10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2008

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 1-12187

(Exact name of registrant as specified in its charter)

Delaware	58-1620022
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6205 Peachtree Dunwoody Road

Atlanta, Georgia 30328

(Address of principal executive offices and zip code)

(678) 645-0000

(Registrant’s telephone number, including area code)

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 is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class A common stock, par value of $0.33 – 22,552,287 shares outstanding as of September 30, 2008

Class B common stock, par value of $0.33 – 58,733,016 shares outstanding as of September 30, 2008

COX RADIO, INC.

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2008

TABLE OF CONTENTS

		Page
Part I – Financial Information
Item 1.	Consolidated Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	19
Part II - Other Information
Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds Equity Securities	19
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Submission of Matters to a Vote of Security Holders	20
Item 5.	Other Information	20
Item 6.	Exhibits	20
Signatures		22

Preliminary Note

This Quarterly Report on Form 10-Q is for the three-month period ended September 30, 2008. This Quarterly Report modifies and supersedes documents filed prior to this Quarterly Report. The SEC allows us to “incorporate by reference” information that we file with them, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report. In this Quarterly Report, “Cox Radio,” “we,” “us” and “our” refer to Cox Radio, Inc. and its subsidiaries.

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Part I – FINANCIAL INFORMATION

ITEM 1. Consolidated Financial Statements

COX RADIO, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30, 2008			December 31, 2007
	(Amounts in thousands, except share data)
ASSETS
Current assets:
Cash	$	1,805		$	2,009
Accounts and notes receivable, less allowance for doubtful accounts of $2,955 and $2,948, respectively		80,802			85,555
Income taxes receivable		4,173			—
Prepaid expenses and other current assets		7,037			5,650
Total current assets		93,817			93,214
Property and equipment, net		73,309			72,528
FCC licenses and other intangible assets, net		1,523,469			1,592,542
Goodwill		197,131			211,608
Other assets		16,308			27,472
Total assets	$	1,904,034		$	1,997,364
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	26,205		$	29,340
Accrued salaries and wages		2,324			2,920
Accrued interest		635			833
Income taxes payable		—			1,338
Amounts due to Cox Enterprises		5,533			16,602
Other current liabilities		10,143			5,150
Total current liabilities		44,840			56,183
Long-term debt		415,000			320,000
Deferred income taxes		413,104			442,990
Other long-term liabilities		23,082			23,951
Total liabilities		896,026			843,124
Commitments and contingencies (Note 4)
Shareholders’ equity:
Preferred stock, $0.33 par value: 15,000,000 shares authorized, none outstanding		—			—
Class A common stock, $0.33 par value; 210,000,000 shares authorized; 43,306,223 and 43,191,705 shares issued and 22,552,287 and 31,735,087 shares outstanding at September 30, 2008 and December 31, 2007, respectively		14,291			14,253
Class B common stock, $0.33 par value; 135,000,000 shares authorized; 58,733,016 shares issued and outstanding at September 30, 2008 and December 31, 2007		19,382			19,382
Additional paid-in capital		647,106			642,626
Retained earnings		585,711			632,388
		1,266,490			1,308,649
Less: Class A common stock held in treasury (20,753,936 and 11,456,618 shares at cost at September 30, 2008 and December 31, 2007, respectively)		(258,482	)		(154,409	)
Total shareholders’ equity		1,008,008			1,154,240
Total liabilities and shareholders’ equity	$	1,904,034		$	1,997,364

See notes to unaudited consolidated financial statements.

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COX RADIO, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Amounts in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Net revenues:
Local	$	74,549		$	77,227		$	222,328		$	233,262
National		20,941			24,472			61,646			70,204
Other		9,374			10,066			26,920			27,054
Total revenues		104,864			111,765			310,894			330,520
Operating expenses:
Cost of services (exclusive of depreciation and amortization shown below)		25,114			24,242			71,217			69,825
Selling, general and administrative		41,715			42,229			123,714			132,626
Corporate general and administrative		4,865			5,334			13,752			16,043
Depreciation and amortization		2,584			2,741			7,922			8,467
Impairment of intangible assets		—			—			147,633			—
Other operating expenses, net		73			81			134			166
Operating income (loss)		30,513			37,138			(53,478	)		103,393
Other income (expense):
Interest expense		(3,214	)		(5,044	)		(10,114	)		(16,119	)
Other items, net		—			471			27			791
Income (loss) before income taxes		27,299			32,565			(63,565	)		88,065
Current income tax expense		1,380			7,487			13,308			21,142
Deferred income tax expense (benefit)		10,048			4,882			(30,196	)		12,940
Total income tax expense (benefit)		11,428			12,369			(16,888	)		34,082
Net income (loss)	$	15,871		$	20,196		$	(46,677	)	$	53,983
Basic net income (loss) per share
Net income (loss) per common share	$	0.19		$	0.22		$	(0.55	)	$	0.57
Diluted net income (loss) per share
Net income (loss) per common share	$	0.19		$	0.21		$	(0.55	)	$	0.57
Weighted average basic common shares outstanding		82,793			93,896			85,364			94,691
Weighted average diluted common shares outstanding		83,383			94,458			85,364			95,279

See notes to unaudited consolidated financial statements.

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COX RADIO, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(Unaudited)

	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital
	Shares	Amount		Shares	Amount
	(Amounts in thousands)
Balance at December 31, 2007	43,192	$	14,253	58,733	$	19,382	$	642,626
Net loss	—		—	—		—		—
Stock-based compensation expense	—		—	—		—		3,297
Repurchase of Class A common stock	—		—	—		—		—
Issuance of Class A common stock related to incentive plans	114		38	—		—		1,263
Tax benefit of stock options exercised	—		—	—		—		(80	)
Balance at September 30, 2008	43,306	$	14,291	58,733	$	19,382	$	647,106

	Retained Earnings			Treasury Stock				Total
				Shares	Amount
	(Amounts in thousands)
Balance at December 31, 2007	$	632,388		11,457	$	(154,409	)	$	1,154,240
Net loss		(46,677	)	—		—			(46,677	)
Stock-based compensation expense		—		—		—			3,297
Repurchase of Class A common stock		—		9,297		(104,073	)		(104,073	)
Issuance of Class A common stock related to incentive plans		—		—		—			1,301
Tax benefit of stock options exercised		—		—		—			(80	)
Balance at September 30, 2008	$	585,711		20,754	$	(258,482	)	$	1,008,008

See notes to unaudited consolidated financial statements.

5

COX RADIO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2008			2007
	(Amounts in thousands)
Cash flows from operating activities:
Net (loss) income	$	(46,677	)	$	53,983
Items not requiring cash:
Depreciation and amortization		7,923			8,467
Deferred income taxes		(30,196	)		12,940
Compensation expense related to long-term incentive compensation plans		1,250			6,387
Other		221			(682	)
Impairment of intangible assets		147,633			—
Changes in assets and liabilities:
Decrease (increase) in accounts receivable		4,928			(5,657	)
(Decrease) increase in accounts payable and accrued expenses		(2,938	)		320
(Decrease) increase in accrued salaries and wages		(596	)		704
Decrease in accrued interest		(198	)		(298	)
(Decrease) increase in income taxes payable		(5,405	)		1,009
Other, net		4,517			2,565
Net cash provided by operating activities		80,462			79,738
Cash flows from investing activities:
Capital expenditures		(5,275	)		(7,105	)
Acquisitions and related expenses, net of cash acquired		(48,110	)		(5,000	)
Investment in signal upgrades		(6,961	)		(1,717	)
Proceeds from insurance recovery		1,650			1,950
Other, net		(2,852	)		(355	)
Net cash used in investing activities		(61,548	)		(12,227	)
Cash flows from financing activities:
Net borrowings under (repayments of) revolving credit facility		95,000			(50,000	)
Repurchase of Class A common stock		(104,073	)		(28,403	)
Proceeds from issuances of stock related to stock-based compensation plans		1,301			291
Tax (expense) benefit of stock options exercised		(80	)		18
(Decrease) increase in book overdrafts		(197	)		254
(Decrease) increase in amounts due to Cox Enterprises		(11,069	)		9,528
Net cash used in financing activities		(19,118	)		(68,312	)
Net decrease in cash and cash equivalents		(204	)		(801	)
Cash and cash equivalents at beginning of period		2,009			4,381
Cash and cash equivalents at end of period	$	1,805		$	3,580
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	10,545		$	16,419
Income taxes		18,792			20,115

See notes to unaudited consolidated financial statements.

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COX RADIO, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Other Information

Cox Radio is a leading national radio broadcasting company whose business, which constitutes one reportable segment for accounting purposes, is devoted to acquiring, developing and operating radio stations located throughout the United States. Cox Enterprises, Inc. indirectly owns approximately 77% of the common stock of Cox Radio and has approximately 97% of the voting power of Cox Radio.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnote disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, the financial statements reflect all adjustments considered necessary for a fair statement of the results of operations and financial position for the interim periods presented. All such adjustments are of a normal, recurring nature. These unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2007 and notes thereto contained in Cox Radio’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (SEC).

The results of operations for the three-month period ended September 30, 2008 are not necessarily indicative of the results to be expected for the year ending December 31, 2008 or any other period.

2. Summary of Significant Accounting Policies

Revenue Recognition

Cox Radio’s revenues are comprised primarily of local and national advertising revenue. Local revenues are comprised of advertising sales made within a station’s local market or region either directly with the advertiser or through the advertiser’s agency. National revenues represent sales made to advertisers or agencies that are purchasing advertising for multiple markets; these sales are typically facilitated by a national representation firm that serves as Cox Radio’s sales agent in these transactions. Other revenues are comprised of Internet revenues, syndicated radio program revenues, network revenues and revenues from community events and sponsorships.

Cox Radio recognizes revenues when the following conditions are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price is fixed or determinable; and collectibility is reasonably assured. These criteria are generally met for advertising revenue at the time an advertisement is broadcast. Advertising revenue is recorded net of advertising agency commissions. Agency commissions, when applicable, are calculated based on a stated percentage applied to gross revenues. Cox Radio records an allowance for doubtful accounts based on historical information, analysis of credit memo data and any other relevant factors. Internet revenue is recognized as ads are run over the Internet. Non-traditional event revenue is recognized when the event occurs.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. Depreciation is computed principally using the straight-line method at rates based upon estimated useful lives of 5 to 40 years for buildings and building improvements, 5 to 25 years for broadcast equipment, 7 to 10 years for furniture and fixtures and 2 to 5 years for computers, software and other equipment.

Expenditures for maintenance and repairs are charged to operating expense as incurred. At the time of retirements, sales or other dispositions of property, the original cost and related accumulated depreciation are written off.

Intangible Assets

Intangible assets consist primarily of Federal Communications Commission (FCC) broadcast licenses, but also include goodwill and certain other intangible assets acquired in purchase business combinations. In accordance with Statement of Financial Accounting

7

Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets,” Cox Radio does not amortize goodwill and FCC licenses, which are indefinite-lived intangible assets. Other intangible assets are amortized on a straight-line basis over the contractual lives of such assets.

Cox Radio evaluates its FCC licenses for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. FCC licenses are evaluated for impairment at the market level using the direct method. If the carrying amount of FCC licenses is greater than their estimated fair value in a given market, the carrying amount of FCC licenses in that market is reduced to their estimated fair value. Cox Radio also evaluates goodwill in each of its reporting units (markets) for impairment annually, or more frequently if certain circumstances are present, using the residual method. If the carrying amount of goodwill in a reporting unit is greater than its implied value, determined from the estimated fair value of such reporting unit, the carrying amount of goodwill in that reporting unit is reduced to its estimated fair value.

Cox Radio utilizes independent appraisals in testing FCC licenses and goodwill for impairment. These appraisals principally use the discounted cash flow methodology. This income approach consists of a quantitative model, which incorporates variables such as market advertising revenues, market revenue share projections, anticipated operating profit margins and various discount rates. The variables used in the analysis reflect historical station and advertising market growth trends, as well as anticipated performance and market conditions. Multiples of operating cash flow are also considered. Cox Radio evaluates amortizing intangible assets for recoverability when circumstances indicate an impairment may have occurred, using an undiscounted cash flow methodology. If the future undiscounted cash flows for the intangible asset are less than net book value, net book value is reduced to the estimated fair value.

Other Assets

Other assets consist primarily of investments in signal upgrades. Signal upgrades represent the process of enhancing a selected station’s signal strength, allowing it to reach a greater listening audience with a higher quality signal and thereby potentially improving ratings, future cash flows, and ultimately the value of the related FCC license. Upon completion of each signal upgrade, Cox Radio reclassifies the costs incurred for the upgrade to FCC licenses. The amount reclassified is validated based upon an independent appraisal of the FCC license after the upgrade is completed.

Impairment of Long-Lived Assets

Cox Radio accounts for long-lived assets in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Long-lived assets are required to be reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, with any impairment losses being reported in the period in which the recognition criteria are first applied based on the fair value of the asset. Cox Radio assesses the recoverability based on a review of estimated undiscounted cash flows. Long-lived assets to be disposed of are required to be reported at the lower of carrying amount or fair value less cost to sell.

Income Taxes

Cox Radio provides for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.” SFAS No. 109 requires an asset and liability based approach in accounting for income taxes. Deferred income taxes reflect the net tax effect on future years of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes. Cox Radio evaluates its effective tax rates regularly and adjusts rates when appropriate based on currently available information relative to statutory rates, apportionment factors and the applicable taxable income in the jurisdictions in which Cox Radio operates, among other factors.

Cox Radio adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. (FIN) 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109, Accounting for Income Taxes,” on January 1, 2007. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest benefit that is greater than 50 percent likely of being realized upon settlement.

For the nine months ended September 30, 2008, there were no material changes in unrecognized tax benefits. While it is reasonably possible that the amount of unrecognized tax benefits will increase or decrease within the next 12 months due to the settlement of ongoing audits or the lapse of statutes of limitations, Cox Radio does not expect any change in the amount of unrecognized tax benefits to be material to its financial statements.

8

As of September 30, 2008, Cox Radio’s federal income tax return examinations were completed through tax years ended 2003, and Cox Radio’s significant state tax return examinations were completed through tax years ended 2004.

Cox Radio classifies interest and penalties associated with its unrecognized tax benefits as a component of income tax expense.

Incentive Compensation Plans

Cox Radio’s Long-Term Incentive Plan (LTIP) provides for the grant of various equity-based awards. In 2007, awards issued under the LTIP consisted of a mix of restricted stock and performance awards to selected officers and senior executives. In 2008, awards issued under the LTIP consisted of a mix of restricted stock units and performance awards to selected officers and senior executives. Performance awards are designed to increase in value based on Cox Radio’s operating performance and are denominated as a number of units which are multiplied by the percentage increase in certain pre-established financial metrics over a five-year period. Performance awards vest 60% in the third year, 80% in the fourth year and 100% in the fifth year from the date of grant. Cox Radio recognizes compensation expense related to the performance awards over the appropriate vesting period based on the amount that is expected to be paid upon vesting of the awards. Performance awards will be paid out in cash or, for certain employees, in a combination of cash and Cox Radio stock, which will remain subject to restrictions on resale or transfer as long as the recipient is employed by Cox Radio or its affiliates.

Awards of restricted stock and restricted stock units fully vest five years after the date of grant and are subject to a risk of forfeiture until the vesting date. Both types of awards are accounted for in accordance with SFAS No. 123 (revised 2004), “Share Based Payment” (SFAS No. 123R), which requires the measurement and recognition of compensation expense for all share-based payment awards based on estimated fair values. Cox Radio recognizes compensation expense for all restricted stock and restricted stock unit awards over the five-year vesting period.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Concentration of Risk

A significant portion of Cox Radio’s business historically has been conducted in the Atlanta market. Net revenues earned from radio stations located in Atlanta represented 24% and 26% of total revenues for the three-month periods ended September 30, 2008 and 2007, respectively, and 24% and 25% of total revenues for the nine-month periods ended September 30, 2008 and 2007, respectively.

3. Earnings Per Common Share and Capital Structure

	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008			2007
	(Amounts in thousands, except per share data)
Net income (loss)	$	15,871	$	20,196	$	(46,677	)	$	53,983
Earnings per share – basic
Weighted average common shares outstanding		82,793		93,896		85,364			94,691
Net income (loss) per common share – basic	$	0.19	$	0.22	$	(0.55	)	$	0.57
Earnings per share – diluted
Weighted average common shares outstanding		82,793		93,896		85,364			94,691
Effect of dilutive securities:
Employee Stock Purchase Plan		—		29		—			37
Long-Term Incentive Plan		590		533		—			551
Shares applicable to earnings per share – diluted		83,383		94,458		85,364			95,279
Net income (loss) per common share – diluted	$	0.19	$	0.21	$	(0.55	)	$	0.57

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Options to purchase 5.8 million and 6.0 million shares of Class A common stock were excluded from the computation of net income per common share – diluted for the three-month periods ended September 30, 2008 and 2007, respectively, because the exercise price of these options was greater than the average market price of the common stock during the respective periods. Options to purchase 5.7 million and 6.0 million shares of Class A common stock were excluded from the computation of net income per common share – diluted for the nine-month periods ended September 30, 2008 and 2007, respectively, because the exercise price of these options was greater than the average market price of the common stock during the respective periods.

4. Long-Term Debt, Commitments and Contingencies

At September 30, 2008 and December 31, 2007, outstanding long-term debt consisted only of amounts borrowed under the revolving credit facility described below.

In July 2006, Cox Radio entered into a $600 million five-year unsecured revolving credit facility. The interest rate for the facility is, at Cox Radio’s option:

• the greater of the prime rate or the federal funds borrowing rate plus 0.5%;

• the London Interbank Offered Rate (LIBOR) plus a spread based on the credit ratings of Cox Radio’s senior unsecured long-term debt; or

• the federal funds borrowing rate plus a spread based on the credit ratings of Cox Radio’s senior unsecured long-term debt.

The credit facility includes commitment fees on the unused portion of the total amount available, which fees range from 0.070% to 0.225% depending on the credit rating of Cox Radio’s senior secured long-term debt. The credit facility contains, among other provisions, specified leverage and interest coverage requirements, the terms of which are defined within the credit facility. At September 30, 2008, Cox Radio was in compliance with these covenants. The credit facility also contains customary events of default, including, but not limited to, failure to pay principal or interest, failure to pay or acceleration of other material debt, misrepresentation or breach of warranty, violation of certain covenants and change of control.

At September 30, 2008, Cox Radio had $415 million of outstanding indebtedness under the credit facility with $185 million available for borrowing. The interest rate applied to amounts due under the credit facility was 3.1% at September 30, 2008. At December 31, 2007, Cox Radio had $320 million of outstanding indebtedness under the credit facility with $280 million available for borrowing. The interest rate applied to amounts due under the facility was 5.7% at December 31, 2007. Since the interest rate under the credit facility is variable, the recorded balance of the credit facility approximates fair value.

In February 2005, Cox Radio agreed to guarantee the borrowings of a third party of up to $5 million to enable that party to purchase two stations and assist Cox Radio in a signal upgrade project for one of its stations. In August 2007, Cox Radio amended this agreement to increase the guarantee to up to $6 million and to extend the expiration to June 2009. If the Cox Radio signal upgrade is approved by the FCC, then Cox Radio is likely to purchase the stations and performance under the guarantee will not be necessary. If the signal upgrade is not approved, Cox Radio’s guarantee will be extinguished either through sale of the stations or through new financing arranged by the owner of the stations. Cox Radio believes that while the value of the stations currently may be insufficient to repay the outstanding debt in full, any shortfall would be immaterial. At September 30, 2008 and December 31, 2007, the carrying value of this guarantee was $0.7 million and $0.6 million, respectively.

In January 2005, Cox Radio paid $2 million for an option to purchase five radio stations serving the Athens, Georgia market for $60 million. Under the terms of the option agreement, Cox Radio paid the sellers $5 million in each of July 2006 and July 2007. In January 2008, Cox Radio exercised its option, and in February 2008, Cox Radio entered into a definitive asset purchase agreement to acquire the original five radio stations subject to the option and an additional station in Washington, Georgia, for $60 million, less amounts previously paid of $12 million. The station in Washington, Georgia has been relocated to Athens, Georgia. Cox Radio consummated this acquisition on August 1, 2008. The majority of the $60 million purchase price, adjusted for customary closing adjustments, was allocated to FCC licenses upon consummation of the transaction.

Cox Radio has an effective shelf registration statement under which Cox Radio may from time to time offer and issue debentures, notes, bonds and other indebtedness and forward contracts in respect of any such indebtedness, shares of preferred stock, shares of

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Class A common stock, warrants, stock purchase contracts, stock purchase units and stock purchase rights, and two financing trusts sponsored by Cox Radio may also offer and issue preferred securities of the trusts for an original maximum aggregate offering amount of up to $300 million. Under SEC rules, Cox Radio’s shelf registration statement will expire on December 1, 2008, unless Cox Radio files a new registration statement prior to such expiration date.

Each of Cox Radio’s radio stations operates pursuant to one or more licenses issued by the FCC that have a maximum term of eight years, subject to renewal. Cox Radio’s FCC broadcast licenses expire at various times from 2011 to 2014. Although Cox Radio may apply to renew its FCC broadcast licenses, third parties may challenge Cox Radio’s renewal applications. Cox Radio is not aware of any facts or circumstances that would prevent it from having its current licenses renewed. Since becoming a public company in 1996, the FCC has not denied any of Cox Radio’s license renewal applications.

Cox Radio is a party to various legal proceedings that are ordinary and incidental to its business. Management does not expect that any of these currently pending legal proceedings will have a material adverse impact on Cox Radio’s consolidated financial position, consolidated results of operations or cash flows.

5. Goodwill and Other Intangible Assets

Cox Radio accounts for goodwill and intangible assets in accordance with SFAS No. 142, which requires that goodwill and certain intangible assets, including FCC licenses, not be amortized but instead be tested for impairment at least annually, or more frequently if events or changes in circumstances indicate the asset might be impaired. Cox Radio’s annual impairment testing date is December 31st. However, based on deteriorating macro-economic factors, including declining radio industry revenues during the first half of 2008 and a weakening in prevailing radio station transaction multiples, Cox Radio concluded that, in connection with preparing its financial statements for the period ended June 30, 2008, an interim valuation pursuant to SFAS No. 142 was appropriate.

During the second quarter of 2008, Cox Radio performed a test for impairment and recorded an impairment charge of $131.9 million to reduce the carrying value of FCC licenses at the Greenville, Honolulu, Houston, Jacksonville, Louisville, Richmond, San Antonio and Southern Connecticut markets to their estimated fair value. Additionally, as a result of the impairment test, Cox Radio recorded a goodwill impairment charge of $15.7 million to reduce the carrying value of goodwill at the Miami, San Antonio and Tulsa markets to their estimated fair values. These impairments were necessary due to slowing radio market revenues and declining radio station transaction multiples. The following table reflects the components of intangible assets for the periods indicated:

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
	(Amounts in thousands)
September 30, 2008
FCC licenses and other intangible assets	$	1,524,071	$	602	$	1,523,469
Goodwill		197,131		—		197,131
December 31, 2007
FCC licenses and other intangible assets	$	1,593,120	$	578	$	1,592,542
Goodwill		211,608		—		211,608

Amortization was less than $0.1 million for each of the three-month periods ended September 30, 2008 and 2007.

On August 1, 2008, Cox Radio consummated the acquisition of six radio stations serving the Athens, Georgia market. The six stations - WNGC-FM, WGMG-FM, WPUP-FM, WGAU-AM, WRFC-AM and WXKT-FM – were acquired for approximately $60 million, less $12 million previously paid to the sellers. Of the $60 million purchase price, $54.7 million was allocated to FCC licenses, $1.3 million was allocated to other intangible assets and $1.3 million was allocated to goodwill.

In July 2008, Cox Radio completed a signal upgrade for WRKA-FM in Louisville, Kentucky and, in connection therewith, reclassified $6.8 million from other assets to FCC licenses.

6. Shareholders’ Equity

In August 2005, Cox Radio’s Board of Directors authorized a share repurchase program pursuant to which Cox Radio was authorized to repurchase up to $100 million of its outstanding shares of Class A common stock. Final purchases under this program were made in August 2007.

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In May 2007, the Board of Directors authorized a second share repurchase program pursuant to which Cox Radio was authorized to repurchase up to $100 million of its outstanding shares of Class A common stock. Final purchases under this program were made in April 2008.

In March 2008, the Executive Committee of Cox Radio’s Board of Directors authorized a third $100 million share repurchase program. The amount and timing of repurchases will be determined by management and repurchased shares will be held in treasury. The plan has no expiration date, and Cox Radio may commence, suspend or terminate repurchases without prior notice.

As of September 30, 2008, Cox Radio had purchased a combined total of 20.6 million shares of Class A common stock for an aggregate purchase price of approximately $256.5 million, including commissions and fees, at an average price of $12.44 per share. As of September 30, 2008, $43.5 million remained authorized as available to repurchase outstanding shares.

7. Stock-Based Compensation and Long-Term Incentive Plans

During the nine-month periods ended September 30, 2008 and 2007, Cox Radio accounted for two stock-based employee compensation plans, restricted stock and restricted stock units issued under the LTIP and the Employee Stock Purchase Plan (ESPP). Cox Radio accounted for these plans in accordance with SFAS No. 123R, which requires the measurement and recognition of compensation expense for all share-based payment awards based on estimated fair values. Awards of restricted stock and restricted stock units fully vest five years after the date of grant and are subject to a risk of forfeiture until the vesting date. Unlike standard restricted stock awards, no shares of common stock are issued upon the date of grant of restricted stock units. Instead, restricted stock units represent an agreement to issue Class A common stock upon vesting. The ESPP terminated during the second quarter of 2008, and 118,150 shares of Class A common stock were issued under the plan effective June 30, 2008.

For the three-month and nine-month periods ended September 30, 2008, compensation cost recognized in the income statement for stock-based compensation arrangements was $0.5 million and $3.3 million, respectively. The related income tax benefit for the three-month and nine-month periods ended September 30, 2008 was $0.2 million and $1.2 million, respectively. For the three-month and nine-month periods ended September 30, 2007, compensation cost recognized in the income statement for stock-based compensation arrangements was $0.4 million and $1.6 million, respectively. The related income tax benefit for the three-month and nine-month periods ended September 30, 2007 was $0.2 million and $0.6 million, respectively.

As of September 30, 2008, there was $5.0 million of total unrecognized compensation expense related to awards of restricted stock and restricted stock units. This expense is expected to be recognized over a weighted-average period of 3.3 years, as the awards vest. No shares of restricted stock were awarded under the LTIP during the three-month periods ended September 30, 2008 and 2007. During the three-month period ended September 30, 2008, 10,229 shares of restricted stock vested. No shares of restricted stock vested during the three-month period ended September 30, 2007.

There were no options exercised during the three-month periods ended September 30, 2008 and 2007. There were no options granted during the three-month periods ended September 30, 2008 and 2007.

During the nine-month periods ended September 30, 2008 and 2007, Cox Radio also accounted for awards of performance units, which are not a form of stock-based compensation under SFAS No. 123R. Compensation expense related to performance units is recognized over the vesting period based on the amount that is expected to be paid upon vesting of the awards. Performance units are issued under the LTIP and payouts, if any, are based on Cox Radio’s financial performance over a five-year period. During the second quarter of 2008, Cox Radio revalued its performance unit awards to reflect amounts ultimately expected to be paid out upon vesting, which resulted in a reversal of previously-accrued compensation expense to reflect updated expectations. For the three-month and nine-month periods ended September 30, 2008, compensation expense recognized in the income statement for performance units was $1.0 million and $(2.5) million, respectively, which includes the impact of this revaluation. For the three-month and nine-month periods ended September 30, 2007, compensation expense recognized in the income statement for performance units was $1.6 million and $4.4 million, respectively.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This report contains “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, among others, statements that relate to Cox Radio’s future plans, earnings, objectives, expectations, performance and similar projections, as well as any facts or assumptions underlying these statements or projections. Actual results may differ materially from the results expressed or implied in these forward-looking statements due to

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various risks, uncertainties or other factors. These factors include competition within the radio broadcasting industry, advertising demand in our markets, the possibility that advertisers may cancel or postpone schedules in response to political events, competition for audience share, and our ability to generate sufficient cash flow to meet our debt service obligations and finance operations. For a more detailed discussion of these and other risk factors, see the Risk Factors section of Cox Radio’s Annual Report on Form 10-K for the year ended December 31, 2007. Cox Radio assumes no responsibility to update any forward-looking statements as a result of new information, future events or otherwise.

General

Cox Radio is a leading national radio broadcasting company whose business is devoted to acquiring, developing and operating radio stations located throughout the United States. Cox Enterprises indirectly owns approximately 77% of the common stock of Cox Radio and has approximately 97% of the voting power of Cox Radio.

The primary source of Cox Radio’s revenues is the sale of local and national advertising to be broadcast on its radio stations. For the three-month periods ended September 30, 2008 and 2007, respectively, approximately 71% and 70% of Cox Radio’s net revenues were generated from local advertising. For the three-month periods ended September 30, 2008 and 2007, respectively, approximately 20% and 21% of Cox Radio’s net revenues were generated from national advertising. Cox Radio’s most significant station operating expenses are employees’ salaries and benefits, commissions, programming expenses and advertising and promotional expenditures.

Cox Radio’s revenues vary throughout the year. As is typical in the radio broadcasting industry, Cox Radio’s revenues and operating income are generally lowest in the first quarter. Cox Radio’s operating results in any period may be affected by the incurrence of advertising and promotional expenses that do not necessarily produce commensurate revenues until the impact of the advertising and promotion is realized in future periods.

Acquisitions and Dispositions

Historically, Cox Radio has actively managed its portfolio of radio stations through selected acquisitions, dispositions and exchanges, as well as through the use of local marketing agreements, or LMAs, and joint sales agreements, or JSAs. Under an LMA or a JSA, the company operating a station provides programming or sales and marketing or a combination of such services on behalf of the owner of a station. The broadcast revenues and operating expenses of stations operated by us under LMAs and JSAs have been included in Cox Radio’s operations since the respective effective dates of such agreements. All acquisitions discussed below have been accounted for using the purchase method. As such, the results of operations of the acquired stations have been included in the results of operations from the date of acquisition. Specific transactions entered into by Cox Radio during the past two years are described below.

On August 1, 2008, Cox Radio acquired six radio stations serving the Athens, Georgia market. The stations were acquired for an aggregate purchase price of approximately $60 million, of which $12 million had been previously paid to the sellers under an option agreement, and the remaining $48 million was funded with borrowings under our credit facility. The majority of the $60 million purchase price, adjusted for customary closing adjustments, was allocated to FCC licenses upon consummation of the transaction.

In September 2006, Cox Radio acquired WOKV-FM (formerly WBGB-FM), which serves the Jacksonville, Florida market, for a purchase price of approximately $7.7 million.

Results of Operations

Cox Radio’s results of operations represent the operations of the radio stations owned or operated by Cox Radio, or for which it provides sales and marketing services, during the applicable periods. The following discussion should be read in conjunction with the accompanying consolidated financial statements and the related notes included in this report.

Three months ended September 30, 2008 compared to three months ended September 30, 2007:

	September 30, 2008		September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Net revenues:
Local	$	74,549	$	77,227	$	(2,678	)	(3.5	)%
National		20,941		24,472		(3,531	)	(14.4	)%
Other		9,374		10,066		(692	)	(6.9	)%
Total net revenues	$	104,864	$	111,765	$	(6,901	)	(6.2	)%

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Net revenues are gross revenues less agency commissions. Local revenues are comprised of advertising sales made within a station’s local market or region either directly with the advertiser or through the advertiser’s agency. National revenues represent sales made to advertisers or agencies that are purchasing advertising for multiple markets; these sales are typically facilitated by our national representation firm, which serves as our sales agent in these transactions. Other revenues are comprised of Internet revenues, syndicated radio program revenues, network revenues and revenues from community events and sponsorships.

Net revenues for the third quarter of 2008 were $104.9 million, down 6.2% from the third quarter of 2007. Local revenues decreased 3.5%, national revenues decreased 14.4% and other revenues, which include Internet and other non-traditional revenues, decreased 6.9%, each as compared to the third quarter of 2007. Overall, revenues have declined relative to the prior year due to continued overall weakness in advertising. Our stations in Houston, Long Island, Birmingham, Tulsa and Louisville delivered revenue growth during the third quarter of 2008. Revenue growth at these stations was more than offset by results of our stations in Atlanta, Orlando, Miami, Southern Connecticut and Jacksonville, where net revenues were down for the quarter.

	September 30, 2008		September 30, 2007		$ Change		% Change
	(Amounts in thousands)
Cost of services (exclusive of depreciation and amortization shown below)	$	25,114	$	24,242	$	872	3.6	%

Cost of services is comprised of expenses incurred by our technical, news and programming departments. Cost of services increased $0.9 million, or 3.6% compared to the third quarter of 2007. This increase was primarily the result of additional costs associated with programming talent in our Atlanta and Tampa markets.

	September 30, 2008		September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Selling, general and administrative expenses	$	41,715	$	42,229	$	(514	)	(1.2	)%

Selling, general and administrative expenses are comprised of expenses incurred by our sales, promotion and general and administrative departments. These expenses decreased $0.5 million, or 1.2% when compared to the third quarter of 2007. For the third quarter of 2008, decreases in sales commissions and bonuses were partially offset by an increase in promotion expenses in our Atlanta and Louisville markets.

	September 30, 2008		September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Corporate general and administrative expenses	$	4,865	$	5,334	$	(469	)	(8.8	)%
Depreciation and amortization		2,584		2,741		(157	)	(5.7	)%
Other operating expense, net		73		81		(8	)	(9.9	)%

Corporate general and administrative expenses decreased $0.5 million, or 8.8% when compared to the third quarter of 2007. This decrease was attributable to a decrease in incentive compensation and legal accruals, as well as a reduction in compensation expense associated with performance units awarded to corporate employees under our Long-Term Incentive Plan (LTIP).

	September 30, 2008		September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Operating income	$	30,513	$	37,138	$	(6,625	)	(17.8	)%

Operating income for the third quarter of 2008 was $30.5 million compared to $37.1 million for the third quarter of 2007.

	September 30, 2008		September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Interest expense	$	3,214	$	5,044	$	(1,830	)	(36.3	)%

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Interest expense during the third quarter of 2008 decreased $1.8 million, or 36.3% when compared to the third quarter of 2007, due to a lower borrowing rate under our credit facility. The average interest rate on our credit facility was 3.1% during the third quarter of 2008 and 6.2% during the third quarter of 2007.

	September 30, 2008		September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Income tax expense:
Current	$	1,380	$	7,487	$	(6,107	)	(81.6	)%
Deferred		10,048		4,882		5,166		105.8	%
Total income tax expense	$	11,428	$	12,369	$	(941	)	(7.6	)%

Income tax expense decreased approximately $0.9 million to $11.4 million in the third quarter of 2008, as compared to the third quarter of 2007. This was attributable to a decrease in income before income taxes, offset in part by an increase in estimated effective state income tax rates. Our overall effective tax rate was 41.9% for the third quarter of 2008 and 38.0% for the third quarter of 2007.

	September 30, 2008		September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Net income	$	15,871	$	20,196	$	(4,325	)	(21.4	)%

Net income for the third quarter of 2008 was $15.9 million, a decrease of $4.3 million from the third quarter of 2007. This decrease was attributable to the various factors discussed above.

Nine months ended September 30, 2008 compared to nine months ended September 30, 2007:

	September 30, 2008		September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Net revenues:
Local	$	222,328	$	233,262	$	(10,934	)	(4.7	)%
National		61,646		70,204		(8,558	)	(12.2	)%
Other		26,920		27,054		(134	)	(0.5	)%
Total net revenues	$	310,894	$	330,520	$	(19,626	)	(5.9	)%

Net revenues for the first nine months of 2008 decreased $19.6 million, a 5.9% decrease compared to the first nine months of 2007. Local revenues decreased 4.7%, national revenues decreased 12.2% and other revenues decreased 0.5%, each as compared to the first nine months of 2007, due to overall weakness in the economy and the advertising market. Our stations in Houston, Long Island, Birmingham and Tulsa delivered revenue growth during the first nine months of 2008. Those increases were more than offset by results of our stations in Atlanta, Orlando, Miami, Tampa, Jacksonville and Richmond, where revenues were down for the first nine months of 2008.

	September 30, 2008		September 30, 2007		$ Change		% Change
	(Amounts in thousands)
Cost of services (exclusive of depreciation and amortization shown below)	$	71,217	$	69,825	$	1,392	2.0	%

Cost of services increased $1.4 million, or 2.0% over the first nine months of 2007. This increase was primarily the result of additional costs associated with programming talent.

	September 30, 2008		September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Selling, general and administrative expenses	$	123,714	$	132,626	$	(8,912	)	(6.7	)%

Selling, general and administrative expenses decreased $8.9 million, or 6.7% compared to the first nine months of 2007, due to decreased compensation expense associated with performance units awarded under our LTIP and a decline in sales commissions and bonuses.

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	September 30, 2008		September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Corporate general and administrative expenses	$	13,752	$	16,043	$	(2,291	)	(14.3	)%
Depreciation and amortization		7,922		8,467		(545	)	(6.4	)%
Impairment of intangible assets		147,633		—		147,633		100.0	%
Other operating expense, net		134		166		(32	)	(19.3	)%

Corporate general and administrative expenses decreased 14.3%, or $2.3 million compared to the third quarter of 2007, primarily due to a reduction in compensation expense associated with performance units awarded to corporate employees under our LTIP.

During the second quarter of 2008, we recorded a $147.6 million non-cash impairment charge ($96.8 million net of tax) to reduce the carrying value of intangible assets in our Greenville, Honolulu, Houston, Jacksonville, Louisville, Miami, Richmond, San Antonio, Southern Connecticut and Tulsa markets to their estimated fair values. The write-down was pursuant to Statement of Financial Accounting Standard (SFAS) No. 142, “Goodwill and Other Intangible Assets,” which requires that goodwill and certain intangible assets be tested for impairment at least annually, or more frequently if events or changes in circumstances indicate the assets might be impaired. In addition to the write-down during second quarter of 2008, we also recorded non-cash impairment charges during the years ended December 31, 2007 and 2006. Each of these impairments were necessary due to slowing radio market revenues and declining radio station transaction multiples. These trends have been experienced by other traditional media companies, including television and newspapers, as has been well documented in the financial press. Furthermore, these trends are not specific to any of our individual markets, but rather are affecting valuations in the industry as a whole, as evidenced not only by observed, industry-wide, private transaction multiples, but in public company valuations as well, both of which have undergone sustained, gradual declines in recent years. For more detail regarding the second quarter 2008 charge, see Note 5 to the unaudited consolidated financial statements included in this report.

	September 30, 2008			September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Operating (loss) income	$	(53,478	)	$	103,393	$	(156,871	)	*

* Change was not statistically meaningful

Our operating loss for the first nine months of 2008 was $53.5 million, compared to operating income of $103.4 million for the first nine months of 2007. This decline was primarily due to the $147.6 million non-cash impairment charge discussed above.

	September 30, 2008		September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Interest expense	$	10,114	$	16,119	$	(6,005	)	(37.3	)%

Interest expense during the first nine months of 2008 totaled $10.1 million, as compared to $16.1 million for the first nine months of 2007. This decrease was primarily attributable to a lower borrowing rate under our credit facility. The average rate on our credit facility was 3.6% during the first nine months of 2008 and 6.1% during the first nine months of 2007.

	September 30, 2008			September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Income tax expense (benefit):
Current	$	13,308		$	21,142	$	(7,834	)	(37.1	)%
Deferred		(30,196	)		12,940		(43,136	)	*
Total income tax (benefit) expense	$	(16,888	)	$	34,082	$	(50,970	)	*

* Change was not statistically meaningful

Income tax expense decreased to a net income tax benefit of $16.9 million in the first nine months of 2008, as compared to the first nine months of 2007, due primarily to the non-cash impairment charge discussed above. Our effective tax rate for the first nine months of 2008 and 2007 was 26.6% and 38.7%, respectively.

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	September 30, 2008			September 30, 2007		$ Change			% Change
	(Amounts in thousands)
Net (loss) income	$	(46,677	)	$	53,983	$	(100,660	)	*

* Change was not statistically meaningful

Our net loss for the first nine months of 2008 was $46.7 million, compared to net income of $54.0 million for the first nine months of 2007, due to lower revenues and the non-cash impairment charge recognized in the second quarter of 2008.

Liquidity and Capital Resources

Sources and Uses of Liquidity

Primary sources of liquidity are cash provided by operations and cash borrowed under our bank credit facility. Primary uses of liquidity include debt service, acquisitions, capital expenditures, common stock repurchases and investments in signal upgrades.

Net cash provided by operating activities for the nine months ended September 30, 2008 was $80.5 million, as compared to $79.7 million for the nine months ended September 30, 2007. Changes in working capital resulted in a $1.8 million net use of cash for the nine months ended September 30, 2008, as compared to a $3.9 million net use of cash for the nine months ended September 30, 2007. These working capital changes are the result of routine timing differences between the receipt and payment of cash. Cox Radio expects future net cash provided by operating activities to provide sufficient funding for operations in the foreseeable future.

Net cash used in investing activities was $61.5 million for the nine months ended September 30, 2008, an increase of $49.3 million over the nine months ended September 30, 2007. This increase was primarily due to the acquisition of six radio stations serving the Athens, Georgia market, which closed on August 1, 2008.

Net cash used in financing activities was $19.1 million for the nine months ended September 30, 2008, a decrease of $49.2 million from the nine months ended September 30, 2007. During the nine months ended September 30, 2008, we used $104.1 million to repurchase shares of our Class A common stock, as compared to $28.4 million during the nine months ended September 30, 2007. See Item 2 in Part II of this report for more information regarding our stock repurchase programs. Financing activities also included $95 million of net borrowings under our revolving credit facility for the first nine months of 2008, as compared to net repayments of $50 million in the comparable 2007 period.

Cox Radio has an effective shelf registration statement under which Cox Radio may from time to time offer and issue debentures, notes, bonds and other indebtedness and forward contracts in respect of any such indebtedness, shares of preferred stock, shares of Class A common stock, warrants, stock purchase contracts, stock purchase units and stock purchase rights, and two financing trusts sponsored by Cox Radio may also offer and issue preferred securities of the trusts for an original maximum aggregate offering amount of up to $300 million. Under SEC rules, Cox Radio’s shelf registration statement will expire on December 1, 2008, unless Cox Radio files a new registration statement prior to such expiration date. Cox Radio does not expect to file a new registration statement prior to December 1, 2008, nor does Cox Radio expect to offer or sell any securities under its shelf registration statement prior to expiration.

In addition, daily cash management needs have been funded through intercompany advances from Cox Enterprises. Any borrowings from Cox Enterprises are due on demand, but typically repaid within 30 days. Cox Enterprises continues to perform day-to-day cash management services for Cox Radio. Amounts due to and from Cox Enterprises accrue interest at Cox Enterprises’ current commercial paper borrowing rate or a London Interbank Offered Rate (LIBOR) based rate (3.1% at September 30, 2008 and 6.0% at December 31, 2007) dependent upon Cox Radio’s credit rating. Cox Radio owed Cox Enterprises approximately $5.5 million at September 30, 2008 and $16.6 million at December 31, 2007.

Future cash requirements are expected to include capital expenditures, principal and interest payments on indebtedness and funds for acquisitions. Cox Radio expects its operations to generate sufficient cash to meet its capital expenditures and debt service requirements. Additional cash requirements, including funds for acquisitions, will be funded from various sources, including proceeds from bank financing, intercompany advances from Cox Enterprises and, if or when appropriate, issuances of securities.

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Debt Service

In July 2006, Cox Radio entered into a $600 million five-year unsecured revolving credit facility. The interest rate for the facility is, at Cox Radio’s option:

• the greater of the prime rate or the federal funds borrowing rate plus 0.5%;

• LIBOR plus a spread based on the credit ratings of Cox Radio’s senior unsecured long-term debt; or

• the federal funds borrowing rate plus a spread based on the credit ratings of Cox Radio’s senior unsecured long-term debt.

The credit facility includes commitment fees on the unused portion of the total amount available, which fees range from 0.070% to 0.225% depending on the credit rating of Cox Radio’s senior secured long-term debt. The credit facility contains, among other provisions, specified leverage and interest coverage requirements, the terms of which are defined within the credit facility. At September 30, 2008, Cox Radio was in compliance with these covenants. The credit facility also contains customary events of default, including, but not limited to, failure to pay principal or interest, failure to pay or acceleration of other material debt, misrepresentation or breach of warranty, violation of certain covenants and change of control.

At September 30, 2008, Cox Radio had $415 million of outstanding indebtedness under the credit facility with $185 million available for borrowing. The interest rate applied to amounts due under the credit facility was 3.1% at September 30, 2008. At December 31, 2007, Cox Radio had $320 million of outstanding indebtedness under the credit facility with $280 million available for borrowing. The interest rate applied to amounts due under the facility was 5.7% at December 31, 2007. Since the interest rate under the credit facility is variable, the recorded balance of the credit facility approximates fair value.

On September 15, 2008, Lehman Brothers Holdings Inc. (Lehman) filed for protection under Chapter 11 of the federal Bankruptcy Code in the United States Bankruptcy Court in the Southern District of New York. A Lehman subsidiary is a lender under the Cox Radio credit facility, and at September 30, 2008, the Lehman subsidiary had an unfunded commitment under the credit facility of approximately $5.0 million. Cox Radio believes the Lehman bankruptcy and its potential impact on subsidiaries of Lehman will not have a material adverse effect on Cox Radio.

Off-Balance Sheet Arrangements

Cox Radio’s off-balance sheet arrangements consist primarily of lease commitments and contracts for sports programming and on-air personalities and the guarantee discussed below. Cox Radio does not have any majority-owned subsidiaries that are not included in its consolidated financial statements, nor does Cox Radio have any interests in or relationships with any variable interest entities.

In February 2005, Cox Radio agreed to guarantee the borrowings of a third party up to $5 million to enable that party to purchase two stations and assist Cox Radio in a signal upgrade project for one of its stations. In August 2007, Cox Radio amended this agreement to increase the guarantee to up to $6 million and to extend the expiration to June 2009. If the Cox Radio signal upgrade is approved by the FCC, then Cox Radio is likely to purchase the stations and performance under the guarantee will not be necessary. If the signal upgrade is not approved, Cox Radio’s guarantee will be extinguished either through sale of the stations or through new financing arranged by the owner of the stations. Cox Radio believes that while the value of the stations currently may be insufficient to repay the outstanding debt in full, any shortfall would be immaterial. At September 30, 2008 and December 31, 2007, the carrying value of this guarantee was $0.7 million and $0.6 million, respectively.

Impact of Inflation

The impact of inflation on our operations has not been significant to date. However, there can be no assurance that a high rate of inflation in the future would not have an adverse impact on our operating results.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Cox Radio is exposed to a number of financial market risks in the ordinary course of business. Cox Radio has examined exposures to these risks and concluded that none of the exposures are material to cash flows or earnings; however, Cox Radio’s primary financial market risk exposure pertains to changes in interest rates. Cox Radio has historically engaged in several strategies to manage these market risks.

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The estimated fair values of debt instruments are based on discounted cash flow analyses using Cox Radio’s borrowing rates for similar types of borrowing arrangements and dealer quotations. The revolving credit facility and borrowings from Cox Enterprises bear interest based on current market rates and, thus, approximate fair value. Cox Radio is exposed to interest rate volatility with respect to variable rate debt instruments. If the LIBOR borrowing rates were to increase 1% above the rates at September 30, 2008, Cox Radio’s interest expense on the revolving credit facility would increase by approximately $4.2 million on an annual basis.

ITEM 4. Controls and Procedures

Evaluation of Controls and Procedures

The Chief Executive Officer and the Chief Financial Officer of Cox Radio (its principal executive officer and principal financial officer, respectively) have concluded, based on their evaluation as of September 30, 2008, the end of the fiscal quarter to which this report relates, that Cox Radio’s disclosure controls and procedures: are effective to ensure that information required to be disclosed by Cox Radio in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and include controls and procedures designed to ensure that information required to be disclosed by Cox Radio in such reports is accumulated and communicated to Cox Radio’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Cox Radio’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching Cox Radio’s desired disclosure objectives and are effective in reaching that level of reasonable assurance.

Changes in Internal Controls

There were no changes in Cox Radio’s internal control over financial reporting during the period covered by this report that materially affected, or were reasonably likely to materially affect, Cox Radio’s internal control over financial reporting.

PART II - - OTHER INFORMATION

ITEM 1. Legal Proceedings

Cox Radio is a party to various legal proceedings that are ordinary and incidental to its business. Management does not expect that any of these legal proceedings currently pending will have a material adverse impact on Cox Radio’s consolidated financial position, consolidated results of operations or cash flows.

ITEM 1A. Risk Factors

We have included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2007, a description of certain risks and uncertainties that could affect our business, future performance or financial condition (the Risk Factors). There have been no material changes to the Risk Factors. Investors should consider the Risk Factors prior to making an investment decision with respect to our Class A common stock.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) None.

(b) None.

(c) During the third quarter of 2008, Cox Radio had one share repurchase program pursuant to which shares of its Class A common stock could be repurchased in the open market or through privately negotiated transactions, with the amount and timing of repurchases to be determined by the company’s management. This program was authorized in March 2008. Repurchased shares are held in treasury, and the program has no expiration date. Cox Radio may commence, suspend or terminate repurchases without prior notice, depending on market conditions and various other factors.

The following table sets forth certain information concerning the repurchase of Cox Radio’s Class A common stock during the three-month period ended September 30, 2008.

19

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1, 2008 to July 31, 2008	1,984,167	$	10.24	1,982,400	$	69.7 million
August 1, 2008 to August 31, 2008	972,100	$	10.99	972,100	$	59.0 million
September 1, 2008 to September 30, 2008	1,422,847	$	10.88	1,422,700	$	43.5 million

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

Listed below are the exhibits, which are filed as part of this report (according to the number assigned to them in Item 601 of Regulation S-K):

Exhibit Number		Description
(1) 2.1	—	Asset Purchase Agreement, dated as of February 4, 2008, by and among Cox Radio, Inc., Southern Broadcasting of Athens, Inc., Southern Broadcasting of Pensacola, Inc., New Broadcast Investment Properties, Inc. and Southern Broadcasting Companies, Inc.
(2) 3.1	—	Amended and Restated Certificate of Incorporation of Cox Radio, Inc.
(3) 3.2	—	Certificate of Amendment to Certificate of Incorporation of Cox Radio, Inc.
(4) 3.3	—	Amended and Restated Bylaws of Cox Radio, Inc.
(5) 4.1	—	Form of Specimen Class A common stock certificate.
(6) 10.1	—	Credit Agreement, dated as of July 26, 2006, by and among Cox Radio, Inc., the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders, Lehman Brothers Inc. and Citibank, N.A., as Syndication Agents, Wachovia Capital Markets, LLC and Bank of Tokyo-Mitsubishi UFJ Trust Company, as Documentation Agents and J.P. Morgan Securities Inc., Lehman Brothers Inc. and Citigroup Global Markets Inc., as Joint Lead Arranger and Joint Bookrunners.
31.1	—	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
31.2	—	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
32.1	—	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934.

20

(1) Incorporated by reference to Exhibit 2.1 of Cox Radio’s Form 8-K dated February 4, 2008 and filed February 6, 2008.

(2) Incorporated by reference to the corresponding exhibit of Cox Radio’s Registration Statement on Form S-1 (SEC File No. 333-08737).

(3) Incorporated by reference to Exhibit 3.2 of Cox Radio’s Form 8-A/A filed February 15, 2002.

(4) Incorporated by reference to Exhibit 3.2 of Cox Radio’s Registration Statement on Form S-1 (SEC File No. 333-08737).

(5) Incorporated by reference to Exhibit 4.1 of Cox Radio’s Form 8-A/A filed February 15, 2002.

(6) Incorporated by reference to Exhibit 10.1 of Cox Radio’s Form 8-K dated July 26, 2006 and filed July 31, 2006.

21

SIGNATURES

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.

	Cox Radio, Inc.
November 7, 2008	/s/ Neil O. Johnston
	Neil O. Johnston
	Vice President and Chief Financial
	Officer (Principal Financial Officer,
	Principal Accounting Officer and
	duly authorized officer)

22

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

I, Robert F. Neil, Chief Executive Officer of Cox Radio, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cox Radio, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2008

/s/ Robert F. Neil

Robert F. Neil

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

I, Neil O. Johnston, Chief Financial Officer of Cox Radio, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cox Radio, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2008

/s/ Neil O. Johnston

Neil O. Johnston

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(b) OF THE SECURITIES EXCHANGE ACT OF 1934

In connection with the quarterly report on Form 10-Q of Cox Radio, Inc. (the “Company”) for the period ended September 30, 2008 as filed with the Securities and Exchange Commission as of the date hereof, I, Robert F. Neil, Chief Executive Officer of the Company, and I, Neil O. Johnston, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, that to the best of our knowledge:

(1) the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Robert F. Neil
Name:	Robert F. Neil
Title:	Chief Executive Officer
Date:	November 7, 2008
	/s/ Neil O. Johnston
Name:	Neil O. Johnston
Title:	Chief Financial Officer
Date:	November 7, 2008

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act, or other documentation authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 of the Sarbanes-Oxley Act, has been provided to Cox Radio and will be retained by Cox Radio and furnished to the Securities and Exchange Commission or its staff upon request.

This certification “accompanies” the Report, is not deemed filed with the Securities and Exchange Commission, and is not to be incorporated by reference into any filing of Cox Radio under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report, irrespective of an general incorporation language contained in such filing).