Turn on the Radio. Every day millions of people do just that. They turn to their favorite station for news, a familiar song or stimulating talk. It's no wonder local and national advertisers also turn to radio as a powerful, targeted brand-building tool.
For Cox Radio shareholders, it is this affinity for radio and the ratings leadership of so many of our stations that makes our organization an appealing investment. Our operations generate substantial cash flow, giving us the ability to grow our company when appropriate opportunities arise, pay down debt, as well as return capital to shareholders through the repurchase of our common stock. In fact, during 2007, we generated a record $123 million in cash flows from operating activities, an increase of 12% over 2006. How did we deploy that cash? During 2007, we continued to strengthen our balance sheet by reducing outstanding debt by $41 million and returned $68 million to shareholders through the repurchase of our common stock.
In mid-January 2008, we exercised our option to purchase radio stations serving the Athens, Georgia market. This cluster of stations is strong and profitable. Moreover, it will allow us to enhance our presence in the Southeast and specifically in Georgia. The location of these stations in the fast-growing corridor between Atlanta and Greenville is a great strategic fit for Cox Radio due to our existing presence in both of these markets.
We're About Listening
While each day we want people to turn on the radio and listen, we believe that it's critical to our business that we also listen ... to our audiences and to our advertisers. That's why we commissioned Bernett Research to conduct a nationwide survey to understand just what these important groups want. We heard our advertisers say that they want to work with the most informed marketing professionals. That's why we focus on hiring, training and retaining the best sales talent in the industry. And because advertisers continue to tell us they want the best product environment for their messages, our stations continue to give our listeners more of the content they want with fewer interruptions. Finally, we listened when our advertisers said they expected the best advertising solutions to reach their customers across multiple platforms. Our response is customized marketing solutions that meet the needs of individual advertisers and give each client the best results.....whether on air, on site, or online. In short, because we're about listening, Cox Radio is committed to continuing our unique formula:
Best People
+ Best Product Environment
+ Best Solutions
= Best Results
This formula reflects the dedication to operational excellence and customer focus that has been part of Cox Radio since our inception. Our stations adhere to an operating philosophy that is focused on delivering quality programming in an uncluttered environment. Unwavering commitment to this strategy has contributed to Cox Radio's historical industry-leading ratings performance and bodes well for us as the industry moves toward electronic measurement.
We're About Radio
The past year has been challenging for everyone in the media business, and I want to thank our employees who have concentrated on keeping our performance exemplary. I also want to thank Paul Hughes, who retired from our Board of Directors at the end of 2007, for his long tenure and excellent guidance. In 2007, we were pleased to welcome Nick Evans, Jr. to our Board. He is a broadcast veteran whose expertise will further expand our Board's capabilities. Finally, I want to thank our shareholders whose support I value and who believe, like me, that our company has a bright future as more and more people turn on the radio.
Robert F. Neil
President and Chief Executive Officer
March 7, 2008
