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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

          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.

          As of May 6, 2003, there were 74,287,836 shares, $0.0001 par value per share, of the registrant’s Class A common stock outstanding and 27,678,533 shares, $0.0001 par value per share, of the registrant’s Class B common stock outstanding and 21,983,392 shares, $0.0001 par value per share, of the registrant’s Class C common stock outstanding.

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ENTRAVISION COMMUNICATIONS CORPORATION

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     Forward-Looking Statements

          This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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 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 to inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

          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 “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2002.

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PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

See Notes to Consolidated Financial Statements

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ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except share and per share data)

See Notes to Consolidated Financial Statements

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ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)

See Notes to Consolidated Financial Statements

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ENTRAVISION COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2003

1. BASIS OF PRESENTATION

          The condensed 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, or the 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 condensed or omitted pursuant to such rules and regulations. These condensed 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, 2002 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002. Certain items in the March 31, 2002 statement of operations have been reclassified in order to conform to the current period presentation, with no effect to reported net loss or net loss per share. 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, 2003 or any other future period.

          Subsequent to the issuance of the Company’s September 30, 2002 condensed consolidated unaudited quarterly financial statements filed on Form 10-Q, management reevaluated and revised certain classifications of intangible assets and their respective estimated useful lives under SFAS No. 142, which was adopted effective January 1, 2002. As a result of the reclassifications, the Company’s unaudited interim financial information for each of the first three 2002 calendar quarters and the associated year-to-date amounts in those periods have been retroactively restated (1) to reclassify the radio network intangible asset totaling $160 million (previously considered by management to be a separately identifiable indefinite life intangible asset) to goodwill, net of the related deferred income taxes of $64 million, and (2) to reclassify its Univision network affiliation agreement intangible asset totaling $46.6 million (also previously considered by management to be a separately identifiable indefinite life intangible asset) to intangible assets subject to amortization. The latter reclassification resulted in additional amortization expense of approximately $350,000, net of the related deferred tax benefit, for the Univision network affiliation agreement in each of the first three 2002 calendar quarters. The change had no impact on cash flows provided by operations. These reclassifications and restatements were previously reported in Note 14 to the consolidated financial statements included in the 2002 Form 10-K.

          During the periods ended March 31, 2002 and June 30, 2002, the Company previously recorded transitional goodwill impairment charges to its outdoor reporting unit’s goodwill in connection with the adoption of SFAS No. 142 as a cumulative effect of a change in accounting principle. In the third quarter of 2002, the Company completed its determination of the fair value of the outdoor reporting unit’s assets and liabilities. It was then determined that the fair value of the outdoor reporting unit’s customer base intangible asset was less than initially estimated and significantly less than its carrying value. As a result, the implied fair value of the outdoor reporting unit’s goodwill exceeded the carrying value. Accordingly, the estimated impairment charge previously recorded was reversed to reflect no goodwill impairment charge and the unaudited quarterly results of operations for the periods ended March 31, 2002 have been retroactively restated.

2. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

     Stock-based compensation

          Statement of Financial Accounting Standards (SFAS) No. 123, “Accounting for Stock-Based Compensation,” as amended by SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure,” prescribes accounting and reporting standards for all stock-based compensation plans, including

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employee stock option plans. As allowed by SFAS No. 123, the Company has elected to continue to account for its employee stock-based compensation plan using the intrinsic value method in accordance with Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations, which does not require compensation to be recorded if the consideration to be received is at least equal to the fair value of the common stock to be received at the measurement date. Under the requirements of SFAS No. 123, nonemployee stock-based transactions require compensation to be recorded based on the fair value of the securities issued or the services received, whichever is more reliably measurable.

          The following table illustrates the effect on net loss and loss per share had compensation costs for the stock-based compensation plan been determined based on grant date fair values of awards under the provisions of SFAS No. 123, for the three-month periods ended March 31 (unaudited; in thousands, except per share data):

     The Company did not grant any stock options during the three-month period ended March 31, 2003.

     Loss Per Share

          Basic loss per share is computed as net loss less accretion of the discount on Series A mandatorily redeemable convertible preferred stock divided by the weighted average number of shares outstanding for the period. The weighted average number of shares outstanding is reduced by 158,740 shares which are unvested stock grants subject to repurchase. Diluted loss per share reflects the potential dilution, if any, that could occur from shares issuable through stock options and convertible securities.

          For the three-month periods ended March 31, 2003 and 2002, all dilutive securities have been excluded from dilutive loss per share, as their inclusion would have had an antidilutive effect on loss per share. For the three-month period ended March 31, 2003, 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 loss per share if their effect was not antidilutive are as follows: the common stock equivalent effect of outstanding stock options; 158,740 unvested stock grants subject to repurchase; and 5,865,102 shares of Series A mandatorily redeemable convertible preferred stock.

     Completed and Pending Acquisitions

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          Upon consummation of each acquisition, the Company evaluates whether the acquisition constitutes a business. An acquisition is considered a business if it is comprised of a complete self-sustaining integrated set of activities and assets consisting of inputs, processes applied to those inputs and resulting outputs that are used to generate revenues. For a transferred set of activities and assets to be a business, it must contain all of the inputs and processes necessary for it to continue to conduct normal operations after the transferred set is separated from the transferor, which includes the ability to sustain a revenue stream by providing its outputs to customers. A transferred set of activities and assets fails the definition of a business if it excludes one or more significant items such that it is not possible for the set to continue normal operations and sustain a revenue stream by providing its products and/or services to customers.

          In January 2003, the Company acquired five low-power television stations in Santa Barbara, California from Univision for an aggregate purchase price of approximately $2.5 million. In February 2003, the Company acquired a low-power television station in Hartford, Connecticut for $50,000. The Company acquired $2.2 million in FCC licenses, or intangible assets not subject to amortization, in these acquisitions. None of these acquisitions was considered a business.

     Subsequent Event

          On January 15, 2003 the Company entered into a time brokerage agreement with Big City Radio, Inc. to operate three radio stations in the greater Los Angeles area prior to the acquisition of those three stations. On April 16, 2003, the Company consummated the purchase of substantially all of the assets of the three stations for $100 million in cash and 3,766,478 shares of Class A common stock. This acquisition was not considered a business.

3. SEGMENT INFORMATION

          The Company operates in four reportable segments:  television broadcasting, radio broadcasting, outdoor advertising and newspaper publishing.

     Television Broadcasting

          The Company owns and/or operates 42 primary television stations located primarily in the southwestern United States, consisting primarily of Univision affiliates.

     Radio Broadcasting

          The Company owns and/or operates 58 radio stations (43 FM and 15 AM) located primarily in Arizona, California, Colorado, Florida, Illinois, Nevada, New Mexico and Texas.

     Outdoor Advertising

          The Company owns approximately 11,400 billboards located primarily in Los Angeles and New York.

     Newspaper Publishing

          The Company’s newspaper publishing operation consists of a publication in New York.

          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 non-cash stock-based compensation. There were no significant sources of revenue generated outside the United States during the three-month periods ended March 31, 2003 and 2002. The Company evaluates the performance of its operating segments based on the following (unaudited, in thousands):

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4. LITIGATION

          The Company is subject to various outstanding claims and other legal proceedings that arose in the ordinary course of business. The Company is a party to three separate actions, none of which management believes is material, from plaintiffs seeking unspecified damages. Accruals have been made in the financial statements as necessary to provide for management’s best estimate of the probable liability associated with these actions. While the Company’s legal counsel cannot express an opinion on these matters, management believes that 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.

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

Overview

          We generate revenue from sales of national and local advertising time on television and radio stations and advertising on our billboards and in our publication. Advertising rates are, in large part, based on each media’s ability to attract audiences in demographic groups targeted by advertisers. We recognize advertising revenue when commercials are broadcast and outdoor advertising services and publishing services are provided. We do not obtain long-term commitments from our advertisers and, consequently, they may cancel, reduce or postpone orders without penalties. We pay commission expense to agencies on local, regional and national advertising. Our revenue reflects deductions from gross revenue for commissions to these agencies.

          We operate in four reportable segments: television broadcasting, radio broadcasting, outdoor advertising and newspaper publishing. As of March 31, 2003, we own and/or operate 42 primary television stations that are located primarily in the southwestern United States. We own and/or operate 58 radio stations (43 FM and 15 AM) located primarily in Arizona, California, Colorado, Florida, Illinois, Nevada, New Mexico and Texas. Our outdoor advertising segment consists of approximately 11,400 advertising faces located primarily in Los Angeles and New York.

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Our newspaper publishing operation consists of the newspaper El Diario/la Prensa in New York. The comparability of our results between the three-month periods ended March 31, 2003 and 2002 is significantly affected by acquisitions in those years.

          Our net revenue for the three-month period ended March 31, 2003 was $53 million. Of that amount, revenue generated by our television segment accounted for 48%; revenue generated by our radio segment accounted for 31%; revenue generated by our outdoor segment accounted for 12%; and revenue generated by our publishing segment accounted for 9%.

          Several factors may adversely affect our performance in any given period. Seasonal revenue fluctuations are common in the broadcasting and outdoor advertising industries and are due primarily to variations in advertising expenditures by both local and national advertisers. Our business is also affected by general trends in the national economic environment, as well as economic changes in the local or regional markets in which we operate. The effects of the economic downturn could continue to affect adversely our advertising revenues, causing our operating income to be reduced.

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

          As a result of the acquisitions we consummated in recent years, approximately 83% of our total assets and 129% of our net assets are intangible. We periodically review our long-lived assets, including intangible assets and goodwill related to those acquisitions to determine potential impairment. To date, we have determined that no impairment of long-lived assets or goodwill exists. In making this determination, the assumptions about future cash flows on the assets under evaluation are critical. Some stations under evaluation have had limited relevant cash flow history due to planned conversion of format or upgrade of station signal. The assumptions about increasing cash flows after conversion reflect management’s estimates of how these stations are expected to perform based on similar stations and markets and possible proceeds from the sale of the assets. If these expected increases or sale proceeds are not realized, impairment losses may be recorded in the future.

          On January 28, 2003, we acquired five low-power television stations in Santa Barbara, California from Univision for an aggregate purchase price of approximately $2.5 million. On February 28, 2003, we acquired a low-power television station in Hartford, Connecticut for $50,000. We evaluated the transferred set of activities, assets, inputs and processes in each of these acquisitions and determined that the items excluded were significant and that each of these acquisitions was not considered a business.

          On January 15, 2003 we entered into a time brokerage agreement, or TBA, with Big City Radio, Inc., which allowed us to operate three radio stations in the greater Los Angeles market (our “2003 TBA Stations”) prior to our acquisition of those three stations. On April 16, 2003, we consummated our purchase of substantially all of the assets of the 2003 TBA Stations for $100 million in cash and 3,766,478 shares of our Class A common stock. For purposes of allocating the purchase price, the Class A common stock issued to Big City Radio will be valued at approximately $37.8 million.

          Univision currently owns approximately 31% of our common stock. In connection with its proposed merger with Hispanic Broadcasting Corporation, Univision announced in February 2003 that it had reached a tentative agreement with the U.S. Department of Justice, or DOJ, pursuant to which Univision agreed, among other things, to sell enough of our stock so that its ownership of our company will not exceed 15% at the end of three years and 10% at the end of six years.

          Univision’s agreement with DOJ also requires that it exchange all of the shares of our Class A and Class C common stock which it currently owns for shares of our new Series U preferred stock, which series we anticipate will have limited voting rights and will not include the right to elect directors. We also anticipate that the new Series U preferred stock will be mandatorily convertible into common stock, without any liquidation preference, when and if we create a new class of common stock that generally has the same rights, preferences, privileges and restrictions as the Series U preferred stock. We believe that this exchange will occur in the near future. Univision’s agreement with DOJ will have no impact on our existing television station affiliation agreement with Univision.

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Three-Month Period Ended March 31, 2003 and 2002 (Unaudited)

          The following table sets forth selected data from our operating results for the three-month periods ended March 31, 2003 and 2002 (in thousands):

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Consolidated Operations

          Net Revenue. Net revenue increased to $53.0 million for the three-month period ended March 31, 2003 from $49.1 million for the three-month period ended March 31, 2002, an increase of $3.9 million. The overall increase was primarily attributable to our television and radio segments, which together accounted for $3.0 million of the increase. The increase from these segments was attributable to increased advertising sold (referred to as “inventory” in our industry), increased rates for that inventory, new revenue associated with our 2003 TBA Stations and increased revenue due to a full three months of operations of our 2002 acquisitions. The overall increase in net revenue was also partially attributable to our increased outdoor and publishing revenue, which together accounted for $0.9 million of the overall increase.

          We currently anticipate that a full year of operations from our 2002 and 2003 acquisitions will contribute to an overall increase in our net revenue for 2003. We also currently anticipate that the number of advertisers purchasing Spanish-language advertising will continue to rise and will result in greater demand for our inventory. We expect that this increased demand will, in turn, allow us to increase our rates, resulting in continued increases in net revenue in future periods.

          Direct Operating Expenses. Direct operating expenses increased to $28.7 million for the three-month period ended March 31, 2003 from $25.9 million for the three-month period ended March 31, 2002, an increase of $2.8 million. The overall increase was primarily attributable to our television and radio segments, which together accounted for $2.0 million of the increase. The increase from these segments was attributable to an increase in national representation fees, an increase in ratings services expenses, new expense associated with our 2003 TBA Stations and a full three months of operations of our 2002 acquisitions. The overall increase in direct operating expenses was also partially attributable to our outdoor and publishing segments, which together accounted for $0.8 million of the overall increase. As a percentage of net revenue, direct operating expenses were 54% for the three-month period ended March 31, 2003 and 53% for the three-month period ended March 31, 2002. Direct operating expenses as a percentage of net revenue increased due to our new 2003 TBA Stations and our 2002 acquisitions, which had fixed operating expenses with minimal start-up revenue.

          We currently anticipate that, as our net revenue increases in future periods, our direct operating expenses correspondingly will continue to increase. However, we expect that net revenue increases will outpace direct

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operating expense increases such that direct operating expenses as a percentage of net revenue will decrease in future periods.

          Selling, General and Administrative Expenses. Selling, general, and administrative expenses increased to $12.6 million for the three-month period ended March 31, 2003 from $11.3 million for the three-month period ended March 31, 2002, an increase of $1.3 million. The overall increase was primarily attributable to our television and radio segments, which together accounted for $1.2 million of the increase. The increase from these segments was attributable to an increase in insurance costs, new expenses associated with our 2003 TBA Stations and a full three months of operations of our 2002 acquisitions. As a percentage of net revenue, selling, general and administrative expenses were 24% for the three-month period ended March 31, 2003 and 23% for the three-month period ended March 31, 2002. Selling, general and administrative expenses as a percentage of net revenue increased due to increased insurance costs, new expenses associated with our 2003 TBA Stations and a full three months of expenses of our 2002 acquisitions.

          On a long-term basis, although we currently anticipate that selling, general and administrative expenses will increase in future periods, we expect that net revenue increases will outpace selling, general and administrative expense increases such that selling, general and administrative expenses as a percentage of net revenue will decrease in future periods. On a short-term basis, we currently anticipate incurring additional expenses in and after the third quarter of 2003 in connection with the relocation of our Radio Division to Los Angeles from Campbell, California, including expenses associated with any inability to sublease our existing space in Campbell during the six years currently remaining on that lease.

          Corporate Expenses. Corporate expenses decreased to $2.4 million for the three-month period ended March 31, 2003 from $3.4 million for the three-month period ended March 31, 2002, a decrease of $1.0 million. The decrease was primarily attributable to a $1.5 million reimbursement from Univision for legal and other costs associated with the third-party information request that we received in connection with the proposed merger between Univision and Hispanic Broadcasting Corporation. Approximately $0.6 million of the reimbursement was attributable to out-of-pocket expenses incurred with third-party service providers in 2002. This decrease was partially offset by increased insurance costs and accounting expenses. As a percentage of net revenue, corporate expenses decreased to 5% for the three-month period ended March 31, 2003 from 7% for the three-month period ended March 31, 2002. Excluding the Univision reimbursement, corporate expenses as a percentage of net revenue remained unchanged at 7% for each of the three-month periods ended March 31, 2003 and 2002.

          We currently anticipate that corporate expenses will increase in future periods, primarily due to increased insurance costs. Nevertheless, we expect that these increases will be outpaced by net revenue increases such that corporate expenses as a percentage of net revenue will decrease in future periods. 

          Depreciation and Amortization. Depreciation and amortization increased to $11.0 million for the three-month period ended March 31, 2003 from $7.2 million for the three-month period ended March 31, 2002, an increase of $3.8 million. This increase was primarily due to increased amortization of $3.2 million in our outdoor segment as a result of management revising downward its estimate of the remaining useful life of the outdoor segment’s customer base intangible from 13 years to eight years effective October 1, 2002.

          Non-Cash Stock-Based Compensation. Non-cash stock-based compensation decreased to $0.3 million for the three-month period ended March 31, 2003 from $1.0 million for the three-month period ended March 31, 2002, a decrease of $0.7 million. Non-cash stock-based compensation consists primarily of compensation expense relating to restricted and unrestricted stock awards granted to our employees during the second quarter of 2000.

          Operating Income (Loss). As a result of the above factors, we had an operating loss of $2.0 million for the three-month period ended March 31, 2003, compared to operating income of $0.3 million for the three-month period ended March 31, 2002. The change to operating loss was primarily due to the additional amortization expense in our outdoor segment.

          Interest Expense, Net. Interest expense decreased to $6.3 million for the three-month period ended March 31, 2003 from $6.6 million for the three-month period ended March 31, 2002, a decrease of $0.3 million. We incurred a $2.7 million write-down of deferred debt issue costs upon the early payment of approximately $200 million of debt in March 2002. Borrowings and interest rates on our average debt outstanding were each higher in

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2003 than in 2002. We anticipate that interest expense will increase in future periods due to our borrowing of an additional $100 million under our bank credit facility on April 16, 2003 to fund the cash portion of the purchase price for the three radio stations we acquired from Big City Radio.

          Income Tax Benefit. Our expected tax benefit is based on the estimated effective tax rate for the full year 2003. We currently have approximately $104 million in net operating loss carryforwards expiring through 2022 that we expect will be utilized prior to their expiration.

          Net Loss. Net loss increased to $6.7 million for the three-month period ended March 31, 2003 from $5.0 million for the three-month period ended March 31, 2002, an increase of $1.7 million. This increase was primarily attributable to the additional amortization expense in our outdoor segment.

Segment Operations

     Television

          Net Revenue. Net revenue in our television segment increased to $25.5 million for the three-month period ended March 31, 2003 from $24.0 million for the three-month period ended March 31, 2002, an increase of $1.5 million. Of the overall increase, $1.4 million was attributable to our Univision stations and $0.1 million was attributable to our TeleFutura stations. The increase was primarily attributable to an increase in national advertising sales due to a combination of an increase in rates and inventory sold.

          Direct Operating Expenses. Direct operating expenses in our television segment increased to $11.8 million for the three-month period ended March 31, 2003 from $11.2 million for the three-month period ended March 31, 2002, an increase of $0.6 million. The increase was primarily attributable to an increase in national representation fees associated with the increase in net revenue, an increase in the cost of ratings services and an increase in news costs due to additional newscasts in the San Diego and Orlando markets.

          Selling, General and Administrative Expenses. Selling, general and administrative expenses in our television segment increased to $5.8 million for the three-month period ended March 31, 2003 from $5.1 million for the three-month period ended March 31, 2002, an increase of $0.7 million. The increase was primarily attributable to an increase in insurance costs and expenses associated with our TeleFutura affiliates.

     Radio

           Net Revenue. Net revenue in our radio segment increased to $16.3 million for the three-month period ended March 31, 2003 from $14.8 million for the three-month period ended March 31, 2002, an increase of $1.5 million. The increase was primarily attributable to a combination of an increase in rates and inventory sold by our national radio sales representative – Lotus/Entravision Reps LLC, a joint venture we entered into in August 2001 with Lotus Hispanic Reps Corp. – as well as new revenue associated with our 2003 TBA Stations and a full three months of operations of our 2002 acquisitions.

          Direct Operating Expenses. Direct operating expenses in our radio segment increased to $7.8 million for the three-month period ended March 31, 2003 from $6.5 million for the three-month period ended March 31, 2002, an increase of $1.3 million. The increase was primarily attributable to an increase in commissions and national representation fees associated with the increase in net revenue, new expenses associated with our 2003 TBA Stations and a full three months of operations of our 2002 acquisitions.

          Selling, General and Administrative Expenses. Selling, general and administrative expenses in our radio segment increased to $5.0 million for the three-month period ended March 31, 2003 from $4.4 million for the three-month period ended March 31, 2002, an increase of $0.6 million. The increase was primarily attributable to an increase in insurance costs, new expenses associated with our 2003 TBA Stations and a full three months of operations of our 2002 acquisitions. 

     Outdoor

          Net Revenue. Net revenue from our outdoor segment increased to $6.5 million for the three-month period ended March 31, 2003 from $5.7 million for the three-month period ended March 31, 2002, an increase of $0.8

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million. The increase was primarily attributable to an increase in national advertising sales due to a combination of an increase in rates and inventory sold.

          We currently anticipate that, as the U.S. economy and the advertising markets gradually recover from the economic downturn, net revenues in our outdoor segment will continue to increase moderately in future periods. We have seen signs of recovery in our outdoor advertising markets, as both rates and inventory sold increased in the last six months of 2002 and the first three months of 2003.

          Direct Operating Expenses. Direct operating expenses from our outdoor segment increased to $4.9 million for the three-month period ended March 31, 2003 from $4.7 million for the three-month period ended March 31, 2002, an increase of $0.2 million. The increase was primarily attributable to higher installation costs as a result of increased sales.

          Selling, General and Administrative Expenses. Selling, general and administrative expenses from our outdoor segment increased to $1.1 million for the three-month period ended March 31, 2003 from $0.9 million for the three-month period ended March 31, 2002, an increase of $0.2 million. The increase was primarily attributable to higher sales commissions associated with the increase in net revenue.

     Publishing

          Net Revenue. Net revenue in our publishing segment increased to $4.8 million for the three-month period ended March 31, 2003 from $4.6 million for the three-month period ended March 31, 2002, an increase of $0.2 million. The increase was primarily attributable to greater supplemental insert revenue from national retailers and sponsorship revenue related to the 90^th anniversary of the newspaper.

          Direct Operating Expenses. Direct operating expenses in our publishing segment increased to $4.1 million for the three-month period ended March 31, 2003 from $3.5 million for the three-month period ended March 31, 2002, an increase of $0.6 million. The increase was primarily attributable to an increase in insurance expenses, an increase in distribution expenses, an increase in expenses for the 90^th anniversary of the newspaper and higher news expenses associated with coverage of the war with Iraq.

          Selling, General and Administrative Expenses. Selling, general and administrative expenses in our publishing segment were $0.8 million for each of the three-month periods ended March 31, 2003 and 2002.

Liquidity and Capital Resources

          While we have a history of operating losses, we have a history of generating significant positive cash flow from our operations. We expect to fund anticipated cash requirements (including acquisitions, anticipated capital expenditures, including digital conversion, share repurchases and payments of principal and interest on outstanding indebtedness and commitments) with cash flow from operations and externally generated funds, such as proceeds from any debt or equity offering and our bank credit facility. We currently anticipate that funds generated from operations and available borrowings under our bank credit facility will be sufficient to meet our anticipated cash requirements for the foreseeable future.

     Bank Credit Facility

          Our primary sources of liquidity are cash provided by operations and available borrowings under our bank credit facility. We have a $400 million bank credit facility, expiring in 2007, comprised of a $250 million revolving facility and a $150 million uncommitted loan facility. The original $250 million amount of the revolving facility is subject to an automatic quarterly reduction, and had been reduced to $231 million as of March 31, 2003. Our ability to make additional borrowings under the bank credit facility is subject to compliance with certain financial ratios and other conditions set forth in the bank credit facility.

          Our 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 our consolidated special purpose subsidiaries formed to hold our Federal Communications Commission, or FCC, licenses.

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          In connection with the issuance of our senior subordinated notes, we amended our bank credit facility to conform to certain provisions in the indenture governing our senior subordinated notes. On April 16, 2003, we further amended our bank credit facility in connection with our acquisition of three radio stations from Big City Radio to, among other things, specifically contemplate that transaction, adjust upward the existing covenants relating to maximum total debt ratio and remove the existing cap on the incurrence of subordinated indebtedness.

          The revolving facility bears interest at LIBOR (1.30% at March 31, 2003) plus a margin ranging from 0.875% to 3.25% based on our leverage. In addition, we pay a quarterly loan commitment fee ranging from 0.25% to 0.75% per annum, which is levied upon the unused portion of the amount available. As of March 31, 2003, $66 million was outstanding under our bank credit facility and $165 million was available for future borrowings. On April 16, 2003, we drew an additional $100 million under the bank credit facility to fund the cash portion of the purchase price for the three radio stations we acquired from Big City Radio.

          Our bank credit facility contains a mandatory prepayment clause, triggered in the event that we liquidate any assets if the proceeds are not utilized to acquire assets of the same type within 180 days, receive insurance or condemnation proceeds which are not fully utilized toward the replacement of such assets or have excess cash flow, as defined in our bank credit facility, 50% of which excess cash flow shall be used to reduce our outstanding loan balance.

          Our bank credit facility contains certain financial covenants relating to maximum total debt ratio, minimum total interest coverage ratio and fixed charge coverage ratio. The covenants become increasingly restrictive in the later years of the bank credit facility. Our bank credit facility also requires us to maintain our FCC licenses for our broadcast properties and contains restrictions on the incurrence of additional debt, the payment of dividends, the making of acquisitions and the sale of assets over a certain limit. Additionally, we are required to enter into interest rate agreements if our leverage exceeds certain limits.

          We can draw on our revolving facility without prior approval for working capital needs and for acquisitions having an aggregate maximum consideration of less than $25 million. Acquisitions having an aggregate maximum consideration of greater than $25 million but less than or equal to $100 million are conditioned upon our delivery to the agent bank of a covenant compliance certificate showing pro forma calculations assuming such acquisition had been consummated and revised revenue projections for the acquired stations. For acquisitions having an aggregate maximum consideration in excess of $100 million, majority lender consent of the bank group is required.

     Debt and Equity Financing

          On March 18, 2002, we issued $225 million of our senior subordinated notes due 2009. The senior subordinated notes bear interest at 8 ¹/8% per year, payable semi-annually on March 15 and September 15 or each year, commencing on September 15, 2002. The net proceeds from our senior subordinated notes were used to repay all indebtedness then outstanding under our bank credit facility and for general corporate purposes.

          On May 9, 2002, we filed a shelf registration statement with the U.S. Securities and Exchange Commission, or SEC, to register up to $500 million of equity and debt securities, which we may offer from time to time. That shelf registration statement has been declared effective by the SEC. We have not yet issued any securities under the shelf registration statement. We intend to use the proceeds of any issuance of securities under the shelf registration statement to fund acquisitions or capital expenditures, to reduce or refinance debt or other obligations and for general corporate purposes.

          On April 16, 2003, we issued 3,766,478 shares of our Class A common stock as a portion of the purchase price for the three radio stations we acquired from Big City Radio.

     Broadcast Cash Flow and EBITDA as Adjusted

          Broadcast cash flow decreased to $11.8 million for the three-month period ended March 31, 2003 from $11.9 million for the three-month period ended March 31, 2002, a decrease of $0.1 million, or 1%. As a percentage of net revenue, broadcast cash flow was 22% for the three-month period ended March 31, 2003 and 24% for the three-month period ended March 31, 2002.

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          We currently anticipate that broadcast cash flow will increase in future periods, both in absolute dollars and as a percentage of net revenue, as we believe that net revenue increases will outpace the increases in direct operating and selling, general and administrative expenses.

          EBITDA as adjusted increased to $9.3 million for the three-month period ended March 31, 2003 from $8.5 million for the three-month period ended March 31, 2002, an increase of $0.8 million, or 10%. As a percentage of net revenue, EBITDA as adjusted was 18% for the three-month period ended March 31, 2003 and 17% for the three-month period ended March 31, 2002.

          We currently anticipate that EBITDA as adjusted will increase in future periods, both in absolute dollars and as a percentage of net revenue, as we believe that net revenue increases will outpace the increases in direct operating and selling, general and administrative and corporate expenses.

           Broadcast cash flow means operating income (loss) before corporate expenses, depreciation and amortization and non-cash stock-based compensation. EBITDA as adjusted means broadcast cash flow less corporate expenses. We use the term EBITDA as adjusted because that measure does not include non-cash stock-based compensation. We evaluate and project the liquidity and cash flows of our business using several measures, including broadcast cash flow and EBITDA as adjusted. We consider these measures as important indicators of liquidity relating to our operations, as they eliminate the effects of non-cash depreciation and amortization and non-cash stock-based compensation awards. We use these measures to evaluate liquidity and cash flow improvement from year to year as they eliminate non-cash expense items. We that believe our investors should use these measures because they may provide a better comparability of our liquidity to that of our competitors.

          Our calculation of EBITDA as adjusted included herein is substantially similar to the measures used in the financial covenants included in our bank credit facility and in the indenture governing our senior subordinated notes. In those instruments, EBITDA as adjusted is referred to as “operating cash flow” and “consolidated cash flow,” respectively. Under our bank credit facility as currently amended, we cannot incur additional indebtedness if the incurrence of such indebtedness would result in our ratio of total debt to operating cash flow having exceeded 6.5 to 1 on a pro forma basis for the prior full four quarters. Under the indenture, the corresponding ratio of total indebtedness to consolidated cash flow cannot exceed 7.1 to 1 on the same basis. The actual ratios of total indebtedness to each of operating cash flow and consolidated cash flow as of March 31, 2003 and 2002 were 5.1 to 1 and 5.9 to 1, respectively.

         While we and many in the financial community consider broadcast cash flow and EBITDA as adjusted to be important, they 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. In addition, our definitions of broadcast cash flow and EBITDA as adjusted differ from those of many companies reporting similarly named measures.

          For a reconciliation of each of broadcast cash flow and EBITDA as adjusted to net loss, their most directly comparable GAAP financial measure, please see pages 20-21.

     Cash Flow