13. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

The Company conducts a portion of its business through its subsidiaries. All of the Company’s Subsidiary Guarantors have fully and unconditionally guaranteed the Company’s 6⅜% Senior Subordinated Notes due February 2013, the 12½%/15% Senior Subordinated Notes due May 2016, and the Company’s obligations under the 2011 Credit Agreement.

Set forth below are consolidated balance sheets for the Company and the Subsidiary Guarantors as of September 30, 2011 and December 31, 2010, and related consolidated statements of operations and cash flows for each of the three and nine months ended September 30, 2011 and 2010. The equity method of accounting has been used by the Company to report its investments in subsidiaries. Separate financial statements for the Subsidiary Guarantors are not presented based on management’s determination that they do not provide additional information that is material to investors.

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF OPERATIONS

Three Months Ended September 30, 2011

	Combined
	Guarantor		Radio
	Subsidiaries		One, Inc.			Eliminations			Consolidated
	(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
	(In thousands)

NET REVENUE	$	35,403	$	69,042		$	—		$	104,445
OPERATING EXPENSES:
Programming and technical		7,995		24,747			—			32,742
Selling, general and administrative, including stock-based compensation		14,531		21,504			—			36,035
Corporate selling, general and administrative, including stock-based compensation		—		11,044			—			11,044
Depreciation and amortization		1,930		9,574			—			11,504
Total operating expenses		24,456		66,869			—			91,325
Operating income		10,947		2,173			—			13, 120
INTEREST INCOME		—		103			—			103
INTEREST EXPENSE		—		22,973			—			22,973
OTHER (INCOME) EXPENSE, net		—		(19	)		—			(19	)
Income (loss) before benefit from income taxes, noncontrolling interests in income of subsidiaries and discontinued operations		10,947		(20,678	)		—			(9,731	)
BENEFIT FROM INCOME TAXES		—		(2,325	)		—			(2,325	)
Net income (loss) before equity in income of subsidiaries and discontinued operations		10,947		(18,353	)		—			(7,406	)
EQUITY IN INCOME OF SUBSIDIARIES		—		10,959			(10,959	)		—
Net income (loss) from continuing operations		10,947		(7,394	)		(10,959	)		(7,406	)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax		12		(1	)		—			11
CONSOLIDATED NET INCOME (LOSS)		10,959		(7,395	)		(10,959	)		(7,395	)
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		—		2,483			—			2,483
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	10,959	$	(9,878	)	$	(10,959	)	$	(9,878	)

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF OPERATIONS

Three Months Ended September 30, 2010

	Combined
	Guarantor			Radio
	Subsidiaries			One, Inc.			Eliminations			Consolidated
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	(As Adjusted - See Note 1)
	(In thousands)

NET REVENUE	$	35,479		$	38,951		$	—		$	74,430
OPERATING EXPENSES:
Programming and technical		8,582			10,180			—			18,762
Selling, general and administrative, including stock-based compensation		15,283			12,204			—			27,487
Corporate selling, general and administrative, including stock-based compensation		—			6,245			—			6,245
Depreciation and amortization		2,421			2,189			—			4,610
Total operating expenses		26,286			30,818			—			57,104
Operating income		9,193			8,133			—			17,326
INTEREST INCOME		—			28			—			28
INTEREST EXPENSE		—			12,122			—			12,122
EQUITY IN INCOME OF AFFILIATED COMPANY		—			1,784			—			1,784
OTHER (INCOME) EXPENSE, net		(1	)		51			—			50
Income (loss) before provision for income taxes, noncontrolling interests in income of subsidiaries and discontinued operations		9,194			(2,228	)		—			6,966
PROVISION FOR INCOME TAXES		—			4,760			—			4,760
Net income (loss) before equity in income of subsidiaries and discontinued operations		9,194			(6,988	)		—			2,206
EQUITY IN INCOME OF SUBSIDIARIES		—			9,068			(9,068	)		—
Net income (loss) from continuing operations		9,194			2,080			(9,068	)		2,206
LOSS FROM DISCONTINUED OPERATIONS, net of tax		(126	)		(32	)		—			(158	)
CONSOLIDATED NET INCOME (LOSS)		9,068			2,048			(9,068	)		2,048
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		—			1,010			—			1,010
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	9,068		$	1,038		$	(9,068	)	$	1,038

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF OPERATIONS

Nine Months Ended September 30, 2011

	Combined Guarantor Subsidiaries			Radio One, Inc.			Eliminations			Consolidated
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	(In thousands)

NET REVENUE	$	97,241		$	169,275		$	—		$	266,516
OPERATING EXPENSES:
Programming and technical		24,191			58,100			—			82,291
Selling, general and administrative, including stock-based compensation		40,419			55,917			—			96,336
Corporate selling, general and administrative, including stock-based compensation		—			27,576			—			27,576
Depreciation and amortization		6,140			19,685			—			25,825
Total operating expenses		70,750			161,278			—			232,028
Operating income		26,491			7,997			—			34,488
INTEREST INCOME		—			120			—			120
INTEREST EXPENSE		—			65,222			—			65,222
GAIN ON INVESTMENT IN AFFILIATED COMPANY		—			146,879			—			146,879
EQUITY IN INCOME OF AFFILIATED COMPANY		—			3,287			—			3,287
LOSS ON RETIREMENT OF DEBT		—			7,743			—			7,743
OTHER EXPENSE, NET		—			3			—			3
Income before provision for income taxes, noncontrolling interests in income of subsidiaries and discontinued operations		26,491			85,315			—			111,806
PROVISION FOR INCOME TAXES		—			81,905			—			81,905
Net income before equity in income of subsidiaries and discontinued operations		26,491			3,410			—			29,901
EQUITY IN INCOME OF SUBSIDIARIES		—			26,421			(26,421	)		—
Net income (loss) from continuing operations		26,491			29,831			(26,421	)		29,901
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, net of tax		(70	)		(1	)		—			(71	)
CONSOLIDATED NET INCOME (LOSS)		26,421			29,830			(26,421	)		29,830
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		—			5,403			—			5,403
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	26,421		$	24,427		$	(26,421	)	$	24,427

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF OPERATIONS

Nine Months Ended September 30, 2010

	Combined Guarantor Subsidiaries			Radio One, Inc.			Eliminations			Consolidated
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	(As Adjusted - See Note 1)
	(In thousands)

NET REVENUE	$	99,804		$	108,753		$	—		$	208,557
OPERATING EXPENSES:
Programming and technical		25,666			30,926			—			56,592
Selling, general and administrative, including stock-based compensation		44,145			34,071			—			78,216
Corporate selling, general and administrative, including stock-based compensation		—			24,581			—			24,581
Depreciation and amortization		7,560			6,596			—			14,156
Total operating expenses		77,371			96,174			—			173,545
Operating income		22,433			12,579			—			35,012
INTEREST INCOME		—			95			—			95
INTEREST EXPENSE		—			31,059			—			31,059
EQUITY IN INCOME OF AFFILIATED COMPANY		—			3,832			—			3,832
OTHER (INCOME) EXPENSE, NET		(115	)		3,049			—			2,934
Income (loss) before provision for income taxes, noncontrolling interests in income of subsidiaries and discontinued operations		22,548			(17,602	)		—			4,946
PROVISION FOR INCOME TAXES		—			4,685			—			4,685
Net income (loss) before equity in income of subsidiaries and discontinued operations		22,548			(22,287	)		—			261
EQUITY IN INCOME OF SUBSIDIARIES		—			22,433			(22,433	)		—
Net income (loss) from continuing operations		22,548			146			(22,433	)		261
LOSS FROM DISCONTINUED OPERATIONS, net of tax		(115	)		(201	)		—			(316	)
CONSOLIDATED NET INCOME (LOSS)		22,433			(55	)		(22,433	)		(55	)
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		—			1,427			—			1,427
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	22,433		$	(1,482	)	$	(22,433	)	$	(1,482	)

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING BALANCE SHEETS

As of September 30, 2011

	Combined
	Guarantor			Radio One,
	Subsidiaries			Inc.			Eliminations			Consolidated
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	(In thousands)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	132		$	33,039		$	—		$	33,171
Short-term investments		—			903			—			903
Trade accounts receivable, net of allowance for doubtful accounts		31,225			55,059			—			86,284
Prepaid expenses and other current assets		996			6,220			—			7,216
Current portion of content assets		—			31,288			—			31,288
Current assets from discontinued operations		(24	)		129			—			105
Total current assets		32,329			126,638			—			158,967
PREPAID PROGRAMMING AND DEPOSITS		—			4,140			—			4,140
PROPERTY AND EQUIPMENT, net		17,458			15,287			—			32,745
INTANGIBLE ASSETS, net		566,215			712,041			—			1,278,256
CONTENT ASSETS, net		—			33,024			—			33,024
LONG-TERM INVESTMENTS		—			9,096			—			9,096
INVESTMENT IN SUBSIDIARIES		—			605,064			(605,064	)		—
OTHER ASSETS		271			3,029			—			3,300
NON-CURRENT ASSETS FROM DISCONTINUED OPERATIONS		1,493			—			—			1,493
Total assets	$	617,766		$	1,508,319		$	(605,064	)	$	1,521,021

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

CURRENT LIABILITIES:
Accounts payable	$	1,002		$	6,280		$	—		$	7,282
Accrued interest		—			6,479			—			6,479
Accrued compensation and related benefits		1,876			9,136			—			11,012
Current portion of content payables		—			22,764			—			22,764
Income taxes payable		—			2,274			—			2,274
Other current liabilities		8,354			2,074			—			10,428
Current portion of long-term debt		—			4,860			—			4,860
Current liabilities from discontinued operations		57			30			—			87
Total current liabilities		11,289			53,897			—			65,186
LONG-TERM DEBT, net of current portion and original issue discount		—			798,795			—			798,795
CONTENT PAYABLES, net of current portion		—			16,645			—			16,645
OTHER LONG-TERM LIABILITIES		1,382			18,169			—			19,551
DEFERRED TAX LIABILITIES		—			169,307			—			169,307
NON-CURRENT LIABILITIES FROM DISCONTINUED OPERATIONS		31			—			—			31
Total liabilities		12,702			1,056,813			—			1,069,515

REDEEMABLE NONCONTROLLING INTERESTS		—			29,711			—			29,711

STOCKHOLDERS’ EQUITY:
Common stock		—			51			—			51
Accumulated other comprehensive income		—			(164	)		—			(164	)
Additional paid-in capital		206,959			990,656			(206,959	)		990,656
Retained earnings (accumulated deficit)		398,105			(774,618	)		(398,105	)		(774,618	)
Total stockholders’ equity		605,064			215,925			(605,064	)		215,925
Noncontrolling interest		—			205,870			—			205,870
Total Equity		605,064			421,795			(605,064	)		421,795
Total liabilities, redeemable noncontrolling interests and equity	$	617,766		$	1,508,319		$	(605,064	)	$	1,521,021

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING BALANCE SHEETS

As of December 31, 2010

	Combined
	Guarantor		Radio One,
	Subsidiaries		Inc.			Eliminations			Consolidated
	(As Adjusted - See Note 1)
	(In thousands)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,043	$	8,149		$	—		$	9,192
Trade accounts receivable, net of allowance for doubtful accounts		30,427		28,000			—			58,427
Prepaid expenses and other current assets		1,323		7,050			—			8,373
Current assets from discontinued operations		31		128			—			159
Total current assets		32,824		43,327			—			76,151
PROPERTY AND EQUIPMENT, net		19,392		13,649			—			33,041
INTANGIBLE ASSETS, net		567,600		271,345			—			838,945
INVESTMENT IN SUBSIDIARIES		—		609,199			(609,199	)		—
INVESTMENT IN AFFILIATED COMPANY		—		47,470			—			47,470
OTHER ASSETS		497		1,484			—			1,981
NON-CURRENT ASSESTS FROM DISCONTINUED OPERATIONS		1,624		—			—			1,624
Total assets	$	621,937	$	986,474		$	(609,199	)	$	999,212

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable	$	411	$	2,598		$	—		$	3,009
Accrued interest		—		4,558			—			4,558
Accrued compensation and related benefits		2,332		8,389			—			10,721
Income taxes payable		—		1,671			—			1,671
Other current liabilities		8,383		3,321			—			11,704
Current portion of long-term debt		—		18,402			—			18,402
Current liabilities from discontinued operations		44		(10	)		—			34
Total current liabilities		11,170		38,929			—			50,099
LONG-TERM DEBT, net of current portion		—		623,820			—			623,820
OTHER LONG-TERM LIABILITIES		1,531		9,363			—			10,894
DEFERRED TAX LIABILITIES		—		89,392			—			89,392
NON-CURRENT LIABILITIES FROM DISCONTINUED OPERATIONS		37		—			—			37
Total liabilities		12,738		761,504			—			774,242

REDEEMABLE NONCONTROLLING INTERESTS		—		30,635			—			30,635

STOCKHOLDERS’ EQUITY:
Common stock		—		54			—			54
Accumulated comprehensive income adjustments		—		(1,424	)		—			(1,424	)
Additional paid-in capital		237,515		994,750			(237,515	)		994,750
Retained earnings (accumulated deficit)		371,684		(799,045	)		(371,684	)		(799,045	)
Total stockholders’ equity		609,199		194,335			(609,199	)		194,335
Total liabilities, redeemable noncontrolling interests and stockholders' equity	$	621,937	$	986,474		$	(609,199	)	$	999,212

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2011

	Combined
	Guarantor			Radio
	Subsidiaries			One, Inc.			Eliminations			Consolidated
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	(In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income (loss)	$	26,421		$	29,830		$	(26,421	)	$	29,830
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization		6,140			19,685			—			25,825
Amortization of debt financing costs		—			3,040			—			3,040
Amortization of content assets		—			20,564			—			20,564
Deferred income taxes		—			79,937			—			79,937
Gain on investment in affiliated company		—			(146,879	)		—			(146,879	)
Equity in income of affiliated company		—			(3,287	)		—			(3,287	)
Stock-based compensation and other non-cash compensation		—			2,895			—			2,895
Non-cash interest		—			19,123			—			19,123
Loss on retirement of debt		—			7,743			—			7,743
Effect of change in operating assets and liabilities, net of assets acquired:
Trade accounts receivable, net		(798	)		(27,059	)		—			(27,857	)
Prepaid expenses and other current assets		327			830			—			1,157
Other assets		226			3,176			—			3,402
Accounts payable		591			3,680			—			4,271
Due to corporate/from subsidiaries		(33,184	)		33,184			—			—
Accrued interest		—			1,921			—			1,921
Accrued compensation and related benefits		(456	)		748			—			292
Income taxes payable		—			603			—			603
Other liabilities		(178	)		6,419			—			6,241
Net cash flows provided by operating activities from discontinued operations		—			290			—			290
Net cash flows (used in) provided by operating activities		(911	)		56,443			(26,421	)		29,111
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		—			(5,410	)		—			(5,410	)
Net cash and investments acquired in connection with TV One consolidation		—			65,245			—			65,245
Investment in subsidiaries		—			(26,421	)		26,421			—
Purchase of other intangible assets		—			(12,761	)		—			(12,761	)
Net cash flows provided by investing activities		—			20,653			26,421			47,074
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facility		—			378,280			—			378,280
Repayment of credit facility		—			(355,611	)		—			(355,611	)
Debt refinancing and modification costs		—			(6,197	)		—			(6,197	)
Repurchase of noncontrolling interest		—			(54,595	)		—			(54,595	)
Proceeds from noncontrolling interest member		—			2,776			—			2,776
Payment of dividends to noncontrolling interest shareholders of Reach Media		—			(933	)		—			(933	)
Payment of dividends to noncontrolling interest members of TV One		—			(7,410	)		—			(7,410	)
Repurchase of common stock		—			(8,516	)		—			(8,516	)
Net cash flows used in financing activities		—			(52,206	)		—			(52,206	)
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(911	)		24,890			—			23,979
CASH AND CASH EQUIVALENTS, beginning of period		1,043			8,149			—			9,192
CASH AND CASH EQUIVALENTS, end of period	$	132		$	33,039		$	—		$	33,171

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2010

	Combined
	Guarantor			Radio
	Subsidiaries			One, Inc.			Eliminations			Consolidated
	(Unaudited) (Unaudited) (Unaudited) (Unaudited)
	(As Adjusted - See Note 1)
	(In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income (loss)	$	22,433		$	(55	)	$	(22,433	)	$	(55	)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization		7,560			6,596			—			14,156
Amortization of debt financing costs		—			1,694			—			1,694
Write off of debt financing costs		—			3,055			—			3,055
Deferred income taxes		—			2,611			—			2,611
Equity in income of affiliated company		—			(3,832	)		—			(3,832	)
Stock-based compensation and other non-cash compensation		—			4,877			—			4,877
Effect of change in operating assets and liabilities, net of assets acquired:
Trade accounts receivable, net		(2,517	)		(11,291	)		—			(13,808	)
Prepaid expenses and other current assets		(171	)		374			—			203
Other assets		182			6,684			—			6,866
Accounts payable		(285	)		(1,541	)		—			(1,826	)
Due to corporate/from subsidiaries		(22,982	)		22,982			—			—
Accrued interest		—			856			—			856
Accrued compensation and related benefits		259			1,575			—			1,834
Income taxes payable		—			911			—			911
Other liabilities		111			(470	)		—			(359	)
Net cash flows used in operating activities from discontinued operations		(64	)		(344	)		—			(408	)
Net cash flows provided by (used in) operating activities		4,526			34,682			(22,433	)		16,775
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(2,608	)		(643	)		—			(3,251	)
Investment in subsidiaries		—			(22,433	)		22,433			—
Purchase of other intangible assets		—			(341	)		—			(341	)
Net cash flows (used in) provided by investing activities		(2,608	)		(23,417	)		22,433			(3,592	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facility		—			12,000			—			12,000
Repayment of credit facility		—			(12,396	)		—			(12,396	)
Debt refinancing and modification costs		—			(11,179	)		—			(11,179	)
Net cash flows used in financing activities		—			(11,575	)		—			(11,575	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,918			(310	)		—			1,608
CASH AND CASH EQUIVALENTS, beginning of period		127			19,836			—			19,963
CASH AND CASH EQUIVALENTS, end of period	$	2,045		$	19,526		$	—		$	21,571