Facility or obtain other funding or additional financing.

The undrawn amount of the Revolver was $275.5 million as of September 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 September 30, 2009, we would be limited to borrowings significantly less than the undrawn limit unless such borrowings were used to repay indebtedness or for transactions that increase cash flow for purposes of covenant calculation. We plan to fund the amortization of the Term Loan with our available Revolver capacity and cash flow from operations.

Our lenders require that we remain in compliance with certain covenants in our credit agreements. We believe that over the next 12 months we can maintain our compliance with these covenants. Our ability to maintain compliance with our convenants will be highly dependent on our results of operations as the economy begins to recover from the current economic downturn and our ability to implement, to the extent necessary, remedial measures such as further reductions in operating costs, opportunistically repurchasing debt at a discount, selling assets and taking advantage of actions permitted under our credit agreement such as including cash from unrestricted subsidiaries in Consolidated Operating Cash Flow. If we were to enter into an agreement with our lenders for covenant compliance relief, such relief could result in higher interest expense. Failure to comply with our financial covenants or other terms of our credit agreements and the failure to negotiate and obtain any required 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.

The current economic downturn has reduced demand for advertising in general, including advertising on our radio stations. Management anticipates that the negative revenue trends in the radio industry will continue into the fourth quarter of 2009, but reverse in early 2010 as the economy and the advertising environment rebounds and we compare favorably to prior periods of economic downturn.

Our Credit Agreement

Our credit agreement (the "Bank Facility"), currently with a syndicate of 26 lenders, 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 Loan"). The Term Loan reduces (from and after September 30, 2009) in quarterly amounts starting at $15 . . .