ENTRAVISION COMMUNICATIONS CORP - Quarter Report: 2009 September (Form 10-Q)

form10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-15997

ENTRAVISION COMMUNICATIONS CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		95-4783236
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2425 Olympic Boulevard, Suite 6000 West, Santa Monica, California 90404

(Address of principal executive offices) (Zip Code)

(310) 447-3870

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

	Large accelerated filer ¨	Accelerated filer x
	Non-accelerated filer ¨	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of November 2, 2009, there were 51,882,443 shares, $0.0001 par value per share, of the registrant’s Class A common stock outstanding, 22,587,433 shares, $0.0001 par value per share, of the registrant’s Class B common stock outstanding and 9,352,729 shares, $0.0001 par value per share, of the registrant’s Class U common stock outstanding.

ENTRAVISION COMMUNICATIONS CORPORATION

FORM 10-Q FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2009

TABLE OF CONTENTS


		Page Number
PART I. FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	3

	CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2009 (UNAUDITED) AND DECEMBER 31, 2008	3

	CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008	4

	CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008	5

	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	6

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30

ITEM 4.	CONTROLS AND PROCEDURES	31

PART II. OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	31

ITEM 1A.	RISK FACTORS	31

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	31

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	32

ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	32

ITEM 5.	OTHER INFORMATION	32

ITEM 6.	EXHIBITS	32

Forward-Looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, 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, but not limited to, any projections of earnings, revenue 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,” “could,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this annual report. Except for our ongoing obligation to disclose material information as required by the federal securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

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 inherent risks and uncertainties. Some of the key factors impacting these risks and uncertainties include, but are not limited to:

•

risks related to our history of operating losses, our substantial indebtedness or our ability to raise capital;

•

provisions of the agreements governing our debt instruments, including the amended credit facility agreement governing our syndicated bank credit facility, or the amended credit facility agreement, which restricts certain aspects of the operation of our business;

•

our continued compliance with all of our obligations, including financial covenants and ratios, under the amended credit facility agreement;

•

cancellations or reductions of advertising, whether due to the ongoing global financial crisis, the recession or otherwise;

•

our relationship with Univision Communications Inc., or Univision;

•

subject to limitations contained in the amended credit facility agreement, the overall success of our acquisition strategy, which includes developing media clusters in key U.S. Hispanic markets, and the integration of any acquired assets with our existing business;

•

the impact of rigorous competition in Spanish-language media and in the advertising industry generally;

•

industry-wide market factors and regulatory and other developments affecting our operations;

•

the duration and severity of the ongoing global financial crisis and the recession;

•

the effectiveness of our recently-implemented cost-saving measures; and

•

the impact of any impairment of our assets.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see the section entitled “Risk Factors,” beginning on page 24 of our Annual Report on Form 10-K for the year ended December 31, 2008.

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	September 30,			December 31,
	2009			2008
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	20,824		$	64,294
Trade receivables, net of allowance for doubtful accounts of $5,141 and $5,640 (including related parties of $4,807 and $0)		48,316			44,855
Prepaid expenses and other current assets (including related parties of $274 and $274)		5,532			5,252
Total current assets		74,672			114,401
Property and equipment, net		83,298			90,898
Intangible assets subject to amortization, net (including related parties of $28,421 and $30,161)		29,381			31,380
Intangible assets not subject to amortization		294,127			298,042
Goodwill		45,845			45,845
Other assets		9,661			10,473
Total assets	$	536,984		$	591,039

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt (including related parties of $1,000 and $1,000)	$	1,000		$	1,002
Advances payable, related parties		118			118
Accounts payable, accrued expenses and other liabilities (including related parties of $3,890 and $4,092)		52,208			57,647
Total current liabilities		53,326			58,767
Long-term debt, less current maturities (including related parties of $1,000 and $2,000)		362,949			405,521
Other long-term liabilities		12,872			14,038
Deferred income taxes		9,388			-
Total liabilities		438,535			478,326

Commitments and contingencies (note 4)

Stockholders' equity
Class A common stock, $0.0001 par value, 260,000,000 shares authorized; shares issued
2009 53,027,123; 2008 45,877,400		5			5
Class B common stock, $0.0001 par value, 40,000,000 shares authorized; shares issued and
outstanding 2009 22,587,433; 2008 22,887,433		2			2
Class U common stock, $0.0001 par value, 40,000,000 shares authorized; shares issued and
outstanding 2009 9,352,729; 2008 15,652,729		1			2
Additional paid-in capital		936,134			934,749
Accumulated deficit		(837,693	)		(822,045	)
		98,449			112,713
Treasury stock, Class A common stock, $0.0001 par value, 2009 1,232,680 shares; 2008 None		-			-
Total stockholders' equity		98,449			112,713
Total liabilities and stockholders' equity	$	536,984		$	591,039

See Notes to Consolidated Financial Statements

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except share and per share data)

	Three-Month Period						Nine-Month Period
	Ended September 30,						Ended September 30,
	2009			2008			2009			2008

Net revenue (including related parties of $0, $0, $0 and $182)	$	50,754		$	60,988		$	141,165		$	179,573

Expenses:
Direct operating expenses (including related parties of
$1,676, $3,010, $5,407 and $8,582) (including non-cash stock-
based compensation of $159, $173, $489 and $462)		21,030			25,583			63,690			76,258
Selling, general and administrative expenses (including non-cash
stock-based compensation of $204, $217, $618 and $579)		9,542			11,394			28,341			33,026
Corporate expenses (including non-cash stock-based
compensation of $339, $506, $1,098 and $1,409)		3,351			3,772			10,602			12,703
Depreciation and amortization (includes direct
operating of $3,806, $4,706, $11,724 and $13,432;
selling, general and administrative of $1,156, $1,006, $3,245 and
$2,991; and corporate of $310, $286, $924 and $762) (including
related parties of $580, $580, $1,740 and $1,740)		5,272			5,998			15,893			17,185
Impairment charge		-			440,020			2,720			440,020
		39,195			486,767			121,246			579,192
Operating income (loss)		11,559			(425,779	)		19,919			(399,619	)
Interest expense (including related parties of $29, $44, $89 and $156) (note 2)		(8,227	)		(8,172	)		(21,762	)		(27,595	)
Interest income		70			622			388			1,339
Loss on debt extinguishment		-			-			(4,716	)		-
Income (loss) before income taxes		3,402			(433,329	)		(6,171	)		(425,875	)
Income tax (expense) benefit		(2,802	)		78,847			(9,311	)		76,167
Income (loss) before equity in net income (loss) of
nonconsolidated affiliate and discontinued operations		600			(354,482	)		(15,482	)		(349,708	)
Equity in net income (loss) of nonconsolidated affiliate, net of tax		73			(9	)		(166	)		(173	)
Income (loss) from continuing operations		673			(354,491	)		(15,648	)		(349,881	)
Loss from discontinued operations,
net of tax benefit of $0, $0, $0 and $604		-			-			-			(1,573	)
Net income (loss) applicable to common stockholders	$	673		$	(354,491	)	$	(15,648	)	$	(351,454	)

Basic and diluted earnings per share:
Net income (loss) per share from continuing operations applicable to
common stockholders, basic and diluted	$	0.01		$	(3.98	)	$	(0.19	)	$	(3.80	)
Net loss per share from discontinued operations, basic and diluted	$	-		$	-		$	-		$	(0.02	)
Net income (loss) per share applicable to common stockholders,
basic and diluted	$	0.01		$	(3.98	)	$	(0.19	)	$	(3.82	)

Weighted average common shares outstanding, basic		83,683,908			89,130,413			84,049,423			92,029,671
Weighted average common shares outstanding, diluted		83,935,319			89,130,413			84,049,423			92,029,671

See Notes to Consolidated Financial Statements

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

	Nine-Month Period
	Ended September 30,
	2009			2008
Cash flows from operating activities:
Net loss	$	(15,648	)	$	(351,454	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		15,893			17,185
Impairment charge		2,720			440,020
Deferred income taxes		8,534			(77,537	)
Amortization of debt issue costs		298			302
Amortization of syndication contracts		1,689			2,255
Payments on syndication contracts		(2,119	)		(2,135	)
Equity in net loss of nonconsolidated affiliate		166			173
Non-cash stock-based compensation		2,205			2,450
Gain on sale of media properties and other assets		(102	)		-
Non-cash expenses related to debt extinguishment		945			-
Change in fair value of interest rate swap agreements		(3,850	)		3,647
Changes in assets and liabilities, net of effect of acquisitions and dispositions:
(Increase) decrease in accounts receivable		(3,100	)		3,648
Increase in prepaid expenses and other assets		(621	)		(100	)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		3,187			(3,205	)
Effect of discontinued operations		-			(2,230	)
Net cash provided by operating activities		10,197			33,019
Cash flows from investing activities:
Proceeds from sale of property and equipment and intangibles		114			101,498
Purchases of property and equipment and intangibles		(9,207	)		(13,415	)
Purchase of a business		-			(22,885	)
Deposits on acquisitions		-			(200	)
Effect of discontinued operations		-			(194	)
Net cash provided by (used in) investing activities		(9,093	)		64,804
Cash flows from financing activities:
Proceeds from issuance of common stock		255			785
Payments on long-term debt		(42,572	)		(11,036	)
Repurchase of Class U common stock		-			(10,380	)
Repurchase of Class A common stock		(1,075	)		(46,538	)
Excess tax benefits from exercise of stock options		-			(25	)
Payments of deferred debt and offering costs		(1,182	)		-
Net cash used in financing activities		(44,574	)		(67,194	)
Net increase (decrease) in cash and cash equivalents		(43,470	)		30,629
Cash and cash equivalents:
Beginning		64,294			86,945
Ending	$	20,824		$	117,574

Supplemental disclosures of cash flow information:
Cash payments for:
Interest	$	22,583		$	23,716
Income taxes	$	777		$	1,395

See Notes to Consolidated Financial Statements

ENTRAVISION COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2009

1. BASIS OF PRESENTATION

Presentation

The consolidated financial statements included herein have been prepared by Entravision Communications Corporation (the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2008 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008. The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated financial statements and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2009 or any other future period.

In June 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162” (“SFAS 168”). SFAS 168 made the FASB Accounting Standards Codification (“ASC”), also known as the “Codification”, the single source of authoritative nongovernmental U.S. generally accepted accounting principles (“GAAP”), except for additional authoritative rules and interpretive releases issued by the SEC. The Codification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by organizing all the authoritative literature related to a particular topic within a consistent structure. The Codification was effective for the Company’s financial statements issued beginning in the quarter ending September 30, 2009. All accounting references have been updated, and therefore SFAS references have been replaced with ASC references.

Certain amounts in the Company’s prior period notes to the financial statements have been reclassified to conform to current period presentation. All discussions and amounts in the consolidated financial statements and the related notes to consolidated statements, for all periods presented relate to continuing operations only, unless otherwise noted.

Discontinued Operations

The Company sold the outdoor advertising business in May 2008 and no longer has outdoor operations. In accordance with ASC 360-10-45, “Impairment or Disposal of Long-Lived Assets”, the Company has reported the results of its outdoor advertising operations for all periods in discontinued operations within the consolidated statements of operations. In the consolidated statements of cash flows, the cash flows of discontinued operations have been reclassified for all periods presented and are separately classified within the respective categories with those of continuing operations.

Liquidity and Capital Resources

As a result of the ongoing global financial crisis and the recession, and their impact on the advertising marketplace and its customers, the Company has experienced declining net revenues, which have had a significant negative impact on its cash flows and consolidated adjusted EBITDA as defined as net income (loss) plus loss (gain) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate and syndication programming amortization less syndication programming payments. At September 30, 2009, the Company’s total consolidated debt outstanding was $363.9 million.

The Company has taken a number of steps to address its liquidity as result of the decline in its consolidated adjusted EBITDA. As a result of management’s budgeting process for 2009, taking into consideration the impact that the further rapid deterioration of the economy could have on its results of operations, the Company amended its syndicated bank credit facility agreement on March 16, 2009. Among other things, the amendment requires compliance with a maximum allowed leverage ratio covenant, calculated as the ratio of consolidated total debt outstanding to trailing-twelve-month consolidated adjusted EBITDA. In addition, the amendment imposes certain additional restrictions on liquidity and operations, including a significantly higher interest rate on outstanding principal and a sweep of 75% of quarterly excess cash flow, as defined in the amendment, to repay principal on the outstanding consolidated debt. At the time the Company entered into the amendment to the syndicated bank credit facility agreement in the first quarter of 2009, the Company made a prepayment of $40 million to reduce the outstanding amount of its term loans.

In order to maintain compliance with the maximum allowed leverage ratio covenant, the Company will need to achieve certain quarterly, trailing-twelve-month consolidated adjusted EBITDA targets. The Company believes that, as a result of the cost-saving measures and the amendment of the syndicated bank credit facility agreement discussed above, the Company will be able to achieve the trailing-twelve-month consolidated adjusted EBITDA targets under its amended syndicated bank credit facility agreement, and, therefore, the Company believes that it will be able to maintain compliance with the maximum allowed leverage ratio covenant for at least the next twelve months. Under the amended syndicated bank credit facility agreement, the debt to trailing-twelve-month consolidated adjusted EBITDA ratio is required to be below 6.75 at the end of the fourth quarter of 2009, below 6.50 at the end of the first two quarters of 2010 and below 6.25 at the end of the third quarter of 2010.

The Company has also implemented significant cost-saving measures, including reductions in personnel, executive bonuses, employee benefits, general corporate expense and capital expenditures in the fourth quarter of 2008, and reductions in salary expense, promotional expense, bonuses, general corporate expense and capital expenditures in the first quarter of 2009. The Company currently estimates that these cost-saving measures have resulted in an expense reduction of approximately $14 million for the nine-month period ended September 30, 2009. The Company currently anticipates that these cost-saving measures will result in additional expense reductions of approximately $6 million during the fourth quarter of 2009. Through the Company’s ongoing efforts to improve its profitability and cash flows, the Company is continuing to review its business for areas of possible additional improvement, greater efficiency and further cost reductions.

While the Company has had a history of operating losses in some periods and operating income in other periods, the Company also has a history of generating significant positive cash flows from its operations. The Company reported a net loss of $15.6 million and had positive cash flow from operations of $10.2 million for the nine-month period ended September 30, 2009. Additionally, as of September 30, 2009, the Company had a cash balance of $20.8 million, debt outstanding under the syndicated bank credit facility of $361.9 million, other debt of $2.0 million and an accumulated deficit of $837.7 million. The Company expects to fund its working capital requirements, capital expenditures and payments of principal and interest on outstanding indebtedness, with cash on hand, and cash flows from operations. The Company currently anticipates that funds generated from operations, including cost-saving measures the Company has taken, and available borrowings under its syndicated bank credit facility will be sufficient to meet the Company’s anticipated cash requirements for at least the next twelve months.

2. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

Related Party

Univision currently owns approximately 10% of the Company’s common stock on a fully-converted basis based on public filings made by Univision. In connection with Univision’s merger with Hispanic Broadcasting Corporation (“HBC”) in September 2003, Univision entered into an agreement with the U.S. Department of Justice (“DOJ”), pursuant to which Univision agreed, among other things, to ensure that its percentage ownership of the Company would not exceed 15% by March 26, 2006 and would not exceed 10% by March 26, 2009.

In February 2008, the Company repurchased 1.5 million shares of Class U common stock held by Univision for $10.4 million. In May 2009, the Company repurchased an additional 0.9 million shares of Class A common stock held by Univision for $0.5 million.

The Company’s Class U common stock held by Univision has limited voting rights and does not include the right to elect directors. However, as the holder of all of the Company’s issued and outstanding Class U common stock, Univision currently has the right to approve any merger, consolidation or other business combination involving the Company, any dissolution of the Company and any assignment of the Federal Communications Commission, or FCC, licenses for any of the Company’s Univision-affiliated television stations. Each share of Class U common stock is automatically convertible into one share of the Company’s Class A common stock (subject to adjustment for stock splits, dividends or combinations) in connection with any transfer to a third party that is not an affiliate of Univision.

Univision acts as the Company’s exclusive sales representative for the sale of all national advertising aired on Univision-affiliate television stations. During the three-month periods ended September 30, 2009 and 2008, the amount paid by the Company to Univision in this capacity was $1.7 million and $2.5 million, respectively. During the nine-month periods ended September 30, 2009 and 2008, the amount paid by the Company to Univision in this capacity was $4.8 million and $7.1 million, respectively.

In August 2008, the Company entered into an agreement with Univision pursuant to which it granted Univision the right to negotiate the terms of agreements providing for the carriage of the Company’s Univision- and TeleFutura-affiliated television station signals by cable, satellite and internet-based television service providers. The agreement also provides terms relating to compensation to be paid to the Company with respect to agreements that are entered into for the carriage of its Univision- and TeleFutura-affiliated television station signals. As of September 30, 2009, the amount due to the Company from Univision was $4.8 million related to the agreements for the carriage of its Univision and TeleFutura-affiliated television station signals.

Stock-Based Compensation

The Company measures all stock-based awards using a fair value method and recognizes the related stock-based compensation expense in the consolidated financial statements over the requisite service period. As stock-based compensation expense recognized in the Company’s consolidated financial statements is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures.

Stock-based compensation expense related to grants of stock options and restricted stock units was $0.7 million and $0.8 million for the three-month periods ended September 30, 2009 and 2008, respectively. Stock-based compensation expense related to grants of stock options and restricted stock units was $2.2 million and $2.2 million for the nine-month periods ended September 30, 2009 and 2008, respectively.

Stock Options

Stock-based compensation expense related to stock options is based on the fair value on the date of grant using the Black-Scholes option pricing model and is amortized over the vesting period, generally between 1 to 3 years.

The fair value of each stock option granted was estimated using the following weighted-average assumptions:

	Nine-Month Period
	Ended September 30,
	2009
Fair value of options granted	$	1.20
Expected volatility		80	%
Risk-free interest rate		2.9	%
Expected lives	7.0 years
Dividend rate		―

As of September 30, 2009, there was approximately $2.7 million of total unrecognized compensation expense related to grants of stock options that is expected to be recognized over a weighted-average period of 1.2 years.

Restricted Stock Units

Stock-based compensation expense related to restricted stock units is based on the fair value of the Company’s stock price on the date of grant and is amortized over the vesting period, generally between 1 to 4 years.

As of September 30, 2009, there was approximately $1.9 million of total unrecognized compensation expense related to grants of restricted stock units that is expected to be recognized over a weighted-average period of 0.9 years.

Income (Loss) Per Share

The following table illustrates the reconciliation of the basic and diluted income per share computations required by ASC 260-10, “Earnings Per Share” (in thousands, except per share and per share data):

	Three-Month Period					Nine-Month Period
	Ended September 30,					Ended September 30,
	2009		2008			2009			2008
Basic earnings per share:
Numerator:
Income (loss) from continuing operations	$	673	$	(354,491	)	$	(15,648	)	$	(349,881	)
Loss from discontinued operations		-		-			-			(1,573	)
Net income (loss) applicable to common stockholders	$	673	$	(354,491	)	$	(15,648	)	$	(351,454	)

Denominator:
Weighted average common shares outstanding		83,683,908		89,130,413			84,049,423			92,029,671

Per share:
Net income (loss) per share from continuing operations	$	0.01	$	(3.98	)	$	(0.19	)	$	(3.80	)
Net loss per share from discontinued operations		-		-			-			(0.02	)
Net income (loss) per share applicable to common stockholders	$	0.01	$	(3.98	)	$	(0.19	)	$	(3.82	)

Diluted earnings per share:
Numerator:
Income (loss) from continuing operations	$	673	$	(354,491	)	$	(15,648	)	$	(349,881	)
Loss from discontinued operations		-		-			-			(1,573	)
Net income (loss) applicable to common stockholders	$	673	$	(354,491	)	$	(15,648	)	$	(351,454	)

Denominator:
Weighted average common shares outstanding		83,683,908		89,130,413			84,049,423			92,029,671
Dilutive securities:
Stock options, restricted stock units
and employee stock purchase plan		251,411		-			-			-
Diluted shares outstanding		83,935,319		89,130,413			84,049,423			92,029,671

Per share:
Net income (loss) per share from continuing operations	$	0.01	$	(3.98	)	$	(0.19	)	$	(3.80	)
Net loss per share from discontinued operations		-		-			-			(0.02	)
Net income (loss) per share applicable to common stockholders	$	0.01	$	(3.98	)	$	(0.19	)	$	(3.82	)

Basic income (loss) per share is computed as net loss divided by the weighted average number of shares outstanding for the period. Diluted income (loss) per share reflects the potential dilution, if any, that could occur from shares issuable through stock options, restricted stock units and convertible securities.

For the three-month period ended September 31, 2009, a total of 11,311,649 shares of dilutive securities were not included in the computation of diluted income per share because the exercise prices of the dilutive securities were greater than the average market price of the Company's common stock. For the nine-month period ended September 30, 2009, all dilutive securities have been excluded as their inclusion would have had an antidilutive effect on loss per share. The securities whose conversion would result in an incremental number of shares that would be included in determining the weighted average shares outstanding for diluted earnings per share if their effect was not antidilutive was 158,546 equivalent shares of dilutive securities for the nine-month period ended September 30, 2009.

For the three- and nine-month periods ended September 30, 2008, all dilutive securities have been excluded as their inclusion would have had an antidilutive effect on loss per share. The securities whose conversion would result in an incremental number of shares that would be included in determining the weighted average shares outstanding for diluted earnings per share if their effect was not antidilutive was 99,629 and 244,376 equivalent shares of dilutive securities for the three- and nine-month periods ended September 30, 2008, respectively.

Acquisition of Assets

In April 2009, the Company acquired the assets of television station KREN-TV in the Reno, Nevada market for approximately $4.3 million. The Company reduced the carrying value of the assets of television station KREN-TV to its fair value of $1.6 million by recording a carrying value adjustment of $2.7 million. This charge is included in the consolidated statements of operations for continuing operations.

The following is a summary of the carrying value of the Company’s acquisition of the net assets of television station KREN-TV in Reno, Nevada (in millions):


Property and equipment	$	1.4
Intangible assets subject to amortization - Favorable lease		0.1
Intangible assets not subject to amortization - FCC license		0.1
		1.6

In accordance with ASC 805, “Business Combinations”, the Company evaluated the transferred set of activities, assets, inputs, outputs and processes in this acquisition and determined that the acquisition did not constitute a business.

Assets Held for Sale and Discontinued Operations

In May 2008, the Company sold the outdoor advertising business to Lamar Advertising Co. for $101.5 million. The Company reviewed the portfolio of media properties and decided to sell its outdoor advertising business as it was a non-core business where the opportunity to grow to scale was limited. The Company decided that the net proceeds of the sale would improve financial flexibility, including debt and stock repurchases.

As a result of the disposition, the Company no longer has outdoor advertising operations. Accordingly, the financial statements reflect the outdoor segment revenue and expenses as discontinued operations.

Summarized financial information in the consolidated statements of operations for the discontinued outdoor operations is as follows (in thousands):

	Nine-Month Period
	Ended September 30,
	2008
Net revenue	$	13,730

Loss before income taxes		(2,177	)
Income tax benefit		604
Loss from discontinued operations, net of tax	$	(1,573	)

In presenting discontinued operations, corporate overhead expenses have not been allocated consistent with historical outdoor segment presentation.

Syndicated Bank Credit Facility

In September 2005, the Company entered into a syndicated bank credit facility with a $650 million senior secured syndicated bank credit facility, consisting of a 7 ½ year $500 million term loan and a 6 ½ year $150 million revolving facility. The term loan under the syndicated bank credit facility has been drawn in full, the proceeds of which were used (i) to refinance $250 million outstanding under the former syndicated bank credit facility, (ii) to complete a tender offer for the previously outstanding $225 million senior subordinated notes, and (iii) for general corporate purposes. The term loan matures in 2013 and the revolving facility expires in 2012. The Company’s ability to make additional borrowings under the syndicated bank credit facility is subject to compliance with certain financial covenants, including financial ratios, and other conditions set forth in the syndicated bank credit facility.

On March 16, 2009, the Company entered into an amendment to the syndicated bank credit facility agreement. Pursuant to this amendment, among other things:

•

The interest that the Company pays under the credit facility increased. Both the revolver and term loan borrowings under the amendment bear interest at a variable interest rate based on either LIBOR or a base rate, in either case plus an applicable margin that varies depending upon the leverage ratio. Borrowings under both the revolver and term loan bear interest at LIBOR plus a margin of 5.25% when the leverage ratio is greater than or equal to 5.0. When the leverage ratio is less than 5.0 but greater than or equal to 4.0, borrowings under both the revolver and term loan will bear interest at LIBOR plus a margin of 4.25%. When the leverage ratio is less than 4.0, borrowings under both the revolver and term loan will bear interest at LIBOR plus a margin of 3.25%. The term loan bears interest at LIBOR plus a margin of 5.25%, for a total interest rate of 5.54% at September 30, 2009. As of September 30, 2009, $361.9 million of the term loan was outstanding.

•

The total amount of the revolver facility was reduced from $150 million to $50 million. Borrowings under the revolver are restricted to $5 million in the aggregate during any rolling 30-day period when the leverage ratio is less than 1.0 of the maximum allowable ratio during the applicable period. New conditions have been added for loans under the revolver facility greater than $5 million. The revolving facility bears interest at LIBOR plus a margin ranging from 3.25% to 5.25% based on leverage covenants. As of September 30, 2009, the Company had approximately $1 million in outstanding letters of credit and $49 million was available under the revolving facility for future borrowings. In addition, the Company pays a quarterly unused commitment fee ranging from 0.25% to 0.50% per annum, depending on the level of facility used.

•

There are more stringent financial covenants relating to maximum allowed leverage ratio, maximum capital expenditures and fixed charge coverage ratio. Beginning March 16, 2009 through December 31, 2009, the maximum allowed leverage ratio, or the ratio of consolidated total debt to trailing-twelve-month consolidated adjusted EBITDA, is 6.75. The maximum allowed leverage ratio decreases to 6.50 in the first quarter of 2010. On September 30, 2010 the maximum allowed leverage ratio decreases to 6.25 and on December 31, 2010 the maximum allowed leverage ratio decreases to 6.0. Beginning March 31, 2011 and through the term of the agreement, the maximum allowed leverage ratio is 5.50. The actual leverage ratio was 6.7 to 1 as of September 30, 2009. Therefore, the Company was in compliance with this covenant as of this date. From March 31, 2009, through the term of the agreement, the minimum required fixed charge coverage ratio is 1.15.

•

There is a mandatory prepayment clause for 100% of the proceeds of certain asset dispositions, regardless of the leverage ratio. In addition, if the Company has excess cash flow, as defined in the syndicated bank credit facility, 75% of such excess cash flow must be used to reduce the outstanding loan balance on a quarterly basis.

•

Beginning March 31, 2009, the senior leverage ratio and net leverage ratio were eliminated.

•

Capital expenditures may not exceed $10 million in each of 2009 and 2010.

•

The Company is restricted from making acquisitions and investments when the leverage ratio is greater than 4.0, with an exception to permit the completion of the acquisition of television assets serving the Reno, Nevada market.

•

The Company is restricted from making future repurchases of shares of common stock, except under a limited circumstance, which the Company utilized in May 2009 and may utilize again in the future.

•

The Company is restricted from making any further debt repurchases in the secondary market.

The amendment also contains additional covenants, representations and provisions that are usual and customary for credit facilities of this type. All other provisions of the credit facility agreement, as amended, remain in full force and effect unless expressly amended or modified by the amendment.

At the time of entering into this amendment, the Company made a prepayment of $40 million to reduce the outstanding amount of the term loans and paid the lenders an amendment fee.

The Company recorded a loss on debt extinguishment of $4.7 million for fees, unamortized finance costs and interest rate swap agreement termination costs associated with the amendment to the syndicated bank credit facility during the nine-month period ended September 30, 2009.

The syndicated bank credit facility is secured by substantially all of the assets, as well as the pledge of the stock of substantially all of the subsidiaries, including the special purpose subsidiary formed to hold our FCC licenses. The syndicated bank credit facility contains customary events of default. If an event of default occurs and is continuing, the Company might be required to repay all amounts then outstanding under the syndicated bank credit facility. Lenders holding more than 50% of the loans and commitments under the syndicated bank credit facility may elect to accelerate the maturity of loans upon the occurrence and during the continuation of an event of default.

The syndicated bank credit facility contains certain financial covenants relating to maximum leverage ratio, maximum capital expenditures and minimum fixed charge coverage ratio. The covenants become increasingly restrictive in the later years of the syndicated bank credit facility. The syndicated bank credit facility also requires the Company to maintain FCC licenses for broadcast properties and contains restrictions on the incurrence of additional debt, the payment of dividends, the repurchase of shares of the Company’s common stock, the making of acquisitions and the sale of assets.

The carrying amount and estimated fair value of our term loan as of September 30, 2009 was $361.9 million and $355.2 million, respectively. The estimated fair value of our term loan is based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for instruments with similar terms.

Derivative Instruments

The Company uses interest rate swap agreements to manage its exposure to the risks associated with changes in interest rates. The Company does not enter into derivative instruments for speculation or trading purposes. As of September 30, 2009, the Company had three interest rate swap agreements with a $206 million aggregate notional amount, with quarterly reductions, that expire on October 1, 2010, and a fourth interest rate swap agreement with a $155.9 million notional amount, with quarterly increases, that also expires on October 1, 2010. The three interest rate swap agreements convert a portion of the variable rate term loan into a fixed rate obligation of 9.71%, which includes a margin of 5.25%. The fourth interest rate swap agreement converts a portion of the variable rate term loan into a fixed rate obligation of 10.31%, which includes a margin of 5.25%. It is expected that the term loan amount will not exceed the notional amount of the four interest rate swap agreements. As of September 30, 2009 and 2008, these interest rate swap agreements were not designated for hedge accounting treatment, and as a result, changes in their fair values are reflected in earnings.

For the three-month period ended September 30, 2009, the Company recognized a decrease of $1.3 million in interest expense related to the increase in fair value of the interest rate swap agreements. For the three-month period ended September 30, 2008, the Company recognized an increase of $0.4 million in interest expense related to the decrease in fair value of the interest rate swap agreements.

For the nine-month period ended September 30, 2009, the Company recognized a decrease of $3.8 million in interest expense related to the increase in fair value of the interest rate swap agreements. For the nine-month period ended September 30, 2008, the Company recognized an increase of $3.6 million in interest expense related to the decrease in fair value of the interest rate swap agreements.

The fair value of the interest rate swap agreements at each balance sheet date was as follows (in millions):

		September 30, 2009		December 31, 2008
Derivatives Not Designated As Hedging Instruments	Balance Sheet Location	Fair Value		Fair Value
Interest rate swap agreements	Accounts payable, accrued expenses and other liabilities	$	19.4	$	23.2

The following table presents the effect of the interest rate swap agreements on our consolidated statements of operations for the three-and nine month periods ended September 30, 2009 and 2008 (in millions):

		Three-Month Period					Nine-Month Period
Derivatives Not Designated As Hedging	Location of	Ended September 30,					Ended September 30,
Instruments	Income (Loss)	2009		2008			2009		2008
Interest rate swap agreements	Interest expense	$	1.3	$	(0.4	)	$	3.8	$	(3.6	)

Fair Value Measurements

On January 1, 2008, the Company adopted ASC 820, “Fair Value Measurements and Disclosures”, which defines and establishes a framework for measuring fair value and expands disclosures about fair value measurements. In accordance with ASC 820, the Company has categorized its financial assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below.

Level 1 – Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the company has the ability to access at the measurement date.

Level 2 – Financial assets and liabilities whose values are based on quoted prices for similar attributes in active markets; quoted prices in markets where trading occurs infrequently; and inputs other than quoted prices that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 – Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The following table presents the financial liabilities measured at fair value on a recurring basis, based on the fair value hierarchy as of September 30, 2009 and December 31, 2008 (in millions):

	September 30, 2009		December 31, 2008
Liabilities	Level 2		Level 2
Interest rate swap agreements	$	19.4	$	23.2

Interest Rate Swap Agreements

The fair values of the interest rate swap agreements represent the present value of expected future cash flows estimated to be received from or paid to a marketplace participant in settlement of these instruments. They are valued using inputs including broker/dealer quotes, adjusted for non-performance risk, based on valuation models that incorporate observable market information and are classified within Level 2 of the fair value hierarchy.

Recent Accounting Pronouncements

In August 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05, “Measuring Liabilities at Fair Value” (“ASU 2009-05”). ASU 2009-05 clarifies ASC 820, “Fair Value Measurements and Disclosures”. ASU 2009-05 provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following methods: 1) a valuation technique that uses a) the quoted price of the identical liability when traded as an asset or b) quoted prices for similar liabilities or similar liabilities when traded as assets and/or 2) a valuation technique that is consistent with the principles of ASC 820. ASU 2009-05 also clarifies that when estimating the fair value of a liability, a reporting entity is not required to adjust to include inputs relating to the existence of transfer restrictions on that liability. This standard is effective beginning in the fourth quarter 2009. The Company is currently evaluating the impact of this standard on the consolidated financial statements.

In October 2009, the FASB issued ASU No. 2009-13, “Multiple-Deliverable Revenue Arrangements” (“ASU 2009-13”). ASU 2009-13 addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting and how arrangement consideration shall be measured and allocated to the separate units of accounting in the arrangement. ASU 2009-13 is effective for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The Company is currently evaluating the impact of this standard on the consolidated financial statements.

In June 2009, the FASB issued an amendment to ASC 860, “Transfers and Servicing”. The amendment eliminates the concept of a qualifying special-purpose entity (“QSPE”), therefore requiring these entities to be evaluated under the accounting guidance for consolidation of variable interest entities (“VIE”). Other changes include additional considerations when determining if sale accounting is appropriate, as well as enhanced disclosures requirements. This standard is effective January 1, 2010. The Company is currently evaluating the impact of this standard on the consolidated financial statements.

In June 2009, the FASB issued an amendment to ASC 810, “Consolidation”. The amendment eliminates the scope exception for QSPEs and requires an entity to reconsider its previous consolidation conclusions reached under the VIE consolidation model, including (i) whether an entity is a VIE, (ii) whether the enterprise is the VIE’s primary beneficiary, and (iii) the required financial statement disclosures. The new standard can be applied as of the effective date, with a cumulative-effect adjustment to retained earnings recognized on that date, or retrospectively, with a cumulative-effect adjustment to retained earnings recognized as of the beginning of the first year adjusted. This standard is effective January 1, 2010. The Company is currently evaluating the impact of this standard on the consolidated financial statements.

3. SEGMENT INFORMATION

The Company operates in two reportable segments: television broadcasting and radio broadcasting.

Television Broadcasting

The Company owns and/or operates 53 primary television stations located primarily in California, Colorado, Connecticut, Florida, Massachusetts, Nevada, New Mexico, Texas and Washington, D.C.

Radio Broadcasting

The Company owns and operates 48 radio stations (37 FM and 11 AM) located primarily in Arizona, California, Colorado, Florida, Nevada, New Mexico and Texas.

Separate financial data for each of the Company’s operating segments is provided below. Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses and impairment charge. There were no significant sources of revenue generated outside the United States during the three- and nine-month periods ended September 30, 2009 and 2008. The Company evaluates the performance of its operating segments based on the following (in thousands):

	Three-Month Period						% Change			Nine-Month Period						% Change
	Ended September 30,						2009 to			Ended September 30,						2009 to
	2009			2008			2008			2009			2008			2008
Net Revenue
Television	$	32,019		$	37,479			(15	)%	$	92,037		$	112,528			(18	)%
Radio		18,735			23,509			(20	)%		49,128			67,045			(27	)%
Consolidated		50,754			60,988			(17	)%		141,165			179,573			(21	)%

Direct operating expenses
Television		13,022			16,421			(21	)%		40,202			48,535			(17	)%
Radio		8,008			9,162			(13	)%		23,488			27,723			(15	)%
Consolidated		21,030			25,583			(18	)%		63,690			76,258			(16	)%

Selling, general and administrative expenses
Television		4,579			5,487			(17	)%		14,861			16,598			(10	)%
Radio		4,963			5,907			(16	)%		13,480			16,428			(18	)%
Consolidated		9,542			11,394			(16	)%		28,341			33,026			(14	)%

Depreciation and amortization
Television		3,897			4,527			(14	)%		11,764			13,104			(10	)%
Radio		1,375			1,471			(7	)%		4,129			4,081			1	%
Consolidated		5,272			5,998			(12	)%		15,893			17,185			(8	)%

Segment operating profit
Television		10,521			11,044			(5	)%		25,210			34,291			(26	)%
Radio		4,389			6,969			(37	)%		8,031			18,813			(57	)%
Consolidated		14,910			18,013			(17	)%		33,241			53,104			(37	)%

Corporate expenses		3,351			3,772			(11	)%		10,602			12,703			(17	)%
Impairment charge		-			440,020			*			2,720			440,020			(99	)%
Operating income		11,559			(425,779	)		*			19,919			(399,619	)		*

Interest expense		(8,227	)		(8,172	)		1	%		(21,762	)		(27,595	)		(21	)%
Interest income		70			622			(89	)%		388			1,339			(71	)%
Loss on debt extinguishment		-			-			*			(4,716	)		-			*
Income (loss) before income taxes from continuing operations	$	3,402		$	(433,329	)		*		$	(6,171	)	$	(425,875	)		(99	)%


Capital expenditures
Television	$	2,151		$	4,198					$	4,667		$	10,709
Radio		252			824						628			2,786
Consolidated	$	2,403		$	5,022					$	5,295		$	13,495


										September 30,			December 31,
Total assets											2009			2008
Television										$	344,959		$	394,287
Radio											192,025			196,752
Consolidated										$	536,984		$	591,039

*	Percentage not meaningful.

4. LITIGATION

The Company is subject to various outstanding claims and other legal proceedings that arose in the ordinary course of business. In the opinion of management, any liability of the Company that may arise out of or with respect to these matters will not materially adversely affect the financial position, results of operations or cash flows of the Company.

5. SUBSEQUENT EVENTS

In accordance with ASC 855, “Subsequent Events”, the Company evaluated all events or transactions that occurred after September 30, 2009 through November 6, 2009, the date the Company issued its consolidated financial statements, and determined that none met the definition of a subsequent event for purposes of recognition or disclosure in the consolidated financial statements for the period ended September 30, 2009.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a diversified Spanish-language media company with a unique portfolio of television and radio assets that reach Hispanic consumers across the United States, as well as the border markets of Mexico. We operate in two reportable segments: television broadcasting and radio broadcasting. Our net revenue for the three-month period ended September 30, 2009, was $50.8 million. Of that amount, revenue generated by our television segment accounted for 63% and revenue generated by our radio segment accounted for 37%.

As of the date of filing this report, we own and/or operate 53 primary television stations located primarily in California, Colorado, Connecticut, Florida, Massachusetts, Nevada, New Mexico, Texas and Washington, D.C. We own and operate 48 radio stations (37 FM and 11 AM) located primarily in Arizona, California, Colorado, Florida, Nevada, New Mexico and Texas.

We generate revenue from sales of national and local advertising time on television and radio stations. Advertising rates are, in large part, based on each medium’s ability to attract audiences in demographic groups targeted by advertisers. We recognize advertising revenue when commercials are broadcast. We do not obtain long-term commitments from our advertisers and, consequently, they may cancel, reduce or postpone orders without penalties. We pay commissions to agencies for local, regional and national advertising. For contracts directly with agencies, we record net revenue from these agencies. Seasonal revenue fluctuations are common in the broadcasting industry and are due primarily to variations in advertising expenditures by both local and national advertisers.

Our primary expenses are employee compensation, including commissions paid to our sales staff and amounts paid to our national representative firms, as well as expenses for marketing, promotion and selling, technical, local programming, engineering, and general and administrative. Our local programming costs for television consist primarily of costs related to producing a local newscast in most of our markets.

The comparability of our results between 2009 and 2008 is affected by acquisitions and dispositions in those periods. In those years, we primarily acquired new media properties in markets where we already owned existing media properties. While new media properties contribute to the financial results of their markets, we do not attempt to measure their effect as they typically are integrated into existing operations.

Highlights

During the third quarter of 2009, we continued to face a significant advertising downturn, both in television and radio, primarily as a result of the ongoing global financial crisis and the recession. Nevertheless, our audience shares remained strong in the nation’s most densely populated Hispanic markets.

Net revenue for our television segment decreased to $32.0 million in the third quarter of 2009, from $37.5 million in the third quarter of 2008. This decrease of $5.5 million, or 15%, in net revenue was primarily due to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy. On the other hand, we generated $2.4 million of revenue from retransmission consent agreements, or retransmission consent revenue, that have been entered into for the carriage of our television station signals by cable, satellite and internet-based television service providers. See “Consolidated Operations – Net Revenue” below.

Net revenue for our radio segment decreased to $18.7 million in the third quarter of 2009, from $23.5 million in the third quarter of 2008. This decrease of $4.8 million, or 20%, in net revenue was primarily due to a decrease in local and national advertising sales and advertising rates, which in turn was primarily due to the continuing weak economy. Nevertheless, we continued to concentrate our efforts on local sales, which accounted for 75% of total radio segment sales in the third quarter of 2009.

We continue to experience solid ratings growth in our radio markets where we broadcast “José: Nunca Sabes Lo Que Va A Tocar” (“You never know what he’ll play”), which features a mix of Spanish-language adult contemporary and Mexican regional hits from the 1970s through the present, as well as our stations that are broadcasting the “Piolin por la Mañana,” syndicated morning show, one of the highest-rated Spanish-language radio programs in the country. In January 2009, we converted one of our Los Angeles radio stations from English-language to Spanish-language and introduced a new format, “El Gato,” an upbeat and energetic regional Mexican format, and our ratings for this station have since increased by 133% year over year for adults 18-34 years of age.

In response to our previously announced cost-savings measures undertaken in the fourth quarter of 2008 and the first quarter of 2009, we are benefiting from reductions in our expenses. We anticipate that these savings will continue at least for the remainder of 2009. We intend to continue to evaluate the extent and effectiveness of our cost-saving measures based on changing future economic conditions and our achieving or not achieving budgeted revenues, and will consider taking additional measures if and as circumstances warrant.

Acquisition of Assets

In April 2009, we acquired the assets of television station KREN-TV in the Reno, Nevada market for approximately $4.3 million. We reduced the carrying value of the assets of television station KREN-TV to its fair value of $1.6 million by recording a carrying value adjustment of $2.7 million. This charge is included in our consolidated statements of operations for continuing operations.

In accordance with ASC 805, “Business Combinations”, we evaluated the transferred set of activities, assets, inputs, outputs and processes in this acquisition and determined that the acquisition did not constitute a business.

Relationship with Univision

Based on our review of public filings made by Univision, we believe that Univision currently owns approximately 10% of our common stock on a fully-converted basis. In connection with its merger with Hispanic Broadcasting Corporation in September 2003, Univision entered into an agreement with the U.S. Department of Justice, or DOJ, pursuant to which Univision agreed, among other things, to ensure that its percentage ownership of our company would not exceed 15% by March 26, 2006 and would not exceed 10% by March 26, 2009.

In February 2008, we repurchased 1.5 million shares of Class U common stock held by Univision for $10.4 million. In May 2009, we repurchased an additional 0.9 million shares of Class A common stock held by Univision for $0.5 million.

Univision is the holder of all of our issued and outstanding Class U common stock. The Class U common stock has limited voting rights and does not include the right to elect directors. However, as the holder of all of our issued and outstanding Class U common stock, Univision currently has the right to approve any merger, consolidation or other business combination involving our company, any dissolution of our company and any assignment of the Federal Communications Commission, or FCC, licenses for any of our company’s Univision-affiliated television stations. Each share of Class U common stock is automatically convertible into one share of our Class A common stock (subject to adjustment for stock splits, dividends or combinations) in connection with any transfer to a third party that is not an affiliate of Univision.

Univision acts as our exclusive sales representative for the sale of all national advertising aired on Univision-affiliate television stations. During the three-month periods ended September 30, 2009 and 2008, the amount we paid to Univision in this capacity was $1.7 million and $2.5 million, respectively. During the nine-month periods ended September 30, 2009 and 2008, the amount we paid to Univision in this capacity was $4.8 million and $7.1 million, respectively.

In August 2008, we entered into an agreement with Univision pursuant to which Univision has negotiated the terms of retransmission consent agreements providing for the carriage of our Univision- and TeleFutura-affiliated television station signals by cable, satellite and internet-based television service providers. The agreement also provides terms relating to retransmission consent revenue with respect to agreements that have been entered into for the carriage of our Univision- and TeleFutura-affiliated television station signals. As of September 30, 2009, the amount due to us from Univision was $4.8 million related to our agreements for the carriage of our Univision and TeleFutura-affiliated television station signals.

Recent Accounting Pronouncements

In August 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05, “Measuring Liabilities at Fair Value” (“ASU 2009-05”). ASU 2009-05 clarifies ASC 820, “Fair Value Measurements and Disclosures”. ASU 2009-05 provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following methods: 1) a valuation technique that uses a) the quoted price of the identical liability when traded as an asset or b) quoted prices for similar liabilities or similar liabilities when traded as assets and/or 2) a valuation technique that is consistent with the principles of ASC 820. ASU 2009-05 also clarifies that when estimating the fair value of a liability, a reporting entity is not required to adjust to include inputs relating to the existence of transfer restrictions on that liability. This standard is effective beginning in the fourth quarter 2009. We are currently evaluating the impact of this standard on our consolidated financial statements.

In October 2009, the FASB issued ASU No. 2009-13, “Multiple-Deliverable Revenue Arrangements” (“ASU 2009-13”). ASU 2009-13 addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting and how arrangement consideration shall be measured and allocated to the separate units of accounting in the arrangement. ASU 2009-13 is effective for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. We are currently evaluating the impact of this standard on our consolidated financial statements.

In June 2009, the FASB issued an amendment to ASC 860, “Transfers and Servicing”. The amendment eliminates the concept of a qualifying special-purpose entity (“QSPE”), therefore requiring these entities to be evaluated under the accounting guidance for consolidation of variable interest entities (“VIE”). Other changes include additional considerations when determining if sale accounting is appropriate, as well as enhanced disclosures requirements. This standard is effective January 1, 2010. We are currently evaluating the impact of this standard on our consolidated financial statements.

In June 2009, the FASB issued an amendment to ASC 810, “Consolidation”. The amendment eliminates the scope exception for QSPEs and requires an entity to reconsider its previous consolidation conclusions reached under the VIE consolidation model, including (i) whether an entity is a VIE, (ii) whether the enterprise is the VIE’s primary beneficiary, and (iii) the required financial statement disclosures. The new standard can be applied as of the effective date, with a cumulative-effect adjustment to retained earnings recognized on that date, or retrospectively, with a cumulative-effect adjustment to retained earnings recognized as of the beginning of the first year adjusted. This standard is effective January 1, 2010. We are currently evaluating the impact of this standard on our consolidated financial statements.

Three- and Nine-Month Periods Ended September 30, 2009 and 2008

The following table sets forth selected data from our operating results for the three- and nine-month periods ended September 30, 2009 and 2008 (in thousands):

	Three-Month Period									Nine-Month Period
	Ended September 30,						%			Ended September 30,						%
	2009			2008			Change			2009			2008			Change
Statements of Operations Data:
Net revenue	$	50,754		$	60,988			(17	)%	$	141,165		$	179,573			(21	)%
Direct operating expenses		21,030			25,583			(18	)%		63,690			76,258			(16	)%
Selling, general and administrative expenses		9,542			11,394			(16	)%		28,341			33,026			(14	)%
Corporate expenses		3,351			3,772			(11	)%		10,602			12,703			(17	)%
Depreciation and amortization		5,272			5,998			(12	)%		15,893			17,185			(8	)%
Impairment charge		-			440,020			*			2,720			440,020			(99	)%
		39,195			486,767			(92	)%		121,246			579,192			(79	)%
Operating income (loss)		11,559			(425,779	)		*			19,919			(399,619	)		*
Interest expense		(8,227	)		(8,172	)		1	%		(21,762	)		(27,595	)		(21	)%
Interest income		70			622			(89	)%		388			1,339			(71	)%
Loss on debt extinguishment		-			-			*			(4,716	)		-			*
Income (loss) before income
taxes		3,402			(433,329	)		*			(6,171	)		(425,875	)		(99	)%
Income tax (expense) benefit		(2,802	)		78,847			*			(9,311	)		76,167			*
Income (loss) before equity in net
loss of nonconsolidated affiliate
and discontinued operations		600			(354,482	)		*			(15,482	)		(349,708	)		(96	)%
Equity in net income (loss) of
nonconsolidate affiliate, net of tax		73			(9	)		*			(166	)		(173	)		(4	)%
Income (loss) from continuing operations		673			(354,491	)		*			(15,648	)		(349,881	)		(96	)%
Loss from discontinued operations		-			-			*			-			(1,573	)		*
Net income (loss) applicable
to common stockholders	$	673		$	(354,491	)		*		$	(15,648	)	$	(351,454	)		(96	)%

Other Data:
Capital expenditures		2,403			5,022						5,295			13,495
Consolidated adjusted EBITDA
(adjusted for non-cash
stock-based compensation) (1)											40,307			60,156
Net cash provided by operating activities											10,197			33,019
Net cash provided by (used in) investing activities											(9,093	)		64,804
Net cash used in financing activities											(44,574	)		(67,194	)

*	Percentage not meaningful.

(1)

Consolidated adjusted EBITDA means net income (loss) plus loss (gain) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate and syndication programming amortization less syndication programming payments. We use the term consolidated adjusted EBITDA because that measure is defined in our syndicated bank credit facility and does not include loss (gain) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate and syndication programming amortization and does include syndication programming payments.

Since our ability to borrow from our syndicated bank credit facility is based on a consolidated adjusted EBITDA financial covenant, we believe that it is important to disclose consolidated adjusted EBITDA to our investors. Our syndicated bank credit facility contains certain financial covenants relating to the maximum allowed leverage ratio, maximum capital expenditures and minimum fixed charge coverage ratio. The maximum allowed leverage ratio, or the ratio of consolidated total debt to trailing-twelve-month consolidated adjusted EBITDA, affects our ability to borrow from our syndicated bank credit facility. The maximum allowed leverage ratio also affects the interest rate charged for revolving loans, thus affecting our interest expense. Under our syndicated bank credit facility, our maximum allowed leverage ratio may not exceed 6.75 to 1. The actual leverage ratio was as follows (in each case as of September 30): 2009, 6.7 to 1; 2008, 5.7 to 1. Therefore, we were in compliance with this covenant at each of those dates. We entered into an amendment to our credit facility agreement in March 2009, so we were not subject to the same calculations and covenants in prior years. However, for consistency of presentation, the foregoing historical ratios assume that our current definition had been applicable for all periods presented.

While many in the financial community and we consider consolidated adjusted EBITDA to be important, it should be considered in addition to, but not as a substitute for or superior to, other measures of liquidity and financial performance prepared in accordance with accounting principles generally accepted in the United States of America, such as cash flows from operating activities, operating income and net income. As consolidated adjusted EBITDA excludes non-cash (gain) loss on sale of assets, non-cash depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation expense, net interest expense, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate and syndication programming amortization and includes syndication programming payments, consolidated adjusted EBITDA has certain limitations because it excludes and includes several important non-cash financial line items. Therefore, we consider both non-GAAP and GAAP measures when evaluating our business. Consolidated adjusted EBITDA is also used to make executive compensation decisions.

Consolidated adjusted EBITDA is a non-GAAP measure. The most directly comparable GAAP financial measure to consolidated adjusted EBITDA is cash flows from operating activities. A reconciliation of this non-GAAP measure to cash flows from operating activities follows (in thousands):

	Nine-Month Period
	Ended September 30,
	2009			2008

Consolidated adjusted EBITDA (1)	$	40,307		$	60,156

Interest expense		(21,762	)		(27,595	)
Interest income		388			1,339
Loss on debt extinguishment		(4,716	)		-
Income tax (expense) benefit		(9,311	)		76,167
Amortization of syndication contracts		(1,689	)		(2,255	)
Payments on syndication contracts		2,119			2,135
Non-cash stock-based compensation included in direct operating
expenses		(489	)		(462	)
Non-cash stock-based compensation included in selling, general
and administrative expenses		(618	)		(579	)
Non-cash stock-based compensation included in corporate expenses		(1,098	)		(1,409	)
Depreciation and amortization		(15,893	)		(17,185	)
Impairment charge		(2,720	)		(440,020	)
Equity in net loss of nonconsolidated affiliates		(166	)		(173	)
Loss from discontinued operations		-			(1,573	)
Net loss		(15,648	)		(351,454	)


Depreciation and amortization		15,893			17,185
Impairment charge		2,720			440,020
Deferred income taxes		8,534			(77,537	)
Amortization of debt issue costs		298			302
Amortization of syndication contracts		1,689			2,255
Payments on syndication contracts		(2,119	)		(2,135	)
Equity in net loss of nonconsolidated affiliate		166			173
Non-cash stock-based compensation		2,205			2,450
Gain on sale of media properties and other assets		(102	)		-
Non-cash expenses related to debt extinguishment		945			-
Change in fair value of interest rate swap agreements		(3,850	)		3,647
Changes in assets and liabilities, net of effect of acquisitions and dispositions:
(Increase) decrease in accounts receivable		(3,100	)		3,648
Increase in prepaid expenses and other assets		(621	)		(100	)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		3,187			(3,205	)
Effect of discontinued operations		-			(2,230	)
Cash flows from operating activities	$	10,197		$	33,019

Consolidated Operations

Net Revenue. Net revenue decreased to $50.8 million for the three-month period ended September 30, 2009 from $61.0 million for the three-month period ended September 30, 2008, a decrease of $10.2 million. Of the overall decrease, $5.4 million came from our television segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy, partially offset by an increase in retransmission consent revenue. Additionally, $4.8 million of the overall decrease came from our radio segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy.

Net revenue decreased to $141.2 million for the nine-month period ended September 30, 2009 from $179.6 million for the nine-month period ended September 30, 2008, a decrease of $38.4 million. Of the overall decrease, $20.5 million came from our television segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy, partially offset by an increase in retransmission consent revenue. Additionally, $17.9 million of the overall decrease came from our radio segment and was primarily attributable to a decrease in local and national advertising sales and advertising rates, which in turn was primarily due to the continuing weak economy.

We currently anticipate that net revenue will decrease for the remainder of and full year 2009, due to (i) a continuing challenging advertising environment, primarily the result of the ongoing global financial crisis and the recession; and (ii) the absence of significant political revenue in 2009. We believe that we will see continued decreases in most advertising groups, especially automotive (our single largest source of advertising revenue) and political advertising. We do not know when the general advertising environment will change. However, we anticipate that the general advertising environment will not improve until at least the economy improves.

Direct Operating Expenses. Direct operating expenses decreased to $21.0 million for the three-month period ended September 30, 2009 from $25.6 million for the three-month period ended September 30, 2008, a decrease of $4.6 million. Of the overall decrease, $3.4 million came from our television segment and was primarily attributable to a decrease in national representation fees and other expenses associated with the decrease in net revenue and a decrease in salary expense due to reductions of personnel and salary reductions. Additionally, $1.2 million of the overall decrease came from our radio segment and was primarily attributable to a decrease in expenses associated with the decrease in net revenue and a decrease in salary expense due to reductions of personnel and salary reductions. As a percentage of net revenue, direct operating expenses decreased to 41% for the three-month period ended September 30, 2009 from 42% for the three-month period ended September 30, 2008. Direct operating expenses as a percentage of net revenue decreased because the decrease in direct operating expenses outpaced the decrease in net revenue.

Direct operating expenses decreased to $63.7 million for the nine-month period ended September 30, 2009 from $76.3 million for the nine-month period ended September 30, 2008, a decrease of $12.6 million. Of the overall decrease, $8.3 million came from our television segment and was primarily attributable to a decrease in national representation fees and other expenses associated with the decrease in net revenue and a decrease in salary expense due to reductions of personnel and salary reductions. Additionally, $4.3 million of the overall decrease came from our radio segment and was primarily attributable to a decrease in expenses associated with the decrease in net revenue and a decrease in salary expense due to reductions of personnel and salary reductions. As a percentage of net revenue, direct operating expenses increased to 45% for the nine-month period ended September 30, 2009 from 42% for the nine-month period ended September 30, 2008. Direct operating expenses as a percentage of net revenue increased because the decrease in net revenue outpaced the decrease in direct operating expenses.

We believe that direct operating expenses will continue to decrease during at least the remainder of 2009 as a result of the cost-savings measures that we implemented during the fourth quarter of 2008 and the first quarter of 2009. However, we also believe that direct operating expenses as a percentage of net revenue will increase for the full 2009 year because decreases in revenue will continue to outpace decreases in direct operating expenses.

Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased to $9.5 million for the three-month period ended September 30, 2009 from $11.4 million for the three-month period ended September 30, 2008, a decrease of $1.9 million. Of the overall decrease, $1.0 million came from our radio segment and was primarily attributable to decreases in salary expense due to reductions of personnel and salary reductions and promotional spending. Additionally, $0.9 million of the overall decrease came from our television segment and was primarily attributable to a decrease in salary expense due to reductions of personnel and salary reductions and employee benefits. As a percentage of net revenue, selling, general and administrative expenses remained the same at 19% for each of the three-month periods ended September 30, 2009 and 2008.

Selling, general and administrative expenses decreased to $28.3 million for the nine-month period ended September 30, 2009 from $33.0 million for the nine-month period ended September 30, 2008, a decrease of $4.7 million. Of the overall decrease, $3.0 million came from our radio segment and was primarily attributable to decreases in salary expense due to reductions of personnel and salary reductions and promotional spending. Additionally, $1.7 million of the overall decrease came from our television segment and was primarily attributable to a decrease in salary expense due to reductions of personnel and salary reductions and employee benefits. As a percentage of net revenue, selling, general and administrative expenses increased to 20% for the nine-month period ended September 30, 2009 from 18% for the nine-month period ended September 30, 2008. Selling, general and administrative expenses as a percentage of net revenue increased because the decrease in net revenue outpaced the decrease in selling, general and administrative expenses.

We believe that selling, general and administrative expenses will continue to decrease during at least the remainder of 2009 as a result of the cost-savings measures that we implemented during the fourth quarter of 2008 and the first quarter of 2009. However, we also believe that selling, general and administrative expenses as a percentage of net revenue will increase for the full 2009 year because decreases in revenue will continue to outpace decreases in selling, general and administrative expenses.

Corporate Expenses. Corporate expenses decreased to $3.4 million for the three-month period ended September 30, 2009 from $3.8 million for the three-month period ended September 30, 2008, a decrease of $0.4 million. The decrease was primarily attributable to the decrease in salary expense due to salary reductions and a decrease in employee benefits. As a percentage of net revenue, corporate expenses increased to 7% for the three-month period ended September 30, 2009 from 6% for the three-month period ended September 30, 2008. Corporate expenses as a percentage of net revenue increased because the decrease in net revenue outpaced the decrease in corporate expenses.

Corporate expenses decreased to $10.6 million for the nine-month period ended September 30, 2009 from $12.7 million for the nine-month period ended September 30, 2008, a decrease of $2.1 million. The decrease was primarily attributable to the elimination of bonuses paid to executive officers, a decrease in salary expense due to salary reductions and a decrease in employee benefits. As a percentage of net revenue, corporate expenses increased to 8% for the nine-month period ended September 30, 2009 from 7% for the nine-month period ended September 30, 2008. Corporate expenses as a percentage of net revenue increased because the decrease in net revenue outpaced the decrease in corporate expenses.

We believe that corporate expenses will continue to decrease during at least the remainder of 2009 as a result of the cost-savings measures that we implemented during the fourth quarter of 2008 and the first quarter of 2009. However, we also believe that corporate expenses as a percentage of net revenue will continue to increase during the remainder of and full year 2009 because decreases in revenue will continue to outpace decreases in corporate expenses.

Depreciation and Amortization. Depreciation and amortization decreased to $5.3 million for the three-month period ended September 30, 2009 from $6.0 million for the three-month period ended September 30, 2008, a decrease of $0.7 million. Depreciation and amortization decreased to $15.9 million for the nine-month period ended September 30, 2009 from $17.2 million for the nine-month period ended September 30, 2008, a decrease of $1.3 million.

Impairment Charge. Continuing operations includes a carrying value adjustment of $2.7 million from our television segment for the nine-month period ended September 30, 2009. The impairment charge of $440 million for the three- and nine-month periods ended September 30, 2008 was a result of a $54 million impairment of goodwill in our radio segment, a $332 million impairment of our radio FCC licenses and a $54 million impairment of our television FCC licenses.

Operating Income (loss). As a result of the above factors, operating income was $11.6 million for the three-month period ended September 30, 2009, compared to an operating loss of $425.8 million for the three-month period ended September 30, 2008. As a result of the above factors, operating income was $19.9 million for the nine-month period ended September 30, 2009, compared to an operating loss of $399.6 million for the nine-month period ended September 30, 2008.

Interest Expense. Interest expense remained the same at $8.2 million for each of the three-month periods ended September 30, 2009 and 2008.

Interest expense decreased to $21.8 million for the nine-month period ended September 30, 2009 from $27.6 million for the nine-month period ended September 30, 2008, a decrease of $5.8 million. The decrease was primarily attributable to the change in the fair value of our interest rate swap agreements.

Loss on Debt Extinguishment. We recorded a loss on debt extinguishment of $4.7 million for fees, unamortized finance costs and interest rate swap agreement termination costs associated with the amendment to the syndicated bank credit facility for the nine-month period ended September 30, 2009.

Income Tax Expense. Income tax expense for the nine-month period ended September 30, 2009 was $9.3 million. The effective income tax rate was higher than our expected annual tax rate of approximately 38% for the nine-month period ended September 30, 2009 due to state income and capital taxes, other permanent differences, changes in the valuation allowance and deductions attributable to indefinite-lived intangibles.

As of September 30, 2009, we believe that our deferred tax assets will not be fully realized in the future and have provided a valuation allowance against those deferred tax assets. In determining our deferred tax assets subject to a valuation allowance, we excluded certain of the deferred tax liabilities attributable to indefinite-lived intangibles.

Loss from Discontinued Operations. We sold our outdoor advertising operations during the second quarter of 2008. In accordance with ASC 360-10-45, “Impairment or Disposal of Long-Lived Assets”, we reported the results of our outdoor advertising operations in discontinued operations within the consolidated statements of operations. The loss from discontinued operations was $1.6 million for the nine-month period ended September 30, 2008.

Segment Operations

Television

Net Revenue. Net revenue in our television segment decreased to $32.0 million for the three-month period ended September 30, 2009 from $37.5 million for the three-month period ended September 30, 2008, a decrease of $5.5 million. The decrease was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy. We also generated $2.4 million in retransmission consent revenue.

Net revenue in our television segment decreased to $92.0 million for the nine-month period ended September 30, 2009 from $112.5 million for the nine-month period ended September 30, 2008, a decrease of $20.5 million. The decrease was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy. We also generated $7.2 million in retransmission consent revenue. We anticipate that we will continue to generate retransmission consent revenue in future periods.

Direct Operating Expenses. Direct operating expenses in our television segment decreased to $13.0 million for the three-month period ended September 30, 2009 from $16.4 million for the three-month period ended September 30, 2008, a decrease of $3.4 million. The decrease was primarily attributable to a decrease in national representation fees and other expenses associated with the decrease in net revenue and a decrease in salary expense due to reductions in personnel and salary reductions.

Direct operating expenses in our television segment decreased to $40.2 million for the nine-month period ended September 30, 2009 from $48.5 million for the nine-month period ended September 30, 2008, a decrease of $8.3 million. The decrease was primarily attributable to a decrease in national representation fees and other expenses associated with the decrease in net revenue and a decrease in salary expense due to reductions in personnel and salary reductions.

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our television segment decreased to $4.6 million for the three-month period ended September 30, 2009 from $5.5 million for the three-month period ended September 30, 2008, a decrease of $0.9 million. The decrease was primarily attributable to a decrease in salary expense due to reductions in personnel and salary reductions and employee benefits.

Selling, general and administrative expenses in our television segment decreased to $14.9 million for the nine-month period ended September 30, 2009 from $16.6 million for the nine-month period ended September 30, 2008, a decrease of $1.7 million. The decrease was primarily attributable to a decrease in salary expense due to reductions in personnel and salary reductions and employee benefits.

Radio

Net Revenue. Net revenue in our radio segment decreased to $18.7 million for the three-month period ended September 30, 2009 from $23.5 million for the three-month period ended September 30, 2008, a decrease of $4.8 million. The decrease was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy.

Net revenue in our radio segment decreased to $49.1 million for the nine-month period ended September 30, 2009 from $67.0 million for the nine-month period ended September 30, 2008, a decrease of $17.9 million. The decrease was primarily attributable to a decrease in local and national advertising sales and advertising rates, which in turn was primarily due to the continuing weak economy.

There has been a general slowing of growth in the radio industry over the last few years, which has had a negative impact on net revenue in our radio segment. We believe that this trend will continue for the foreseeable future. Additionally, radio advertising revenue is expected to continue to be negatively impacted because of decreases in television advertising rates, which make television advertising more affordable, combined with a general perception in the marketplace that there is an enhanced branding power to advertising on television relative to radio.

Direct Operating Expenses. Direct operating expenses in our radio segment decreased to $8.0 million for the three-month period ended September 30, 2009 from $9.2 million for the three-month period ended September 30, 2008, a decrease of $1.2 million. The decrease was primarily attributable to a decrease in expenses associated with the decrease in net revenue and a decrease in salary expense due to reductions in personnel and salary reductions.

Direct operating expenses in our radio segment decreased to $23.5 million for the nine-month period ended September 30, 2009 from $27.7 million for the nine-month period ended September 30, 2008, a decrease of $4.2 million. The decrease was primarily attributable to a decrease in expenses associated with the decrease in net revenue and a decrease in salary expense due to reductions in personnel and salary reductions.

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our radio segment decreased to $5.0 million for the three-month period ended September 30, 2009 from $5.9 million for the three-month period ended September 30, 2008, a decrease of $0.9 million. The decrease was primarily attributable to decreases in salary expense due to reductions in personnel and salary reductions and promotional spending.

Selling, general and administrative expenses in our radio segment decreased to $13.5 million for the nine-month period ended September 30, 2009 from $16.4 million for the nine-month period ended September 30, 2008, a decrease of $2.9 million. The decrease was primarily attributable to decreases in salary expense due to reductions in personnel and salary reductions and promotional spending.

Liquidity and Capital Resources

As a result of the ongoing global financial crisis and the recession, and their impact on the advertising marketplace and our customers, we have experienced declining net revenues, which have had a significant negative impact on our cash flows and consolidated adjusted EBITDA as defined as net income (loss) plus loss (gain) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate and syndication programming amortization less syndication programming payments. For a reconciliation of consolidated adjusted EBITDA to cash flow from operating activities, its most directly comparable GAAP financial measure, please see page 21. At September 30, 2009, our total consolidated debt outstanding was $363.9 million.

We have taken a number of steps to address our liquidity as result of the decline in our consolidated adjusted EBITDA. As a result of management’s budgeting process for 2009, taking into consideration the impact that the further rapid deterioration of the economy could have on our results of operation, we amended our syndicated bank credit facility agreement on March 16, 2009. Among other things, the amendment requires compliance with a maximum allowed leverage ratio covenant, calculated as the ratio of consolidated total debt outstanding to trailing-twelve-month consolidated adjusted EBITDA. In addition, the amendment imposes certain additional restrictions on our liquidity and operations, including a significantly higher interest rate on outstanding principal and a sweep of 75% of quarterly excess cash flow, as defined in the amendment, to repay principal on our outstanding consolidated debt. At the time we entered into the amendment to our syndicated bank credit facility agreement in the first quarter of 2009, we made a prepayment of $40 million to reduce the outstanding amount of our term loans. See “Syndicated Bank Credit Facility” below.

In order to maintain compliance with the maximum allowed leverage ratio covenant, we will need to achieve certain quarterly, trailing-twelve-month consolidated adjusted EBITDA targets. At September 30, 2009, our cash balance was $20.8 million, our debt outstanding under our syndicated bank credit facility was $361.9 million and we had other debt of $2.0 million.

Under the amended syndicated bank credit facility agreement, our debt to trailing-twelve-month consolidated adjusted EBITDA ratio is required to be below 6.75 at the end of the fourth quarter of 2009, below 6.50 at the end of the first two quarters of 2010 and below 6.25 at the end of the third quarter of 2010. Since consolidated adjusted EBITDA is based on a trailing-twelve-month period, the consolidated adjusted EBITDA levels needed to achieve compliance each quarter may be reduced or increased based on the results of the preceding three quarters. Based on the foregoing considerations and our actual results in the preceding three quarters, we believe that consolidated adjusted EBITDA for the three-month period ending December 31, 2009 would have to decrease in excess of approximately 20% from consolidated adjusted EBITDA for the three-month period ended December 31, 2008 in order for us to breach the maximum allowed leverage ratio covenant. We believe that consolidated adjusted EBITDA for the three-month period ending December 31, 2009 will not be such as to result in a breach of the maximum allowed leverage ratio covenant calculated as of such date; however, events outside our control could give rise to further declining consolidated adjusted EBITDA and there can be no assurance that we will achieve any specific consolidated adjusted EBITDA levels.

We have also implemented significant cost-saving measures, including reductions in personnel, executive bonuses, employee benefits, general corporate expense and capital expenditures in the fourth quarter of 2008, and reductions in salary expense, promotional expense, bonuses, general corporate expense and capital expenditures in the first quarter of 2009. We currently estimate that these cost-saving measures have resulted in an expense reduction of approximately $14 million for the nine-month period ended September 30, 2009. We currently anticipate that these cost-saving measures will result in expense reductions of approximately $6 million during the fourth quarter of 2009. Through our ongoing efforts to improve our profitability and cash flows, we are continuing to review our business for areas of possible additional improvement, greater efficiency and further cost reductions.

We believe that, as a result of these cost-saving measures and the amendment of our syndicated bank credit facility agreement discussed above, we will be able to achieve the trailing-twelve-month consolidated adjusted EBITDA targets under our amended syndicated bank credit facility agreement, and, therefore, we believe that we will be able to maintain compliance with the maximum allowed leverage ratio covenant under our amended syndicated bank credit facility agreement for at least the next twelve months. However, there is no assurance that these actions will be successful or that further adverse events outside of our control may arise that would result in our inability to comply with the maximum allowed leverage ratio covenant under our amended syndicated bank credit facility agreement. In such event, we would consider a range of transactions or strategies to address any such situation. For example, we might decide to use remaining cash resources to prepay a portion of our outstanding debt, which may result in limitations on available working capital. Alternatively, in such event, to meet the our cash requirements and avoid failing to comply with the maximum allowed leverage ratio covenant, we might seek to obtain a further waiver or amendment to our amended syndicated bank credit facility agreement, refinance our existing debt, divest non-core assets or operations and/or obtain additional equity or debt financing. There is no assurance that any such transactions, or any other transactions or strategies we might consider, could be consummated on terms satisfactory to us or at all.

In the event that we believed that we were going to fail to comply with the maximum leverage ratio covenant or any other financial ratios under our amended syndicated bank credit facility agreement, among other actions we might take, we would likely seek to obtain a waiver or further amendment from our lenders. If we were unable to obtain such a waiver or amendment, or be in a position to take one of the other actions described or contemplated in the previous paragraph, we could violate a financial covenant or ratio, which in turn could result in an event of default under our amended syndicated bank credit facility agreement. If an event of default were to occur and continue, lenders holding more than 50% of the loans and commitments outstanding under the syndicated bank credit facility could elect to accelerate the maturity of those loans outstanding under the syndicated bank credit facility. Among the consequences of such actions, we might be precluded from accessing any available borrowings under our revolving credit facility, and we might be required to repay all amounts then outstanding under the syndicated bank credit facility.

While we have a history of operating losses in some periods and operating income in other periods, we also have a history of generating significant positive cash flows from our operations. We reported a net loss of $15.6 million and had positive cash flow from operations of $10.2 million for the nine-month period ended September 30, 2009. Additionally, as of September 30, 2009, we had an accumulated deficit of $837.7 million. We expect to fund working capital requirements, capital expenditures and payments of principal and interest on outstanding indebtedness, with cash on hand, and cash flows from operations. We currently anticipate that funds generated from operations, including cost-saving measures we have taken, and available borrowings under our syndicated bank credit facility will be sufficient to meet our anticipated cash requirements for at least the next twelve months.

Syndicated Bank Credit Facility

In September 2005, we entered into a syndicated bank credit facility with a $650 million senior secured syndicated bank credit facility, consisting of a 7 ½ year $500 million term loan and a 6 ½ year $150 million revolving facility. The term loan under the syndicated bank credit facility has been drawn in full, the proceeds of which were used (i) to refinance $250 million outstanding under our former syndicated bank credit facility, (ii) to complete a tender offer for our previously outstanding $225 million senior subordinated notes, and (iii) for general corporate purposes. The term loan matures in 2013 and the revolving facility expires in 2012. Our ability to make additional borrowings under the syndicated bank credit facility is subject to compliance with certain financial covenants, including financial ratios, and other conditions set forth in the syndicated bank credit facility.

On March 16, 2009, we entered into an amendment to our syndicated bank credit facility agreement. Pursuant to this amendment, among other things:

•

The interest that we pay under the credit facility increased. Both the revolver and term loan borrowings under the amendment bear interest at a variable interest rate based on either LIBOR or a base rate, in either case plus an applicable margin that varies depending upon our leverage ratio. Borrowings under both our revolver and term loan bear interest at LIBOR plus a margin of 5.25% when the leverage ratio is greater than or equal to 5.0. When the leverage ratio is less than 5.0 but greater than or equal to 4.0, borrowings under both our revolver and term loan will bear interest at LIBOR plus a margin of 4.25%. When the leverage ratio is less than 4.0, borrowings under both our revolver and term loan will bear interest at LIBOR plus a margin of 3.25%. The term loan currently bears interest at LIBOR plus a margin of 5.25%, for a total interest rate of 5.54% at September 30, 2009. As of September 30, 2009, $361.9 million of the term loan was outstanding.

•

The total amount of our revolver facility was reduced from $150 million to $50 million. Borrowings under the revolver are restricted to $5 million in the aggregate during any rolling 30-day period when the leverage ratio is less than 1.0 of the maximum allowable ratio during the applicable period. New conditions have been added for loans under the revolver facility greater than $5 million. The revolving facility bears interest at LIBOR plus a margin ranging from 3.25% to 5.25% based on leverage covenants. As of September 30, 2009, we had approximately $1.0 million in outstanding letters of credit and $49 million was available under the revolving facility for future borrowings. In addition, we pay a quarterly unused commitment fee ranging from 0.25% to 0.50% per annum, depending on the level of facility used.

•

There are more stringent financial covenants relating to maximum allowed leverage ratio, maximum capital expenditures and fixed charge coverage ratio. Beginning March 16, 2009, through December 31, 2009, the maximum allowed leverage ratio, or the ratio of consolidated total debt to trailing-twelve-month consolidated adjusted EBITDA, is 6.75. The maximum allowed leverage ratio decreases to 6.50 in the first quarter of 2010. On September 30, 2010 the maximum allowed leverage ratio decreases to 6.25 and on December 31, 2010 the maximum allowed leverage ratio decreases to 6.0. Beginning March 31, 2011, and through the term of the agreement, the maximum allowed leverage ratio is 5.50. The actual leverage ratio was 6.7 to 1 as of September 30, 2009. Therefore, we were in compliance with this covenant as of this date. From March 31, 2009, through the term of the agreement, the minimum required fixed charge coverage ratio is 1.15.

•

There is a mandatory prepayment clause for 100% of the proceeds of certain asset dispositions, regardless of our leverage ratio. In addition, if we have excess cash flow, as defined in our syndicated bank credit facility, 75% of such excess cash flow must be used to reduce our outstanding loan balance on a quarterly basis.

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Beginning March 31, 2009, the senior leverage ratio and net leverage ratio were eliminated.

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Capital expenditures may not exceed $10 million in each of 2009 and 2010.

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We are restricted from making acquisitions and investments when the leverage ratio is greater than 4.0, with an exception to permit the completion of the acquisition of television assets serving the Reno, Nevada market.

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We are restricted from making future repurchases of shares of our common stock, except under a limited circumstance, which we utilized in May 2009 and may utilize again in the future.

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We are restricted from making any further debt repurchases in the secondary market.

The amendment also contains additional covenants, representations and provisions that are usual and customary for credit facilities of this type. All other provisions of our syndicated bank credit facility agreement, as amended, remain in full force and effect unless expressly amended or modified by the amendment.

At the time of entering into this amendment, we made a prepayment of $40 million to reduce the outstanding amount of our term loans and paid our lenders an amendment fee.

We recorded a loss on debt extinguishment of $4.7 million for fees, unamortized finance costs and interest rate swap agreement termination costs associated with the amendment to the syndicated bank credit facility during the nine-month period ended September 30, 2009.

The syndicated bank credit facility is secured by substantially all of our assets, as well as the pledge of the stock of substantially all of our subsidiaries, including the special purpose subsidiary formed to hold our FCC licenses. The syndicated bank credit facility contains customary events of default. If an event of default occurs and is continuing, we might be required to repay all amounts then outstanding under the syndicated bank credit facility. Lenders holding more than 50% of the loans and commitments under the syndicated bank credit facility may elect to accelerate the maturity of loans upon the occurrence and during the continuation of an event of default.

The syndicated bank credit facility contains certain financial covenants relating to maximum leverage ratio, maximum capital expenditures and minimum fixed charge coverage ratio. The covenants become increasingly restrictive in the later years of the syndicated bank credit facility. The syndicated bank credit facility also requires us to maintain FCC licenses for broadcast properties and contains restrictions on the incurrence of additional debt, the payment of dividends, the repurchase of shares of our own common stock, the making of acquisitions and the sale of assets.

Derivative Instruments

We use interest rate swap agreements to manage our exposure to the risks associated with changes in interest rates. We do not enter into derivative instruments for speculation or trading purposes. As of September 30, 2009, we had three interest rate swap agreements with a $206 million aggregate notional amount, with quarterly reductions, that expire on October 1, 2010, and a fourth interest rate swap agreement with a $155.9 million notional amount, with quarterly increases, that also expires on October 1, 2010. The three interest rate swap agreements convert a portion of the variable rate term loan into a fixed rate obligation of 9.71%, which includes a margin of 5.25%. The fourth interest rate swap agreement converts a portion of the variable rate term loan into a fixed rate obligation of 10.31%, which includes a margin of 5.25%. It is expected that the term loan amount will not exceed the notional amount of the four interest rate swap agreements. As of September 30, 2009 and 2008, these interest rate swap agreements were not designated for hedge accounting treatment, and as a result, changes in their fair values are reflected currently in earnings.

As of September 30, 2009, the fair value of the interest rate swap agreements was a liability of $19.4 million and is classified in other short-term liabilities on our balance sheet. As of December 31, 2008, the fair value of the interest rate swap agreements was a liability of $23.2 million and is classified in other short-term liabilities on our balance sheet.

For the three-month period ended September 30, 2009, we recognized a decrease of $1.3 million in interest expense related to the increase in fair value of the interest rate swap agreements. For the three-month period ended September 30, 2008, we recognized an increase of $0.4 million in interest expense related to the decrease in fair value of the interest rate swap agreements.

For the nine-month period ended September 30, 2009, we recognized a decrease of $3.8 million in interest expense related to the increase in fair value of the interest rate swap agreements. For the nine-month period ended September 30, 2008, we recognized an increase of $3.6 million in interest expense related to the decrease in fair value of the interest rate swap agreements.

Debt and Equity Financing

On November 1, 2006, our Board of Directors approved a stock repurchase program. We were authorized to repurchase up to $100 million of our outstanding Class A common stock from time to time in open market transactions at prevailing market prices, block trades and private repurchases. The extent and timing of any repurchases depended on market conditions and other factors. We completed this $100 million repurchase program in the second quarter of 2008.

On April 7, 2008, our Board of Directors approved another $100 million stock repurchase program. We repurchased a total of 20.8 million of our outstanding Class A common stock under this program since its inception through September 30, 2009. We are currently restricted from making future repurchases of shares of our common stock under the terms of our amended syndicated bank credit facility except under a limited circumstance, which we utilized in May 2009 and may utilize again in the future.

Consolidated Adjusted EBITDA

Consolidated adjusted EBITDA (as defined below) decreased to $40.3 million for the nine-month period ended September 30, 2009 from $60.2 million for the nine-month period ended September 30, 2008, a decrease of $19.9 million, or 33%. As a percentage of net revenue, consolidated adjusted EBITDA decreased to 29% for the nine-month period ended September 30, 2009 from 34% for the nine-month period ended September 30, 2008.

Consolidated adjusted EBITDA means net income (loss) plus loss (gain) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate and syndication programming amortization less syndication programming payments. We use the term consolidated adjusted EBITDA because that measure is defined in our syndicated bank credit facility and does not include loss (gain) on sale of assets, non-cash depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate and syndication programming amortization and does include syndication programming payments.

While many in the financial community and we consider consolidated adjusted EBITDA to be important, it should be considered in addition to, but not as a substitute for or superior to, other measures of liquidity and financial performance prepared in accordance with accounting principles generally accepted in the United States of America, such as cash flows from operating activities, operating income and net income. As consolidated adjusted EBITDA excludes non-cash (gain) loss on sale of assets, non-cash depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate and syndication programming amortization and includes syndication programming payments, consolidated adjusted EBITDA has certain limitations because it excludes and includes several important non-cash financial line items. Therefore, we consider both non-GAAP and GAAP measures when evaluating our business. Consolidated adjusted EBITDA is also used to make executive compensation decisions.

Consolidated adjusted EBITDA is a non-GAAP measure. For a reconciliation of consolidated adjusted EBITDA to cash flows from operating activities, its most directly comparable GAAP financial measure, please see page 19.

Cash Flow

Net cash flow provided by operating activities was $10.2 million for the nine-month period ended September 30, 2009 compared to net cash flow provided by operating activities of $33.0 million for the nine-month period ended September 30, 2008. We had a net loss of $15.6 million for the nine-month period ended September 30, 2009, which was partially offset by non-cash expenses, including depreciation and amortization expense of $15.9 million, deferred income taxes of $8.5 million and a carrying value adjustment of $2.7 million. We expect to continue to have positive cash flow from operating activities for at least the remainder of 2009.

Net cash flow used in investing activities was $9.1 million for the nine-month period ended September 30, 2009, compared to net cash flow provided by investing activities of $64.8 million for the nine-month period ended September 30, 2008. During the nine-month period ended September 30, 2009, we spent $5.4 million on net capital expenditures and $3.8 million related to the acquisition of television assets in Reno, Nevada. During the nine-month period ended September 30, 2008, we received $101.5 million from the sale of our outdoor advertising business and spent $13.4 million on net capital expenditures and $22.9 million related to the acquisition of radio assets in Orlando, Florida. We anticipate that our capital expenditures will be approximately $6.5 million during the full year 2009. Under the terms of our amended credit facility agreement, we are restricted from making acquisitions and investments when the leverage ratio is greater than 4.0, which is the case at the present time.

Net cash flow used in financing activities was $44.6 million for the nine-month period ended September 30, 2009, compared to $67.2 million for the nine-month period ended September 30, 2008. During the nine-month period ended September 30, 2009, we made net debt payments of $42.6 million, paid $1.2 million in fees and expenses related to the amendment of our syndicated bank credit facility, repurchased 1.3 million shares of our Class A common stock for $1.1 million including transaction fees and received net proceeds of $0.3 million from the sale of shares issued under our 2001 Employee Stock Purchase Plan. During the nine-month period ended September 30, 2008, we repurchased 8.8 million shares of our Class A common stock for $46.5 million including transaction fees, repurchased 1.5 million shares of our Class U common stock for $10.4 million, made net debt payments of $11.0 million and received net proceeds of $0.8 million from the sale of shares issued under our 2001 Employee Stock Purchase Plan. Under the terms of our amended credit facility agreement, we are prevented from making future repurchases of our Class A common stock except under a limited circumstance, which we utilized in May 2009 and may utilize again in the future.

In order comply with the terms of our amended credit facility agreement, our capital expenditures may not exceed $10 million in each of 2009 and 2010. During the full year 2009, we anticipate that our capital expenditures will be approximately $6.5 million. We anticipate paying for these capital expenditures out of net cash flow from operations.

In order to broadcast high definition programming in the future, we intend to begin construction at our studio control facilities in 2010, and at our production control facilities in 2011 and 2012. We currently expect that the total cost of this high definition upgrade at our local studio and control facilities will be approximately $15 million. We intend to finance the high definition upgrade by using net cash flow from operations.

The amount of our anticipated capital expenditures may change based on future changes in business plans, our financial condition and general economic conditions.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

General

Market risk represents the potential loss that may impact our financial position, results of operations or cash flows due to adverse changes in the financial markets. We are exposed to market risk from changes in the base rates on our variable rate debt. However, since February 2007, we have had four swap arrangements that convert the entire amount of our variable rate term loan into a fixed rate obligation. Under our syndicated bank credit facility, if we exceed certain leverage ratios we would be required to enter into derivative financial instrument transactions, such as swaps or interest rate caps, in order to manage or reduce our exposure to risk from changes in interest rates. Our current policy prohibits entering into derivatives or other financial instrument transactions for speculative purposes.

Interest Rates

Our term loan bears interest at LIBOR plus a margin of 5.25%, for a total interest rate of 5.54% at September 30, 2009. As of September 30, 2009, $361.9 million of our term loan was outstanding. Our revolving facility bears interest at LIBOR plus a margin ranging from 3.25% to 5.25% based on our leverage. As of September 30, 2009, we had approximately $1 million in outstanding letters of credit and $49 million was available under the revolving facility for future borrowings. Our syndicated bank credit facility requires us to enter into interest rate agreements if our leverage exceeds certain limits as defined in our credit agreement.

As of September 30, 2009, we had three interest rate swap agreements with a $206 million aggregate notional amount, with quarterly reductions, that expire on October 1, 2010, and one interest rate swap agreement with a $155.9 million notional amount, with quarterly increases, that also expires on October 1, 2010. The three interest rate swap agreements convert a portion of the variable rate term loan into a fixed rate obligation of 9.71 %, which includes a margin of 5.25%. The fourth interest rate swap agreement converts a portion of the variable rate term loan into a fixed rate obligation of 10.31 %, which includes a margin of 5.25%. It is expected that the term loan amounts will not exceed the notional amount of the four interest rate swap agreements.

We recognize all of our derivative instruments as either assets or liabilities in the consolidated balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship, and further, on the type of hedging relationship. As of September 30, 2009, our interest rate swap agreements were not designated for hedge accounting treatment, and as a result, the fair value was a liability of $19.4 million and was classified as other current liabilities on our balance sheet. For the three-month period ended September 30, 2009, we recognized a decrease of $1.3 million of interest expense related to the increase in fair value of the interest rate swap agreements.

We converted our variable rate term loan into a fixed rate obligation at September 30, 2005. We currently anticipate that the aggregate notional amount of our interest rate swap agreements will equal our loan amount outstanding. Since we converted our variable rate term loan into a fixed rate obligation through October 1, 2010, an increase in the variable interest rate or our bank credit facility would not currently affect interest expense payments. If the future interest yield curve decreases, the fair value of the interest rate swap agreements will decrease and interest expense will increase. If the future interest yield curve increases, the fair value of the interest rate swap agreements will increase and interest expense will decrease.

ITEM 4. CONTROLS AND PROCEDURES

We carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report. Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective in making known to them in a timely manner material information relating to us (including our consolidated subsidiaries) that is required to be included in our periodic SEC reports.

Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

There was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II.

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We currently and from time to time are involved in litigation incidental to the conduct of our business, but we are not currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us.

ITEM 1A. RISK FACTORS

No material change.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

On April 7, 2008, our Board of Directors approved our current stock repurchase program. We are authorized to repurchase up to $100 million of our outstanding Class A common stock from time to time in open market transactions at prevailing market prices, block trades and private repurchases. We are currently restricted from making future repurchases of shares of our common stock under the terms of our amended syndicated bank credit facility except under a limited circumstance, which we utilized in May 2009 and may utilize again in the future.

There were no stock repurchases for the three-month period ended September 30, 2009.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are attached hereto and filed herewith:

31.1	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934.

31.2	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934.

32	Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ENTRAVISION COMMUNICATIONS CORPORATION

	By:	/s/ CHRISTOPHER T. YOUNG
		Christopher T. Young
		Executive Vice President, Treasurer and Chief Financial Officer

Date: November 6, 2009

EXHIBIT INDEX

Exhibit Number		Description of Exhibit
31.1		Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934.
31.2		Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934.
32		Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.