CITADEL BROADCASTING CO, 424B3, 1999-02-18

CITADEL BROADCASTING CO
424B3, 1999-02-18
RADIO BROADCASTING STATIONS

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<PAGE> 1

Filed pursuant to Rule 424(b)(3)
File No. 333-69009

PROSPECTUS
- --------------------------------------------------------------------------------

CITADEL LOGO
CITADEL BROADCASTING COMPANY
EXCHANGE OFFER

FOR $115,000,000

9-1/4% SENIOR SUBORDINATED NOTES DUE 2008

- --------------------------------------------------------------------------------

Material Terms of the Exchange Offer:

- We are offering to exchange the notes we sold in a private
offering for new registered notes,

- The exchange offer expires at 5:00 p.m., New York City time,
on March 22, 1999, unless extended,

- The terms of the new notes are substantially identical to the
outstanding notes, except for the transfer restrictions and
registration rights relating to the outstanding notes,

- Tenders of outstanding notes may be withdrawn any time prior
to 5:00 p.m., New York City time, on the expiration date of
the exchange offer, and

- We will exchange all outstanding notes that are properly
tendered and not validly withdrawn.

CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 10 OF THIS PROSPECTUS.

- --------------------------------------------------------------------------------

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

No public market exists for the outstanding notes or the new notes. We do
not intend to list the new notes on any securities exchange or to seek approval
for quotation through any automated quotation system.

This prospectus is dated February 16, 1999
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.......................................... 1
Risk Factors................................................ 10
Use of Proceeds............................................. 17
Capitalization.............................................. 18
Information About Station and Market Data................... 19
Pro Forma Financial Information............................. 20
Selected Historical Financial Data.......................... 36
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 38
Business.................................................... 47
The Pending Transactions.................................... 76
Management.................................................. 81
Certain Transactions........................................ 90
Principal Stockholders...................................... 95
Description of Indebtedness................................. 98
The Exchange Offer.......................................... 107
Description of the Notes.................................... 118
Certain U.S. Federal Income Tax Consequences................ 153
Plan of Distribution........................................ 158
Legal Matters............................................... 158
Independent Auditors........................................ 158
Available Information....................................... 159
</TABLE>
<PAGE> 3

PROSPECTUS SUMMARY

The following summary contains a general discussion of our business, the
offering and summary financial information. We encourage you to read this entire
prospectus for a more complete understanding of Citadel Broadcasting Company,
Citadel License, Inc. and the exchange offer.

OUR BUSINESS

We are a radio broadcasting company that focuses on acquiring, developing
and operating radio stations in mid-sized markets. After we complete our pending
transactions, we will own or operate 76 FM and 39 AM radio stations in 20
markets, including clusters of four or more stations in 15 markets. We also will
have the right to construct one additional FM station.

OUR PRINCIPAL EXECUTIVE OFFICES

Our principal executive offices are located at City Center West, Suite 400,
7201 West Lake Mead Blvd., Las Vegas, Nevada, 89128, and our telephone number is
(702) 804-5200.

RISK FACTORS

You should consider all of the information in this prospectus before
tendering your outstanding notes in the exchange offer. The risks of an
investment in Citadel Broadcasting Company include our substantial indebtedness,
our history of net losses, competitive conditions and limitations on our
acquisition strategy. See the "Risk Factors" section of this prospectus for a
discussion of these and other risks involved in an investment in Citadel
Broadcasting Company.

SUMMARY OF THE TERMS OF THE EXCHANGE OFFER

On November 19, 1998, we completed the private offering of $115.0 million
principal amount of our 9 1/4% Subordinated Notes due 2008. In connection with
that offering, we agreed, among other things, to deliver to you this prospectus
and to use our best efforts to complete the exchange offer by June 17, 1999.

THE EXCHANGE OFFER

We are offering to exchange an equal principal amount of our 9 1/4% Senior
Subordinated Notes due 2008, which have been registered under the Securities Act
of 1933, as amended, for the tendered principal amount of our outstanding 9 1/4%
Senior Subordinated Notes due 2008. In order to be exchanged, an outstanding
note must be properly tendered and accepted. You may tender outstanding notes
only in integral multiples of $1,000.

As of this date, there is $115.0 million principal amount of notes
outstanding. The exchange offer is not conditioned on any minimum aggregate
principal amount of outstanding notes being tendered for exchange.

EXPIRATION DATE

The exchange offer will expire at 5:00 p.m., New York City time, March 22,
1999, unless we decide to extend the expiration date.

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<PAGE> 4

ACCRUED INTEREST ON THE NEW NOTES

If you exchange your outstanding notes for new notes in the exchange offer,
you will receive the same interest payment on the next interest payment date
following the expiration date that you would have received had you not accepted
the exchange offer. The next interest payment date following the expiration date
is expected to be May 15, 1999.

PROCEDURES FOR TENDERING OUTSTANDING NOTES

If you wish to tender your outstanding notes for exchange, you must
transmit on or prior to the expiration date a properly completed and duly
executed copy of the letter of transmittal delivered with this prospectus, or a
facsimile of the letter of transmittal, including all other documents required
by the letter of transmittal, to The Bank of New York, as exchange agent for the
exchange offer; and either:

-- a timely confirmation of book-entry transfer of your outstanding notes
in accordance with the procedure for book-entry transfers described in
this prospectus in "The Exchange Offer" section under the heading
"Procedures for Tendering," or

-- certificates for your outstanding notes.

GUARANTEED DELIVERY PROCEDURES

If you wish to tender your outstanding notes and, prior to the expiration
date of the exchange offer,

-- your outstanding notes are not immediately available,

-- you cannot deliver your outstanding notes, the letter of transmittal
or any other required documents to The Bank of New York, as exchange
agent, or

-- you cannot complete the procedures for book-entry transfer,

you may tender your outstanding notes by following the guaranteed delivery
procedures described in "The Exchange Offer" section under the heading
"Guaranteed Delivery Procedures."

SPECIAL PROCEDURES FOR BENEFICIAL OWNERS

If you wish to tender outstanding notes that are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee, you should
promptly instruct the registered holder to tender on your behalf. If you wish to
tender on your own behalf, you must, prior to completing the procedures
described above under the heading "Procedures for Tendering Outstanding Notes,"
either register ownership of the outstanding notes in your name or obtain a
properly completed bond power from the registered holder.

WITHDRAWAL RIGHTS

You may withdraw the tender of your notes at any time prior to the close of
business, New York City time, on the expiration date.

CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

The exchange of new notes for outstanding notes in the exchange offer will
generally not be a taxable event for United States federal income tax purposes.

2
<PAGE> 5

CONSEQUENCES OF FAILURE TO EXCHANGE OUTSTANDING NOTES

If you do not exchange your outstanding notes for new notes, you will no
longer be able to require us to register the outstanding notes under the
Securities Act. In addition, you will not be able to offer or sell the
outstanding notes unless:

-- they are registered under the Securities Act, or

-- you offer or sell them under an exemption from the registration
requirements of the Securities Act.

USE OF PROCEEDS

We will not receive any proceeds from the issuance of new notes in the
exchange offer.

SUMMARY OF ABILITY TO RESELL THE NEW NOTES

We believe that the new notes issued in the exchange offer may be offered
for resale, resold or otherwise transferred by you without compliance with the
registration and prospectus delivery provisions of the Securities Act, but only
if:

-- you acquire the new notes in the ordinary course of business,

-- you are not participating, do not intend to participate and have no
arrangement or understanding with any person to participate in a
distribution of the new notes, and

-- you are not an affiliate of ours, as the term affiliate is defined in
Rule 405 under the Securities Act and which may include our executive
officers and directors, another person having control over our
operations or management or an entity we control.

By executing and delivering the letter of transmittal, you will represent
to us that the foregoing are true.

If our belief is inaccurate, or if any of the conditions stated above are
not met, and you transfer any new note issued to you in the exchange offer
without delivering a prospectus meeting the requirements of the Securities Act
or without an exemption from the registration requirements of the Securities
Act, you may incur liability under the Securities Act. We do not assume or
indemnify you against liability under the Securities Act.

Each broker-dealer that is issued new notes in the exchange offer for its
own account in exchange for outstanding notes which were acquired by the
broker-dealer as a result of market-making or other trading activities, must
acknowledge that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of the new notes. A broker-dealer
may use this prospectus, as it may be amended or supplemented from time to time,
for an offer to resell, resale or other transfer of the new notes issued to it
in the exchange offer.

Holders who use the exchange offer to participate in a distribution of new
notes, including broker-dealers that acquired outstanding notes directly from
us, but not as a result of market-making or other trading activities, must
comply with the registration and prospectus delivery requirements of the
Securities Act in the absence of an exemption from these requirements. Failure
to comply with the registration and prospectus delivery requirements may result
in these holders incurring liabilities under the Securities Act for which we
will not indemnify them.

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<PAGE> 6

SUMMARY DESCRIPTION OF THE NEW NOTES
NOTES OFFERED

We are offering $115.0 million aggregate principal amount of 9-1/4% Senior
Subordinated Notes due 2008. The form and terms of the new notes will be the
same as the form and terms of the outstanding notes except that:

-- the new notes will bear a different CUSIP number from the outstanding
notes,

-- the new notes will have been registered under the Securities Act and,
therefore, will not bear legends restricting their transfer, and

-- you will not be entitled to any exchange or registration rights with
respect to the new notes.

The new notes will evidence the same debt as the outstanding notes, will be
entitled to the benefits of the indenture governing the outstanding notes and
will be treated under the indenture as a single class with the outstanding
notes.

ISSUER

Citadel Broadcasting Company

MATURITY

November 15, 2008.

INTEREST PAYMENT DATES

We will pay interest on the notes on May 15 and November 15 of each year,
beginning May 15, 1999.

SUBSIDIARY GUARANTEES

If we cannot make payments on the new notes, Citadel License, Inc., which
is our only subsidiary, must make them instead. Future subsidiaries may also be
required to guarantee the notes.

RANKING

The notes will be subordinated to all our debt and the subsidiary
guarantees will be subordinated to all debt of the guarantors, except for any
debt that expressly provides that it is not senior to other debt. The notes will
rank equally with our outstanding 10-1/4% Senior Subordinated Notes due 2007.

On a pro forma basis, after giving effect to the transactions described
under the caption "Pro Forma Financial Information," on September 30, 1998, the
notes:

-- would have been subordinate to $36.8 million of senior debt, and

-- would have ranked equally with $101.0 million principal amount of our
10-1/4% notes.

OPTIONAL REDEMPTION

We may redeem any of the notes on or after November 15, 2003 at the
redemption prices set forth in the "Description of the Notes" section under the
heading "Optional Redemption."

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<PAGE> 7

Prior to November 15, 2001, we may redeem up to 25% of the aggregate
principal amount of the then outstanding notes with the net proceeds of one or
more public equity offerings at 109.25% of their principal amount, plus accrued
interest.

CHANGE OF CONTROL

If we experience specific kinds of changes in control, we must offer to
repurchase any then issued notes at 101% of their principal amount, plus accrued
and unpaid interest, if any, to the repurchase date.

COVENANTS

The indenture governing the notes contains covenants that, among other
things, limit our ability to:

-- incur debt,

-- pay cash dividends or purchase our capital stock,

-- swap or sell assets,

-- engage in transactions with affiliates,

-- create liens on non-senior debt,

-- create subordinated debt that is senior to the notes, and

-- merge, consolidate or sell all or substantially all of our assets.

5
<PAGE> 8

SUMMARY HISTORICAL FINANCIAL DATA

Our summary historical financial data presented below as of and for each of
the years ended December 31, 1993, 1994, 1995, 1996 and 1997 are derived from
our consolidated financial statements. These consolidated financial statements
have been audited by KPMG LLP, independent certified public accountants. Our
summary historical financial data presented below as of September 30, 1998 and
for the nine months ended September 30, 1997 and 1998 are derived from our
unaudited consolidated financial statements. In our opinion, these unaudited
consolidated financial statements contain all necessary adjustments of a normal
recurring nature to present the financial statements in accordance with
generally accepted accounting principles. Our consolidated financial statements
as of December 31, 1996 and 1997 and for each of the years in the three-year
period ended December 31, 1997 and the independent auditors' report on those
financial statements, as well as our unaudited consolidated financial statements
as of September 30, 1998 and for the nine months ended September 30, 1997 and
1998, are included in this prospectus beginning on page F-4. Our financial
results are not comparable from year to year because we acquired and disposed of
various radio stations.

As you review the information contained in the following table, you should
note the following:

-- Interest Expense. Interest expense includes debt issuance costs and
debt discount amortization of $139,000, $287,000, $132,000, $163,000
and $441,000 for the years ended December 31, 1993, 1994, 1995, 1996
and 1997, respectively, and $156,000 and $401,000 for the nine months
ended September 30, 1997 and 1998, respectively.

-- Extraordinary Loss. On October 9, 1996, we repaid our long-term debt
of $31.3 million, payable to a financial institution, and our note
payable to a related party of $7.0 million. The early retirement of
the long-term debt resulted in a $1.8 million extraordinary loss due
to prepayment premiums and the write-off of debt issuance costs.

-- Cash Dividends. We have never declared cash dividends on our common
stock.

-- Net Loss Per Common Share. Basic and diluted net loss per common share
are the same for all periods presented due to our net losses.

-- Broadcast Cash Flow and EBITDA. Broadcast cash flow consists of
operating income (loss) before depreciation, amortization and
corporate general and administrative expenses. EBITDA consists of
operating income (loss) before depreciation and amortization. Although
broadcast cash flow and EBITDA are not measures of performance
calculated in accordance with generally accepted accounting
principles, we believe that they are useful to an investor in
evaluating our company because they are measures widely used in the
broadcasting industry to evaluate a radio company's operating
performance. However, you should not consider broadcast cash flow and
EBITDA in isolation or as substitutes for net income, cash flows from
operating activities and other income or cash flow statement data
prepared in accordance with generally accepted accounting principles
as a measure of liquidity or profitability.

-- Deficiency of Earnings to Fixed Charges. Fixed charges include
interest expense on debt, amortization of financing costs,
amortization of debt discount, 33% of rent expense, and dividend
requirements with respect to our 13-1/4% Exchangeable Preferred Stock.

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<PAGE> 9

You should also read the summary historical financial data below together
with, and it is qualified by reference to, our Consolidated Financial Statements
and related notes and the information contained in the "Selected Historical
Financial Data" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" sections included elsewhere in this prospectus.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------------------- --------------------
1993 1994 1995 1996 1997 1997 1998
-------- -------- -------- -------- --------- --------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net revenue................. $ 21,376 $ 32,998 $ 34,112 $ 45,413 $ 89,803 $ 60,025 $ 98,821
Station operating
expenses.................. 17,081 24,331 26,832 33,232 65,245 43,306 69,412
Depreciation and
amortization.............. 5,245 7,435 4,891 5,158 14,636 9,563 20,005
Corporate general and
administrative............ 961 2,504 2,274 3,248 3,530 2,562 3,351
-------- -------- -------- -------- --------- --------- --------
Operating income (loss)..... (1,911) (1,272) 115 3,775 6,392 4,594 6,053
Interest expense............ 2,637 4,866 5,242 6,155 12,304 8,214 13,590
Other income, net........... 149 657 781 414 451 401 94
-------- -------- -------- -------- --------- --------- --------
Income (loss) before income
taxes and extraordinary
item...................... (4,399) (5,481) (4,346) (1,966) (5,461) (3,219) (7,443)
Income tax benefit.......... -- -- -- -- (770) (105) (1,163)
-------- -------- -------- -------- --------- --------- --------
Income (loss) before
extraordinary item........ (4,399) (5,481) (4,346) (1,966) (4,691) (3,114) (6,280)
Extraordinary loss.......... -- -- -- (1,769) -- -- --
-------- -------- -------- -------- --------- --------- --------
Net income (loss)........... $ (4,399) $ (5,481) $ (4,346) $ (3,735) $ (4,691) $ (3,114) $ (6,280)
Dividend requirement for
exchangeable preferred
stock..................... -- -- -- -- 6,633 3,276 10,822
-------- -------- -------- -------- --------- --------- --------
Net loss applicable to
common shares............. $ (4,399) $ (5,481) $ (4,346) $ (3,735) $ (11,324) $ (6,390) $(17,102)
======== ======== ======== ======== ========= ========= ========
Net loss per common share... $ (110) $ (137) $ (109) $ (93) $ (283) $ (160) $ (428)
Shares used in per share
calculation............... 40,000 40,000 40,000 40,000 40,000 40,000 40,000
OTHER DATA:
Broadcast cash flow......... $ 4,295 $ 8,667 $ 7,280 $ 12,181 $ 24,558 $ 16,719 $ 29,409
EBITDA...................... 3,334 6,163 5,006 8,933 21,028 14,157 26,058
Net cash provided by (used
in) operating
activities................ 361 324 (434) (1,394) 5,543 4,137 3,946
Net cash provided by (used
in) investing
activities................ (10,818) (14,037) 4,810 (61,168) (211,622) (133,350) (39,350)
Net cash provided by (used
in) financing
activities................ 10,070 14,393 (4,908) 63,145 212,176 154,324 35,127
Capital expenditures........ 679 2,857 1,691 2,038 2,070 1,478 1,747
Deficiency of earnings to
fixed charges............. 4,399 5,481 4,346 1,966 12,094 6,495 18,265
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------------------- SEPTEMBER 30,
1993 1994 1995 1996 1997 1998
-------- -------- -------- -------- -------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents........ $ 857 $ 1,538 $ 1,005 $ 1,588 $ 7,685 $ 7,407
Working capital (deficiency)..... 1,701 3,382 2,928 (4,195) 22,593 31,057
Intangible assets, net........... 17,454 20,080 15,093 51,802 268,690 290,405
Total assets..................... 36,120 46,397 37,372 102,244 344,172 373,353
Long-term debt (including current
portion)....................... 30,468 47,805 43,046 91,072 189,699 118,480
Exchangeable preferred stock..... -- -- -- -- 102,010 112,965
Shareholder's equity (deficit)... 3,492 (4,782) (9,249) 5,999 16,132 105,204
</TABLE>

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<PAGE> 10

SUMMARY PRO FORMA FINANCIAL DATA

The following tables present our summary unaudited pro forma financial data
as of and for the periods indicated. The summary pro forma operating data
reflect adjustments to our summary historical operating data to give effect to
the following transactions as if they had occurred on January 1, 1997:

-- all radio station acquisitions and dispositions that we completed
since January 1, 1997,

-- the July 1997 offerings of $101.0 million principal amount of our
10-1/4% Senior Subordinated Notes due 2007 and 1.0 million shares of
our 13-1/4% Exchangeable Preferred Stock and the use of the net
proceeds from the offerings,

-- the repayment of outstanding borrowings under our credit facility with
the proceeds from the July 1998 initial public offering of common
stock of Citadel Communications Corporation, the company which owns
all of our outstanding common stock,

-- the pending acquisition of radio stations and related assets in Baton
Rouge and Lafayette, Harrisburg/Carlisle and Charleston, Binghamton,
Muncie and Kokomo,

-- the pending disposition of radio stations and related assets in
Eugene, Medford, Tri-Cities, Billings, State College and Johnstown,
and

-- the November 1998 offering of $115.0 million principal amount of the
outstanding 9 1/4% Senior Subordinated Notes due 2008 and the use of
the net proceeds from the offering.

The summary pro forma balance sheet data as of September 30, 1998 give
effect to the following transactions as if they had occurred on September 30,
1998:

-- the pending acquisitions and disposition described above,

-- the October 1998 sale of our radio stations in Quincy, Illinois,

-- the November 1998 acquisition of one AM radio station and the
disposition of one AM radio station in Little Rock,

-- the February 1999 acquisition of five FM radio stations and one AM
radio station in Saginaw/Bay City, and

-- the November 1998 offering of $115.0 million principal amount of the
outstanding 9-1/4% Senior Subordinated Notes due 2008 and the use of
net proceeds from the offering.

The summary pro forma financial data do not necessarily indicate either
future results of operations or the results that would have occurred if those
transactions had been completed on the indicated dates. You should read the
following financial information together with our historical consolidated
financial statements and related notes, and the information contained in the
"Pro Forma Financial Information," "Selected Historical Financial Data" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" sections included elsewhere in this prospectus.

8
<PAGE> 11

SUMMARY PRO FORMA FINANCIAL DATA

<TABLE>
<CAPTION>
CITADEL BROADCASTING COMPANY PRO FORMA AS ADJUSTED
-----------------------------------------------------------
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30, TWELVE MONTHS ENDED
DECEMBER 31, -------------------- SEPTEMBER 30,
1997 1997 1998 1998
------------ -------- -------- -------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
OPERATING DATA:
Net broadcasting revenue....... $134,787 $ 99,421 $110,955 $146,321
Station operating expenses..... 90,917 68,199 73,278 95,996
Depreciation and
amortization................. 36,408 27,619 28,003 36,792
Corporate general and
administrative............... 4,646 3,315 3,820 5,151
-------- -------- -------- --------
Operating expenses......... 131,971 99,133 105,101 137,939
-------- -------- -------- --------
Operating income............... 2,816 288 5,854 8,382
Interest expense............... 23,564 17,470 18,920 25,014
Other income, net.............. (451) (401) (94) (144)
-------- -------- -------- --------
Income (loss) before income
taxes........................ (20,297) (16,781) (12,972) (16,488)
Income taxes (benefit)......... (2,281) (971) (1,510) (2,820)
Dividend requirement for
exchangeable preferred
stock........................ (13,858) (10,501) (10,822) (14,179)
-------- -------- -------- --------
Income (loss) from continuing
operations applicable to
common shares................ $(31,874) $(26,311) $(22,284) $(27,847)
======== ======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
PRO FORMA AS ADJUSTED
SEPTEMBER 30, 1998
---------------------
(DOLLARS IN THOUSANDS)
<S> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 7,272
Working capital............................................. 32,253
Intangible assets, net...................................... 424,342
Total assets................................................ 522,653
Long-term debt (including current portion).................. 250,227
Exchangeable preferred stock................................ 112,965
Shareholder's equity........................................ 115,796
</TABLE>

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<PAGE> 12

RISK FACTORS

You should carefully consider the following factors and other information
in this prospectus before deciding to exchange outstanding notes for new notes.
Any of the following risks could have a material adverse effect on our business,
financial condition or results of operations or on the value of the notes.

SUBSTANTIAL INDEBTEDNESS--OUR DEBT SERVICE CONSUMES A SUBSTANTIAL PORTION OF THE
CASH WE GENERATE AND REDUCES THE CASH AVAILABLE TO INVEST IN OUR OPERATIONS.

We have a significant amount of indebtedness. Our large amount of debt
could significantly impact our business and you because, among other things, it:

-- requires us to dedicate a substantial portion of our operating cash
flow to fund interest expense, which reduces funds available for
operations, future business opportunities and other purposes,

-- limits our ability to obtain additional financing, if we need it, for
working capital, capital expenditures, acquisitions, debt service
requirements or other purposes,

-- inhibits our ability to compete with competitors who are less
leveraged than we are, and

-- restrains our ability to react to changing market conditions, changes
in our industry and economic downturns.

As of September 30, 1998, on a pro forma basis after giving effect to the
transactions described in the "Pro Forma Financial Information" section as if
they had occurred on January 1, 1997, we would have had:

-- outstanding total debt of $252.8 million, excluding the discount on
the 10-1/4% notes and the outstanding notes,

-- preferred stock with an aggregate liquidation preference of $113.0
million, and

-- shareholder's equity of $115.8 million.

ABILITY TO SERVICE DEBT--IN ORDER TO SERVICE OUR DEBT, WE REQUIRE A SIGNIFICANT
AMOUNT OF CASH. HOWEVER, OUR ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS
WHICH ARE BEYOND OUR CONTROL.

Prevailing economic conditions and financial, business and other factors,
many of which are beyond our control, will affect our ability to pay interest on
the notes and satisfy our other debt obligations. If in the future we cannot
generate sufficient cash flow from operations to make scheduled payments on the
notes or to meet our other obligations, we may need to refinance our debt,
obtain additional financing, delay planned acquisitions and capital expenditures
or sell assets. We cannot assure you that we will generate sufficient cash flow
or be able to obtain sufficient funding to satisfy our debt service
requirements.

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<PAGE> 13

RESTRICTIONS IMPOSED ON US BY OUR DEBT INSTRUMENTS--OUR EXISTING DEBT
INSTRUMENTS CONTAIN RESTRICTIONS AND LIMITATIONS WHICH COULD SIGNIFICANTLY
IMPACT OUR ABILITY TO OPERATE OUR BUSINESS AND REPAY THE NOTES.

The covenants in our credit facility and the agreements controlling our
other outstanding debt and preferred stock restrict, among other things, our
ability to incur additional debt, make particular types of investments or other
restricted payments, swap or sell assets or merge or consolidate. A breach of
any of the covenants contained in our credit facility could allow our lenders to
declare all amounts outstanding under the credit facility to be immediately due
and payable. In addition, our lenders under our credit facility could proceed
against the collateral granted to them to secure that indebtedness. If the
amounts outstanding under the credit facility are accelerated, we cannot assure
you that our assets will be sufficient to fulfill our obligations under the
notes.

Our credit facility requires us to obtain our banks' consent before we make
acquisitions or capital expenditures. Consequently, we may experience
difficulties in pursuing our acquisition strategy. Our credit facility also
requires us to maintain specific financial ratios and satisfy financial
condition tests. Events beyond our control could affect our ability to meet
those financial ratios and condition tests, and we cannot assure you that we
will do so.

For a more detailed discussion of our credit facility and our outstanding
debt and preferred stock, see the "Description of Indebtedness" and the
"Description of the Notes" sections.

HISTORY OF NET LOSSES--WE HAVE A HISTORY OF NET LOSSES WHICH WE EXPECT TO
CONTINUE THROUGH AT LEAST 1999.

We had net losses of $4.7 million for the year ended December 31, 1997 and
$6.3 million for the nine months ended September 30, 1998. We would have had net
losses from continuing operations on a pro forma basis of $18.0 million for the
year ended December 31, 1997 and $11.5 million for the nine months ended
September 30, 1998 after giving effect to the transactions described in the "Pro
Forma Financial Information" section as if they had occurred on January 1, 1997.

The primary reasons for these losses are significant charges for
depreciation and amortization relating to the acquisition of radio stations and
interest charges on our outstanding debt. If we acquire additional stations,
these charges will probably increase. We expect to continue to experience net
losses through at least 1999.

LIMITATIONS ON ACQUISITION STRATEGY--OUR STRATEGY TO EXPAND OUR BUSINESS AND
INCREASE REVENUE THROUGH ACQUISITIONS MAY FAIL DUE TO A NUMBER OF RISKS INVOLVED
IN IMPLEMENTING THIS STRATEGY.

We intend to grow by acquiring radio stations in mid-sized markets.
However, our acquisition strategy may not increase our cash flow or yield other
anticipated benefits because this strategy is subject to a number of other
risks, including:

-- Failure or unanticipated delays in completing acquisitions due to
difficulties in obtaining regulatory approval,

-- Difficulty in integrating the operations, systems and management of
our acquired stations,

11
<PAGE> 14

-- Diversion of management's attention from other business concerns,

-- Loss of key employees of acquired stations, and

-- Increase in prices for radio stations due to increased competition for
acquisition opportunities.

POTENTIAL DIFFICULTIES IN COMPLETING PENDING AND FUTURE TRANSACTIONS DUE TO
ANTITRUST REVIEW--ANTITRUST LAW CONSIDERATIONS COULD PREVENT OR DELAY OUR
STRATEGY TO EXPAND OUR BUSINESS AND INCREASE REVENUE.

The completion of some of our pending transactions is, and future
transactions we may consider will likely be, subject to the notification filing
requirements, applicable waiting periods and possible review by the United
States Department of Justice or the Federal Trade Commission under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Review by the
Department of Justice or the Federal Trade Commission may cause delays in
completing transactions and, in some cases, result in attempts by these agencies
to prevent completion of transactions or negotiate modifications to the proposed
terms. Any delay, prohibition or modification could adversely affect the terms
of a proposed transaction or could require us to abandon an otherwise attractive
opportunity.

For a discussion of antitrust proceedings in which we are currently
involved, see the "Business" section under the heading "Legal Proceedings" on
page 75.

IMPORTANCE OF CERTAIN MARKETS--A DOWNTURN IN ANY OF OUR SIGNIFICANT MARKETS
COULD ADVERSELY AFFECT OUR REVENUE AND CASH FLOW, WHICH MAY, AMONG OTHER THINGS,
IMPAIR OUR ABILITY TO FULFILL OUR OBLIGATIONS UNDER THE NOTES.

Our Albuquerque, Salt Lake City, Modesto and Providence markets are
particularly important for our financial well-being. A significant decline in
net broadcasting revenue from our stations in these markets could have a
material adverse effect on our operations and financial condition. To
illustrate, on a pro forma basis, after giving effect to the transactions
described in the "Pro Forma Financial Information" section, our radio stations
in these markets would have generated the following percentages of our total net
broadcasting revenue and broadcast cash flow in 1997:

<TABLE>
<CAPTION>
MARKET % OF NET BROADCASTING REVENUE % OF BROADCAST CASH FLOW
------ ------------------------------ -------------------------
<S> <C> <C>
Albuquerque.......... 13.6% 16.0%
Salt Lake City....... 9.2 6.6
Modesto.............. 6.2 8.2
Providence........... 5.1 5.5
</TABLE>

IMPACT OF THE YEAR 2000 PROBLEM--THE YEAR 2000 PROBLEM COULD SIGNIFICANTLY
DISRUPT OUR OPERATIONS, CAUSING A DECLINE IN CASH FLOW AND REVENUE AND OTHER
DIFFICULTIES.

We are in the process of assessing and remediating potential risks to our
business related to the Year 2000 problem. Although we believe that, as a result
of these efforts, our critical systems are or will be substantially Year 2000
ready, we cannot assure you that this will be the case. If we experience
significant problems as a result of the Year 2000 problem, our operations,
revenue, cash flow and other important aspects of our business and financial
well-being may be adversely affected.

12
<PAGE> 15

We believe that our greatest potential Year 2000 risk is that third parties
with whom we deal will fail to be Year 2000 ready. For example, our operations
and revenue may be adversely affected if our programming suppliers or key
advertisers experience significant disruptions in their businesses because of
the Year 2000 problem.

For more information concerning the Year 2000 problem and its potential
impact on our business, see the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section under the heading
"Liquidity and Capital Resources" on page 42.

NO ESTABLISHED TRADING MARKET FOR THE NOTES--IF AN ACTIVE TRADING MARKET DOES
NOT DEVELOP, YOU MAY HAVE DIFFICULTIES RESELLING THE NOTES.

The new notes will constitute a new issue of securities with no established
trading market. If a trading market does not develop or is not maintained, you
may experience difficulty in reselling new notes, or you may be unable to sell
them at all.

There has not been any public market for the outstanding notes, and we
cannot assure you that an active public or other market will develop for the new
notes. We do not intend to list the new notes on any securities exchange or to
seek their admission to trading in any automated quotation system. Prudential
Securities Incorporated and BT Alex. Brown Incorporated, the initial purchasers
of the outstanding notes, have advised us that they currently intend to make a
market in the new notes, but they are not obligated to do so and may discontinue
market-making at any time without notice. In addition, any market-making
activity by the initial purchasers will be subject to the limits imposed by the
Securities Act and the Securities Exchange Act of 1934, as amended, and may be
limited during the exchange offer and at other times.

UNCERTAINTIES WITH A PUBLIC TRADING MARKET FOR THE NOTES--IF A PUBLIC TRADING
MARKET FOR THE NOTES DOES DEVELOP, IT MAY NOT BE LIQUID AND MARKET PRICES FOR
THE NOTES MAY NOT BE FAVORABLE.

If a public trading market develops for the new notes, it may not be liquid
and it may be discontinued at any time. Moreover, future trading prices of the
new notes would depend on many factors, including, among other things,
prevailing interest rates, our operating results and the market for similar
securities. Depending on prevailing interest rates, the market for similar
securities and other factors, including our financial condition, the new notes
could trade at a discount from their principal amount.

SUBORDINATION OF NOTES AND ASSET ENCUMBRANCES--BECAUSE THE NOTES RANK BELOW OUR,
CITADEL LICENSE'S AND ANY FUTURE GUARANTORS' EXISTING SENIOR INDEBTEDNESS, YOU
MAY NOT RECEIVE FULL PAYMENT ON YOUR NOTES.

The notes will rank behind all of our senior debt, and the guarantee by
Citadel License, Inc. will rank behind all of its senior debt. Any guarantee by
a future subsidiary would also be subordinate to all of its senior debt. If we
become insolvent or are liquidated, or if payments under our credit facility are
accelerated, our assets will be available to pay obligations under the notes and
our 10-1/4% notes only after all payments have been made on our secured and
other senior debt. There may not be sufficient assets remaining to make full
payment on the notes and our 10-1/4% notes. Similarly, if Citadel License, Inc.
or any future guarantor becomes insolvent or is liquidated, its assets will be
available to pay obligations on

13
<PAGE> 16

the notes and the 10-1/4% notes only after all payments have been made on its
secured and senior debt.

On a pro forma basis, after giving effect to the transactions described
under the caption "Pro Forma Financial Information," on September 30, 1998, the
notes would have been subordinate to $36.8 million of senior debt.

POTENTIAL UNENFORCEABILITY OF SUBSIDIARY GUARANTEES--THE GUARANTEES BY CITADEL
LICENSE AND ANY FUTURE SUBSIDIARY GUARANTOR MAY BE UNENFORCEABLE.

In applying either federal or state statutes intended to protect creditors,
a court may void or hold unenforceable the guarantee by Citadel License and any
future subsidiary guarantor. In such case, you will no longer have a claim
against Citadel License or the future subsidiary guarantor and will be solely a
creditor of Citadel Broadcasting Company, assuming no other subsidiary
guarantees exist and are enforceable. Alternatively, a court may decide only to
limit a subsidiary guarantor's liability. However, the guarantor's liability may
be limited to such an extent that there will not be sufficient funds to pay the
notes in full.

For a discussion of the subsidiary guarantees, see the "The Description of
the Notes" section under the heading "Guarantees" on page 119.

DIFFICULTY OF SATISFYING PAYMENT OBLIGATIONS UPON A CHANGE OF CONTROL--WE MAY
NOT BE ABLE TO FULFILL OUR OBLIGATIONS UNDER OUR CREDIT FACILITY OR THE NOTES
FOLLOWING A CHANGE OF CONTROL.

If a change of control under the indenture governing the notes occurs, we
may be required to make an offer to purchase all of the notes then outstanding
at a purchase price of 101% of their principal amount, plus accrued interest. A
change of control or ownership also will result in an event of default under our
credit facility. If a change of control occurs, we cannot assure you that we
will have enough money to repay our bank lenders and to pay for the notes and
the 10-1/4% notes we may be required to buy. Our failure to make or complete an
offer to repurchase the notes or to pay the change of control purchase price
when due would give the trustee under the indenture the rights described in the
"Description of the Notes" section under the heading "Events of Default" on page
147. The exercise by the trustee of such rights could materially and adversely
affect our ability to maintain sufficient cash flow to conduct our business and
it may create various other problems.

SIGNIFICANT COMPETITION IN THE INDUSTRY--BECAUSE THE RADIO BROADCASTING INDUSTRY
IS HIGHLY COMPETITIVE, WE MAY LOSE AUDIENCE SHARE AND ADVERTISING REVENUE.

Our radio stations face heavy competition from other radio stations in each
market for audience share and advertising revenue. We also compete with other
media such as television, newspapers, direct mail and outdoor advertising for
advertising revenue. A decrease in either audience share or advertising revenue
could result in decreased cash flow, which could impair our ability to, among
other things, pay interest on the notes.

The radio broadcasting industry is also facing competition from new media
technologies that are being developed such as the following:

-- Audio programming by cable television systems, direct broadcasting
satellite systems and other digital audio broadcasting formats,

14
<PAGE> 17

-- Satellite-delivered Digital Audio Radio Service, which could result in
the introduction of several new satellite radio services with sound
quality equivalent to that of compact discs, and

-- In Band On Channel digital radio, which could provide digital radio
services in the same frequency range currently occupied by traditional
AM and FM radio services.

We cannot predict either the extent to which such competition will
materialize or, if such competition materializes, the extent of its effect on
our radio broadcasting business.

EXTENSIVE REGULATION OF OUR INDUSTRY--THE FEDERAL COMMUNICATIONS COMMISSION'S
EXTENSIVE REGULATION OF THE RADIO BROADCASTING INDUSTRY LIMITS OUR ABILITY TO
OWN AND OPERATE RADIO STATIONS AND OTHER MEDIA OUTLETS.

Licenses. The radio broadcasting industry is subject to extensive
regulation by the Federal Communications Commission under the Communications Act
of 1934, as amended. Issuance, renewal or transfer of radio broadcast station
operating licenses requires FCC approval, and we cannot operate our radio
stations without FCC licenses. The failure to renew our licenses could prevent
us from operating the affected stations and generating revenue from them. If the
FCC decides to include conditions or qualifications in any of our licenses, we
may be limited in the manner in which we may operate the affected station.

For a discussion of radio licensing and the difficulties we are currently
experiencing in renewing four of our licenses, see the "Business" section under
the heading "Federal Regulation of Radio Broadcasting" and the subheading
"License Grant and Renewal" on page 62.

Ownership. The Communications Act of 1934 and FCC rules impose specific
limits on the number of stations and other media outlets an entity can own in a
single market. The FCC attributes interests held by, among others, an entity's
officers, directors and stockholders to that entity for purposes of applying
these ownership limitations. The existing ownership rules or proposed new rules
could affect our acquisition strategy because they may prevent us from acquiring
additional stations in a particular market. We may also be prevented from
engaging in a swap transaction if the swap would cause the other company to
violate these rules.

For a more detailed discussion of these ownership limitations and their
impact on our business, see the "Business" section under the heading "Federal
Regulation of Radio Broadcasting" and the subheadings "Ownership Matters" on
page 66 and "Proposed Changes" on page 70.

FORWARD-LOOKING STATEMENTS--THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS
WHICH ARE ONLY PREDICTIONS FROM WHICH ACTUAL EVENTS OR RESULTS MAY MATERIALLY
DIFFER.

This prospectus includes forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act
of 1934, as amended, principally in this "Risk Factors" section and in the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business" sections. We based these forward-looking statements
largely on our current expectations and projections about future events and
financial trends affecting our business. The words believes, may, will,
estimates, continues, anticipates, intends, expects and similar words are
intended to identify forward-looking statements. We undertake no obligation to
publicly update or revise any forward-looking statements because of new
information, future events or otherwise. In light of these

15
<PAGE> 18

risks and uncertainties, the forward-looking events and circumstances discussed
in this prospectus might not transpire. Our forward-looking statements are
subject to risks, uncertainties and assumptions including, among other things:

-- general economic and business conditions, both nationally and in our
markets,

-- our expectations and estimates concerning future financial
performance, financing plans and the impact of competition,

-- anticipated trends in our industry, and

-- other risk factors discussed above.

16
<PAGE> 19

USE OF PROCEEDS

The exchange offer is intended to satisfy obligations we have under the
registration rights agreement entered into in connection with the November 1998
offering of $115.0 million aggregate principal amount of our outstanding 9-1/4%
Senior Subordinated Notes due 2008. We will not receive any cash proceeds from
the issuance of the new notes in the exchange offer.

The net proceeds of the offering of the outstanding notes were
approximately $111.0 million, after deducting the discount to Prudential
Securities Incorporated and BT Alex. Brown Incorporated, the initial purchasers
of the outstanding notes, and offering expenses. We used approximately $16.7
million of these net proceeds to repay outstanding indebtedness under the loan
agreement with our senior lenders, approximately $5.1 million to fund the
purchase price of one AM radio station in Little Rock, Arkansas and
approximately $35.0 million to fund the purchase price of five FM radio stations
and one AM radio station serving the Saginaw/Bay City, Michigan market. The
balance of the net proceeds will be used for other pending acquisitions, working
capital and general corporate purposes. Pending our use of these remaining
funds, we have invested the net proceeds in short-term, investment grade,
interest-bearing securities.

The following table shows the use of proceeds of the offering of the
outstanding notes. As you review the information contained in the following
table, you should note the following:

-- As of September 30, 1998, $18.7 million was outstanding under our
credit facility. For the nine months ended September 30, 1998, the
weighted average interest rate under our credit facility was
approximately 8.44%. Subject to mandatory prepayments of amounts
outstanding under our credit facility, the balance of any amounts
outstanding would have been due on September 30, 2003. We used amounts
borrowed under our credit facility for acquisitions and working
capital purposes. Because of our application of the proceeds of the
offering of the outstanding notes, $137.5 million is currently
available for borrowing under our credit facility.

-- The $33.0 million for the Baton Rouge/Lafayette acquisition is net of
$1.0 million in positive working capital that the acquired company is
required to have at closing of the acquisition. It does not include
$1.5 million related to noncompetition agreements to be entered into
in connection with the acquisition.

<TABLE>
<CAPTION>
AMOUNT
----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
*Repayment of borrowings under our credit facility.......... $ 16,726
*Saginaw/Bay City acquisition............................... 35,000
Baton Rouge/Lafayette acquisition.......................... 33,000
*Little Rock acquisition.................................... 5,100
Harrisburg/Carlisle acquisition............................ 4,500
*Working capital and general corporate purposes............. 16,674
*Initial purchasers' discount and expenses of the
offering.................................................. 4,000
--------
Total uses of proceeds............................ $115,000
========
</TABLE>

- ---------------

* Applied or partially applied as of this date

17
<PAGE> 20

CAPITALIZATION

The following table sets forth our unaudited capitalization as of September
30, 1998 on an actual basis and as adjusted to give effect to the transactions
described in the "Pro Forma Financial Information" section. You should read this
table in conjunction with our Consolidated Financial Statements and related
notes, the information contained in the "Pro Forma Financial Information"
section and other information included elsewhere in this prospectus.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
----------------------
PRO FORMA
ACTUAL AS ADJUSTED
-------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Long-term debt, including current portion:
Credit facility........................................... $ 18,726 $ 34,000
Other obligations......................................... 1,293 2,766
10-1/4% Notes............................................. 101,000 101,000
9-1/4% Notes.............................................. -- 115,000
-------- --------
Total long-term debt................................. 121,019 252,766
13-1/4% Exchangeable preferred stock........................ 112,965 112,965
Shareholder's equity........................................ 105,203 115,796
-------- --------
Total capitalization................................. $339,187 $481,527
======== ========
</TABLE>

18
<PAGE> 21

INFORMATION ABOUT STATION AND MARKET DATA

Unless otherwise indicated in this prospectus:

-- We obtained all metropolitan statistical area rank information,
information concerning the number of stations in a market, market
revenue information and station group market share and rank
information from Investing in Radio 1998 Market Report (3rd ed.)
published by BIA Publications, Inc.

-- We give all audience share and primary demographic share and rank
information for 1998 and obtained this information from the Spring
1998 Radio Market Report published by The Arbitron Company.

-- We obtained information concerning the number of viable stations in a
market from Duncan's Radio Market Guide (1997 ed.) compiled by
Duncan's American Radio, Inc. This guide defines viable stations as
stations which are active and viable competitors for advertising
dollars in the market. If the total number of viable AM or viable FM
stations within a market was not a whole number, we rounded that
number up to the nearest whole number. We counted a viable AM/FM
combination as one viable FM station.

Unless the context otherwise requires, the term operate, as used in
connection with our radio station activities, includes providing programming and
selling advertising under local marketing agreements or selling advertising
under joint sales agreements.

A radio station's designated market may be different from its community of
license. If a radio station's call letters have changed during the time we have
owned or operated the station, we describe the station by its call letters
currently in use, unless otherwise indicated.

19
<PAGE> 22

PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial
statements reflect the results of operations and balance sheet of Citadel
Broadcasting Company after giving effect to:

(1) the following transactions, which are collectively referred to in this
"Pro Forma Financial Information" section as the completed transactions:

-- all radio station acquisitions and dispositions completed after
January 1, 1997,

-- the July 1997 offerings of $101.0 million principal amount of our
10-1/4% Senior Subordinated Notes due 2007 and 1.0 million shares
of our 13-1/4% Exchangeable Preferred Stock and the use of the
net proceeds from these offerings,

-- the repayment of outstanding borrowings under our credit facility
with the proceeds from Citadel Communications' initial public
offering in July 1998, and

-- the November 1998 offering of $115.0 million principal amount of
the outstanding 9-1/4% Senior Subordinated Notes due 2008 and the
use of the net proceeds from that offering,

(2) the pending acquisitions of radio stations and related assets in Baton
Rouge and Lafayette, Harrisburg/Carlisle and Charleston, Binghamton, Muncie and
Kokomo, which are collectively referred to in this "Pro Forma Financial
Information" section as the pending acquisitions, and

(3) the pending disposition of radio stations and related assets in Eugene,
Medford, Tri-Cities, Billings, State College and Johnstown, which is referred to
in this "Pro Forma Financial Information" section as the pending disposition.

The unaudited pro forma condensed consolidated financial statements are
based on our historical consolidated financial statements and the financial
statements of those entities acquired, or from which assets were acquired, in
connection with the completed transactions, and should be read in conjunction
with the financial statements of the following entities and the notes thereto,
which are included elsewhere in this prospectus:

(1) Citadel Broadcasting Company,

(2) Tele-Media Broadcasting Company and its Partnership Interests,

(3) Deschutes River Broadcasting, Inc.,

(4) Snider Corporation,

(5) Snider Broadcasting Corporation and Subsidiary and CDB
Broadcasting Corporation,

(6) Maranatha Broadcasting Company, Inc.'s Radio Broadcasting
Division,

(7) Pacific Northwest Broadcasting Corporation and Affiliates, and

(8) Wicks Radio Group (a division of the Wicks Broadcast Group Limited
Partnership).

In the opinion of management, all adjustments necessary to fairly present
this pro forma information have been made. For pro forma purposes, our
consolidated statements of operations for the year ended December 31, 1997 and
the nine months ended September 30, 1997 and 1998 have been adjusted to give
effect to the completed transactions, the pending acquisitions and the pending
disposition as if each occurred on January 1, 1997. The interest rate applied to
borrowings under, and repayments of, our credit facility in the pro forma

20
<PAGE> 23

consolidated statements of operations was 8.4375%, which represents the interest
rate in effect under our credit facility as of January 1, 1997. For pro forma
purposes, our balance sheet as of September 30, 1998 has been adjusted to give
effect to the following transactions as if each had occurred on September 30,
1998:

-- the October 1998 sale of our radio stations in Quincy, Illinois,

-- the November 1998 acquisition of KAAY-AM and the disposition of
KRNN-AM in Little Rock,

-- the February 1999 acquisition of five FM radio stations and one AM
radio station in Saginaw/Bay City,

-- the offering of the outstanding notes and the use of the net
proceeds from that offering,

-- the pending acquisitions, and

-- the pending disposition.

The unaudited pro forma information is presented for illustrative purposes
only and does not indicate the operating results or financial position that
would have occurred if the completed transactions, the pending acquisitions and
the pending disposition had been completed on the dates indicated, nor is it
indicative of future operating results or financial position if the transactions
mentioned above are completed. We cannot predict whether the completion of the
pending acquisitions and the pending disposition will conform to the assumptions
used in the preparation of the unaudited pro forma condensed consolidated
financial statements.

21
<PAGE> 24

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
CITADEL ADJUSTMENTS FOR
BROADCASTING PENDING
ACTUAL ADJUSTMENTS FOR AS ADJUSTED FOR ACQUISITIONS PRO FORMA
CITADEL COMPLETED COMPLETED AND PENDING CITADEL
BROADCASTING TRANSACTIONS TRANSACTIONS DISPOSITION BROADCASTING
------------ --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Net revenue....................... $ 98,821 $4,882 $103,703 $ 7,252 $110,955
Station operating expenses........ 69,412 1,928 71,340 1,938 73,278
Depreciation and amortization..... 20,005 2,417 22,422 5,581 28,003
Corporate general and
administrative.................. 3,351 -- 3,351 469 3,820
-------- ------ -------- ------- --------
Operating expenses.............. 92,768 4,345 97,113 7,988 105,101
-------- ------ -------- ------- --------
Operating income (loss)........... 6,053 537 6,590 (736) 5,854
Interest expense.................. 13,590 805 14,395 4,525 18,920
Other (income) expense, net....... (94) -- (94) -- (94)
-------- ------ -------- ------- --------
Income (loss) before income
taxes........................... (7,443) (268) (7,711) (5,261) (12,972)
Income taxes (benefit)............ (1,163) -- (1,163) (347) (1,510)
Dividend requirement for
exchangeable preferred stock.... (10,822) -- (10,822) -- (10,822)
-------- ------ -------- ------- --------
Income (loss) from continuing
operations applicable to common
shares.......................... $(17,102) $ (268) $(17,370) $(4,914) $(22,284)
======== ====== ======== ======= ========
</TABLE>

In reviewing the information contained in the table above, you should note
the following:

(1) ADJUSTMENTS FOR COMPLETED TRANSACTIONS. The data in the Adjustments for
Completed Transactions column represent the net effect of the following
transactions as if each had taken place on January 1, 1997:

-- the disposition of WEST-AM in Allentown/Bethlehem,

-- the acquisitions of WEMR-AM, WEMR-FM, WCTP-FM, WCTD-FM and WCDL-AM in
Wilkes-Barre/Scranton,

-- the acquisitions of KQFC-FM, KKGL-FM, KBOI-AM, KIZN-FM and KZMG-FM in
Boise,

-- the disposition of WQCY-FM, WMOS-FM, WBJR-FM and WTAD-AM in Quincy,

-- the acquisition of KAAY-AM and the disposition of KRNN-AM in Little
Rock,

-- the acquisition of WKQZ-FM, WMJK-FM, WMJA-FM, WIOG-FM, WGER-FM and
WSGW-AM in Saginaw/Bay City,

-- the repayment of outstanding borrowings under Citadel Broadcasting's
credit facility with the proceeds from Citadel Communications' initial
public offering, and

-- the completion of the offering of the outstanding notes and the use of
the net proceeds from the that offering.

The data in this column does not reflect radio station acquisitions
completed in 1997 or the 1997 offerings of the 10-1/4% notes and the
exchangeable preferred stock and the use of the net proceeds from these
offerings. Depreciation and amortization for the acquisitions are based upon
preliminary allocations of the purchase price to property and equipment and
22
<PAGE> 25

intangible assets which will be amortized over periods of 1-25 years. Actual
depreciation and amortization may differ depending on the final allocation of
the purchase price. However, management does not believe these differences will
be material.

Prior to the acquisition dates, Citadel Broadcasting operated many of the
acquired stations under a joint sales agreement or a local marketing agreement.
It received fees for such services. The information in the Adjustments for
Completed Transactions column includes net revenue and station operating
expenses for stations operated under joint sales agreements to reflect ownership
of the stations as of January 1, 1997. Net revenue and station expenses for
stations operated under local marketing agreements are included in Citadel
Broadcasting's historical consolidated financial statements. For those stations
operated under joint sales agreements or local marketing agreements and
subsequently acquired, associated fees and redundant expenses were eliminated
and estimated occupancy costs were included to adjust the results of operations
to reflect ownership of the stations as of January 1, 1997.

The table below provides a breakdown of the components in the Adjustments
for Completed Transactions column. As you review this table, you should note the
following:

-- Dollars in the table are shown in thousands,

-- The data in the Other Transactions column represent the net effect of
each of the radio station acquisitions and dispositions listed above,

-- The data in the Repayment of Credit Facility column represent the
repayment of outstanding borrowings under Citadel Broadcasting's
credit facility with the proceeds from Citadel Communications' initial
public offering, and

-- The data in the Offering of Outstanding 9 1/4% Notes column reflect
the recording of the net increase in interest expense and the
amortization of deferred financing costs of $4.0 million related to
the notes.

<TABLE>
<CAPTION>
OFFERING OF
OTHER REPAYMENT OF OUTSTANDING COMPLETED
TRANSACTIONS CREDIT FACILITY 9 1/4% NOTES TRANSACTIONS
--------------- ------------------- -------------- --------------
<S> <C> <C> <C> <C>
Net revenue...................... $ 4,882 $ -- $ -- $4,882
Station operating expenses....... 1,928 -- -- 1,928
Depreciation and amortization.... 2,417 -- -- 2,417
------- ------- ------- ------
Operating expenses............. 4,345 -- -- 4,345
------- ------- ------- ------
Operating income................. 537 -- -- 537
Interest expense................. 2,660 (4,487) 2,632 805
------- ------- ------- ------
Income before income taxes....... (2,123) 4,487 (2,632) (268)
------- ------- ------- ------
Income from continuing
operations..................... $(2,123) $ 4,487 $(2,632) $ (268)
======= ======= ======= ======
</TABLE>

(2) ADJUSTMENTS FOR PENDING ACQUISITIONS AND PENDING DISPOSITION. The data
in the Adjustments for Pending Acquisitions and Pending Disposition column
represent the net effect of the following transactions as if each had taken
place on January 1, 1997:

-- the acquisition of KQXL-FM, WXOK-AM, WEMX-FM, WKJN-FM, WIBR-AM in
Baton Rouge and KFXZ-FM, KRRQ-FM, KNEK-AM and KNEK-FM in Lafayette,

-- the acquisition of WHYL-AM and WHYL-FM in Harrisburg/Carlisle,

-- the acquisition of WSSX-FM, WWWZ-FM, WMGL-FM, WSUY-FM, WNKT-FM,
WTMA-AM, WTMZ-AM and WXTC-AM in Charleston, WHWK-FM, WYOS-FM,

23
<PAGE> 26

WAAL-FM, WNBF-AM and WKOP-AM in Binghamton, WMDH-FM and WMDH-AM in
Muncie and WWKI-FM in Kokomo, and

-- the disposition of KKTT-FM, KEHK-FM and KUGN-AM in Eugene, KAKT-FM,
KBOY-FM, KCMX-FM, KTMT-FM, KCMX-AM and KTMT-AM in Medford, KEYW-FM,
KORD-FM, KXRX-FM, KTHK-FM and KFLD-AM in Tri-Cities, KCTR-FM, KKBR-FM,
KBBB-FM, KMHK-FM and KBUL-AM in Billings, WQKK-FM and WGLU-FM in
Johnstown and WQWK-FM, WNCL-FM, WRSC-AM and WBLF-AM in State College.

Depreciation and amortization for the acquisitions are based upon
preliminary allocations of the purchase price to property and equipment and
intangible assets which will be amortized over periods of 1-25 years. Actual
depreciation and amortization may differ depending on the final allocation of
the purchase price. However, management does not believe these differences will
be material.

The table below provides a breakdown of the components in the Adjustments
for Pending Acquisitions and Pending Disposition column. As you review this
table, you should note the following:

-- Dollars in the table are shown in thousands, and

-- The data in the Adjustments column include the elimination of $153,000
of expenses to reflect lower fees, as a percentage of national
advertising sales, paid by Citadel Broadcasting to a national
representative for national advertising and the elimination of
$132,000 of station management expenses, and additional corporate
overhead of $600,000 to reflect increase in costs to administer the
additional stations.

<TABLE>
<CAPTION>
CHARLESTON/
BINGHAMTON/ PENDING
BATON ROUGE/ MUNCIE/ ACQUISITIONS
LAFAYETTE CARLISLE KOKOMO PENDING AND PENDING
ACQUISITION ACQUISITION ACQUISITION DISPOSITION ADJUSTMENTS DISPOSITION
------------ ----------- ----------- ----------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net revenue............... $ 4,947 $ 636 $12,950 $(11,281) $ -- $ 7,252
Station operating
expenses................ 3,447 414 8,669 (10,307) (285) 1,938
Depreciation and
amortization............ 2,380 223 4,025 (1,047) -- 5,581
Corporate general and
administrative.......... -- -- -- (131) 600 469
------- ----- ------- -------- ----- -------
Operating expenses...... 5,827 637 12,694 (11,485) 315 7,988
Operating income (loss)... (880) (1) 256 204 (315) (736)
Interest expense.......... 2,088 285 3,797 (1,645) -- 4,525
------- ----- ------- -------- ----- -------
Income (loss) before
income taxes............ (2,968) (286) (3,541) 1,849 (315) (5,261)
Income taxes (benefit).... (347) -- -- -- -- (347)
------- ----- ------- -------- ----- -------
Income (loss)
from continuing
operations.............. $(2,621) $(286) $(3,541) $ 1,849 $(315) $(4,914)
======= ===== ======= ======== ===== =======
</TABLE>

24
<PAGE> 27

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
CITADEL ADJUSTMENTS FOR
BROADCASTING PENDING
ACTUAL ADJUSTMENTS FOR AS ADJUSTED FOR ACQUISITIONS PRO FORMA
CITADEL COMPLETED COMPLETED AND PENDING CITADEL
BROADCASTING TRANSACTIONS TRANSACTIONS DISPOSITION BROADCASTING
------------ --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Net revenue..................... $60,025 $ 34,056 $ 94,081 $ 5,340 $ 99,421
Station operating expenses...... 43,306 22,873 66,179 2,020 68,199
Depreciation and amortization... 9,563 12,344 21,907 5,712 27,619
Corporate general and
administrative................ 2,562 (334) 2,228 1,087 3,315
------- -------- -------- ------- --------
Operating expenses............ 55,431 34,883 90,314 8,819 99,133
------- -------- -------- ------- --------
Operating income (loss)......... 4,594 (827) 3,767 (3,479) 288
Interest expense................ 8,214 4,731 12,945 4,525 17,470
Other (income) expense, net..... (401) -- (401) -- (401)
------- -------- -------- ------- --------
Income (loss) before income
taxes......................... (3,219) (5,558) (8,777) (8,004) (16,781)
Income taxes (benefit).......... (105) (519) (624) (347) (971)
Dividend requirement for
exchangeable preferred
stock......................... (3,276) (7,225) (10,501) -- (10,501)
------- -------- -------- ------- --------
Income (loss) from continuing
operations applicable to
common shares................. $(6,390) $(12,264) $(18,654) $(7,657) $(26,311)
======= ======== ======== ======= ========
</TABLE>

In reviewing the information contained in the table above, you should note
the following:

-- the acquisition of Tele-Media Broadcasting Company,

-- the acquisitions of KENZ-FM, KBER-FM, KBEE-FM and KFNZ-AM in Salt Lake
City,

-- the acquisition of KNHK-FM in Reno,

-- the acquisition of KTHK-FM in Tri-Cities,

-- the acquisitions of WXEX-FM and WHKK-FM in Providence,

-- the acquisitions of KARN-AM, KARN-FM, KKRN-FM, KRNN-AM, KIPR-FM,
KOKY-FM, KLAL-FM, KLIH-AM, KURB-FM, KVLO-FM and a station that is not
yet operational, KAFN-FM, in Little Rock,

-- the acquisition of WLEV-FM in Allentown/Bethlehem,

-- the disposition of WEST-AM in Allentown/Bethlehem,

-- the acquisitions of WEMR-AM, WEMR-FM, WCTP-FM, WCTD-FM and WCDL-AM in
Wilkes-Barre/Scranton,

-- the acquisitions of KQFC-FM, KKGL-FM, KBOI-AM, KIZN-FM and KZMG-FM in
Boise,

25
<PAGE> 28

-- the disposition of WQCY-FM, WMOS-FM, WBJR-FM and WTAD-AM in Quincy,

-- the acquisition of KAAY-AM and the disposition of KRNN-AM in Little
Rock,

-- the acquisition of WKQZ-FM, WMJK-FM, WMJA-FM, WIOG-FM, WGER-FM and
WSGW-AM in Saginaw/Bay City,

-- the completion of the 1997 offerings of the 10 1/4% notes and the
exchangeable preferred stock and the use of the net proceeds from
these offerings,

-- the repayment of outstanding borrowings under Citadel Broadcasting's
credit facility with the proceeds from Citadel Communications' initial
public offering, and

-- the completion of the offering of the outstanding notes and the use of
the net proceeds from the that offering.

Prior to the acquisition dates, Citadel Broadcasting operated many of the
acquired stations under a joint sales agreement or local marketing agreement. It
received fees for such services. The information in the Adjustments for
Completed Transactions column includes net revenue and station operating
expenses for stations operated under joint sales agreements to reflect ownership
of the stations as of January 1, 1997. Net revenue and station expenses for
stations operated under local marketing agreements are included in Citadel
Broadcasting's historical consolidated financial statements. For those stations
operated under joint sales agreements or local marketing agreements and
subsequently acquired, associated fees and redundant expenses were eliminated
and estimated occupancy costs were included to adjust the results of operations
to reflect ownership of the stations as of January 1, 1997.

The table below provides a breakdown of the components in the Adjustments
for Completed Transactions column. As you review this table, you should note the
following:

-- Dollars in the table are shown in thousands,

-- The data in the Actual Tele-Media column represent the unaudited
historical results of Tele-Media for the period January 1, 1997
through July 3, 1997, including the historical operating results of
Wilkes-Barre/Scranton stations acquired by Tele-Media in February and
April 1997 which had been operated under local marketing and joint
sales agreements since December 1996. The operating results of
Tele-Media are included in Citadel Broadcasting's results of
operations beginning July 4, 1997, the date of acquisition,

-- The data in the 1997 Little Rock Acquisitions column reflect the
acquisitions of KARN-AM, KARN-FM, KKRN-FM, KRNN-AM, KIPR-FM, KOKY-FM,
KLAL-FM, KLIH-AM, KURB-FM, KVLO-FM and a station that is not yet
operational, KAFN-FM, in Little Rock,

-- The data in the Other Transactions column give effect to the following
transactions as if each had taken place on January 1, 1997:

26
<PAGE> 29

-- the acquisitions of KENZ-FM, KBER-FM, KBEE-FM and KFNZ-AM in Salt
Lake City, KNHK-FM in Reno, KTHK-FM in Tri-Cities, WXEX-FM and
WHKK-FM in Providence, WLEV-FM in Allentown/Bethlehem, WEMR-AM,
WEMR-FM, WCTP-FM, WCTD-FM and WCDL-AM in Wilkes-Barre/Scranton,
KQFC-FM, KKGL-FM, KBOI-AM, KIZN-FM and KZMG-FM in Boise, and
WKQZ-FM, WMJK-FM, WMJA-FM, WIOG-FM, WGER-FM and WSGW-AM in
Saginaw/Bay City,

-- the disposition of WEST-AM in Allentown/Bethlehem and WQCY-FM,
WMOS-FM, WBJR-FM and WTAD-AM in Quincy, and

-- the acquisition of KAAY-AM and the disposition of KRNN-AM in
Little Rock,

-- The data in the Repayment of Credit Facility column reflect the
repayment of outstanding borrowings under Citadel Broadcasting's
credit facility with the proceeds from Citadel Communications' initial
public offering, and

27
<PAGE> 30
<TABLE>
<CAPTION>
OFFERINGS
PRO FORMA OF 10 1/4%
ADJUSTMENTS NOTES AND
FOR 1997 EXCHANGEABLE REPAYMENT OF
ACTUAL TELE-MEDIA LITTLE ROCK OTHER PREFERRED THE CREDIT
TELE-MEDIA ACQUISITION ACQUISITIONS TRANSACTIONS STOCK FACILITY
------------- ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net revenue................. $16,241 $ -- $5,293 $12,522 $ -- $ --
Station operating
expenses.................. 12,679 (573)(a) 2,710 8,057 -- --
Depreciation and
amortization.............. 2,208 2,278(b) 2,037 5,821 -- --
Corporate general and
administrative............ 454 (788)(c) -- -- -- --
------- ------- ------ ------- ------- -------
Operating expenses........ 15,341 917 4,747 13,878 -- --
------- ------- ------ ------- ------- -------
Operating income (loss)..... 900 (917) 546 (1,356) -- --
Interest expense............ 10,375 (708)(d) 591 5,869 (7,298)(e) (6,730)
------- ------- ------ ------- ------- -------
Income (loss) before income
taxes..................... (9,475) (209) (45) (7,225) 7,298 6,730
Income taxes (benefit)...... -- (519) -- -- -- --
Dividend requirement for
exchangeable preferred
stock..................... -- -- -- -- (7,225)(f) --
------- ------- ------ ------- ------- -------
Income (loss) from
continuing operations..... $(9,475) $ 310 $ (45) $(7,225) $ 73 $ 6,730
======= ======= ====== ======= ======= =======

OFFERING OF
OUTSTANDING COMPLETED
9 1/4% NOTES TRANSACTIONS
------------ ------------
<S> <C> <C>
Net revenue................. $ -- $ 34,056
Station operating
expenses.................. -- 22,873
Depreciation and
amortization.............. -- 12,344
Corporate general and
administrative............ -- (334)
------- --------
Operating expenses........ -- 34,883
------- --------
Operating income (loss)..... -- (827)
Interest expense............ 2,632 4,731
------- --------
Income (loss) before income
taxes..................... (2,632) (5,558)
Income taxes (benefit)...... -- (519)
Dividend requirement for
exchangeable preferred
stock..................... -- (7,225)
------- --------
Income (loss) from
continuing operations..... $(2,632) $(12,264)
======= ========
</TABLE>

- ---------------

(b) Reflects increased depreciation and amortization resulting from the
purchase price allocation.

(c) Reflects the elimination of the management fees paid to affiliates by
Tele-Media of $454,000 and the recording of corporate overhead of
$200,000 which represents Citadel Broadcasting's estimate of the
incremental expense necessary to oversee the Tele-Media stations and the
elimination of $534,000 of expenses associated with the litigation
between Citadel Broadcasting and Tele-Media. Had the 1997 offering of
the 10 1/4% notes and the exchangeable preferred stock and the
Tele-Media acquisition occurred on January 1, 1997, these expenses would
not have been incurred.

(d) Reflects the elimination of Tele-Media interest expense of $5.5 million
and the recording of interest expense of $4.8 million that would have
been incurred if the acquisition of Tele-Media had occurred on January
1, 1997.

(e) Reflects the reduction of Citadel Broadcasting's pro forma interest
expense, the recording of interest expense related to the 10 1/4% notes
and recording of the amortization of deferred financing costs of $3.3
million related to the 10 1/4% notes.

(f) Reflects the recording of the dividends related to the exchangeable
preferred stock as if the 1997 offerings of the 10 1/4% notes and the
exchangeable preferred stock had taken place on January 1, 1997.

28
<PAGE> 31

(2) ADJUSTMENTS FOR PENDING ACQUISITIONS AND PENDING DISPOSITION. The data
in the Adjustments for Pending Acquisitions and Pending Disposition represent
the net effect of the following transactions as if each had taken place on
January 1, 1997:

-- the acquisition of KQXL-FM, WXOK-AM, WEMX-FM, WKJN-FM, WIBR-AM in
Baton Rouge and KFXZ-FM, KRRQ-FM, KNEK-AM and KNEK-FM in Lafayette,

-- the acquisition of WHYL-AM and WHYL-FM in Harrisburg/Carlisle,

-- the acquisition of WSSX-FM, WWWZ-FM, WMGL-FM, WSUY-FM, WNKT-FM,
WTMA-AM, WTMZ-AM and WXTC-AM in Charleston, WHWK-FM, WYOS-FM, WAAL-FM,
WNBF-AM and WKOP-AM in Binghamton, WMDH-FM and WMDH-AM in Muncie and
WWKI-FM in Kokomo, and

Depreciation and amortization for such acquisitions are based upon
preliminary allocations of the purchase price to property and equipment and
intangible assets which will be amortized over periods of 1-25 years. Actual
depreciation and amortization may differ depending on the final allocation of
the purchase price. However, management does not believe these differences will
be material.

The table below provides a breakdown of the components in the Adjustments
for Pending Acquisitions and Pending Disposition column. As you review this
table, you should note that dollars in the table are shown in thousands.

<TABLE>
<CAPTION>
CHARLESTON/ PENDING
BATON ROUGE/ BINGHAMTON/ ACQUISITIONS
LAFAYETTE CARLISLE MUNCIE/KOKOMO PENDING AND PENDING
ACQUISITION ACQUISITION ACQUISITION DISPOSITION ADJUSTMENTS DISPOSITION
------------ ----------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net revenue....................... $ 4,368 $ 670 $11,052 $(10,750) $ -- $ 5,340
Station operating
expenses........................ 3,323 392 8,156 (9,564) (287)(a) 2,020
Depreciation and amortization..... 2,380 223 4,025 (916) -- 5,712
Corporate general and
administrative.................. -- -- -- (113) 1,200(b) 1,087
------- ------ ------- -------- ----- --------
Operating expenses.............. 5,703 615 12,181 (10,593) 913 8,819
Operating income (loss)........... (1,335) 55 (1,129) (157) (913) (3,479)
Interest expense.................. 2,088 285 3,797 (1,645) -- 4,525
------- ------ ------- -------- ----- --------
Income (loss) before income
taxes........................... (3,423) (230) (4,926) 1,488 (913) (8,004)
Income taxes (benefit)............ (347) -- -- -- -- (347)
------- ------ ------- -------- ----- --------
Income (loss) from continuing
operations...................... $(3,076) $ (230) $(4,926) $ 1,488 $(913) $ (7,657)
======= ====== ======= ======== ===== ========
</TABLE>

- ---------------

(a) Includes the elimination of $155,000 of expenses to reflect lower fees,
as a percentage of national advertising sales, paid by Citadel
Broadcasting to a national representative for national advertising and
the elimination of $132,000 of station management expenses.

(b) Reflects increased corporate overhead to administer additional stations.

29
<PAGE> 32

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
CITADEL ADJUSTMENTS FOR
BROADCASTING PENDING
ACTUAL ADJUSTMENTS FOR AS ADJUSTED FOR ACQUISITIONS PRO FORMA
CITADEL COMPLETED COMPLETED AND PENDING CITADEL
BROADCASTING TRANSACTIONS TRANSACTIONS DISPOSITION BROADCASTING
------------ --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Net revenue....................... $ 89,803 $ 36,566 $126,369 $ 8,418 $134,787
Station operating expenses........ 65,245 23,161 88,406 2,511 90,917
Depreciation and amortization..... 14,636 14,156 28,792 7,616 36,408
Corporate general and
administrative.................. 3,530 (334) 3,196 1,450 4,646
-------- -------- -------- -------- --------
Operating expenses........... 83,411 36,983 120,394 11,577 131,971
-------- -------- -------- -------- --------
Operating income (loss)........... 6,392 (417) 5,975 (3,159) 2,816
Interest expense.................. 12,304 5,227 17,531 6,033 23,564
Other (income) expense, net....... (451) -- (451) -- (451)
-------- -------- -------- -------- --------
Income (loss) before income
taxes........................... (5,461) (5,644) (11,105) (9,192) (20,297)
Income taxes (benefit)............ (770) (1,048) (1,818) (463) (2,281)
Dividend requirement for
exchangeable preferred stock.... (6,633) (7,225) (13,858) -- (13,858)
-------- -------- -------- -------- --------
Income (loss) from continuing
operations applicable to common
shares.......................... $(11,324) $(11,821) $(23,145) $ (8,729) $(31,874)
======== ======== ======== ======== ========
</TABLE>

In reviewing the information contained in the table above, you should note
the following:

-- the acquisition of Tele-Media Broadcasting Company,

-- the acquisitions of KENZ-FM, KBER-FM, KBEE-FM and KFNZ-AM in Salt
Lake City,

-- the acquisition of KNHK-FM in Reno,

-- the acquisition of KTHK-FM in Tri-Cities,

-- the acquisitions of WXEX-FM and WHKK-FM in Providence,

-- the acquisitions of KARN-AM, KARN-FM, KKRN-FM, KRNN-AM, KIPR-FM,
KOKY-FM, KLAL-FM, KLIH-AM, KURB-FM, KVLO-FM and a station that is
not yet operational, KAFN-FM, in Little Rock,

-- the acquisition of WLEV-FM in Allentown/Bethlehem,

-- the disposition of WEST-AM in Allentown/Bethlehem,

-- the acquisitions of WEMR-AM, WEMR-FM, WCTP-FM, WCTD-FM and
WCDL-AM in Wilkes-Barre/Scranton,

-- the acquisitions of KQFC-FM, KKGL-FM, KBOI-AM, KIZN-FM and
KZMG-FM in Boise,

30
<PAGE> 33

-- the disposition of WQCY-FM, WMOS-FM, WBJR-FM and WTAD-AM in
Quincy,

-- the acquisition of KAAY-AM and the disposition of KRNN-AM in
Little Rock,

-- the acquisition of WKQZ-FM, WMJK-FM, WMJA-FM, WIOG-FM, WGER-FM
and WSGW-AM in Saginaw/Bay City,

-- the completion of the 1997 offerings of the 10-1/4% notes and the
exchangeable preferred stock and the use of the net proceeds from
these offerings,

-- the repayment of outstanding borrowings under Citadel
Broadcasting's credit facility with the proceeds from Citadel
Communications' initial public offering, and

-- the completion of the offering of the outstanding notes and the
use of the net proceeds from the that offering.

Net revenue and station expenses for stations operated under local
marketing agreements are included in Citadel Broadcasting's historical
consolidated financial statements. For those stations operated under joint sales
agreements or local marketing agreements and subsequently acquired, associated
fees and redundant expenses were eliminated and estimated occupancy costs were
included to adjust the results of operations to reflect ownership of the
stations as of January 1, 1997.

The table below provides a breakdown of the components in the Adjustments
for Completed Transactions column. As you review this table, you should note the
following:

-- Dollars in the table below are shown in thousands,

-- The data in the Actual Tele-Media column represent the unaudited
historical results of Tele-Media for the period January 1, 1997
through July 3, 1997, including the historical operating results
of Wilkes-Barre/Scranton stations acquired by Tele-Media in
February and April 1997 which had been operated under local
marketing and joint sales agreements since December 1996. The
operating results of Tele-Media are included in Citadel
Broadcasting's results of operations beginning July 4, 1997, the
date of acquisition,

-- The data in the 1997 Little Rock Acquisitions column reflect the
acquisitions of KARN-AM, KARN-FM, KKRN-FM, KRNN-AM, KIPR-FM,
KOKY-FM, KLAL-FM, KLIH-AM, KURB-FM, KVLO-FM and a station that is
not yet operational, KAFN-FM, in Little Rock,

-- The data in the Other Transactions column give effect to the
following transactions as if each had taken place on January 1,
1997:

-- the acquisitions of KENZ-FM, KBER-FM, KBEE-FM and KFNZ-AM in
Salt Lake City, KNHK-FM in Reno, KTHK-FM in Tri-Cities,
WXEX-FM and WHKK-FM in Providence, WLEV-FM in
Allentown/Bethlehem, WEMR-AM, WEMR-FM, WCTP-FM, WCTD-FM and
WCDL-AM in Wilkes-Barre/Scranton, KQFC-FM, KKGL-FM, KBOI-AM,
KIZN-FM and KZMG-FM in Boise, and WKQZ-FM, WMJK-FM, WMJA-FM,
WIOG-FM, WGER-FM and WSGW-AM in Saginaw/Bay City,

-- the disposition of WEST-AM in Allentown/Bethlehem and
WQCY-FM, WMOS-FM, WBJR-FM and WTAD-AM in Quincy, and

-- the acquisition of KAAY-AM and the disposition of KRNN-AM in
Little Rock, and

31
<PAGE> 34

-- The data in the Offering of Outstanding 9-1/4% Notes column
reflect the recording of the net increase in interest expense and
the amortization of deferred financing costs of $4.0 million
related to the notes.
<TABLE>
<CAPTION>
OFFERINGS
OF 10-1/4%
ADJUSTMENTS NOTES AND OFFERING
FOR 1997 EXCHANGEABLE REPAYMENT OF
ACTUAL TELE-MEDIA LITTLE ROCK OTHER PREFERRED OF CREDIT OUTSTANDING
TELE-MEDIA ACQUISITION ACQUISITIONS TRANSACTIONS STOCK FACILITY 9-1/4% NOTES
---------- ----------- ------------ ------------ ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenue............. $16,241 $ -- $ 5,596 $14,729 $ -- $ -- $ --
Station operating
expenses.............. 12,679 (573)(a) 2,835 8,220 -- -- --
Depreciation and
amortization.......... 2,208 2,278(b) 2,358 7,312 -- -- --
Corporate general and
administrative........ 454 (788)(c) -- -- -- -- --
------- ------ ------- ------- ------- ------- -------
Operating
expenses............ 15,341 917 5,193 15,532 -- -- --
------- ------ ------- ------- ------- ------- -------
Operating income
(loss)................ 900 (917) 403 (803) -- -- --
Interest expense........ 10,375 (708)(d) 591 7,732 (7,298)(e) (8,974)(g) 3,509
------- ------ ------- ------- ------- ------- -------
Income (loss) before
income taxes.......... (9,475) (209) (188) (8,535) 7,298 8,974 (3,509)
Income taxes
(benefit)............. -- (519) (225) (304) -- -- --
Dividend requirement for
exchangeable preferred
stock................. -- -- -- -- (7,225)(f) -- --
------- ------ ------- ------- ------- ------- -------
Income (loss) from
continuing
operations............ $(9,475) $ 310 $ 37 $(8,231) $ 73 $ 8,974 $(3,509)
======= ====== ======= ======= ======= ======= =======

COMPLETED
TRANSACTIONS
------------
<S> <C>
Net revenue............. $ 36,566
Station operating
expenses.............. 23,161
Depreciation and
amortization.......... 14,156
Corporate general and
administrative........ (334)
--------
Operating
expenses............ 36,983
--------
Operating income
(loss)................ (417)
Interest expense........ 5,227
--------
Income (loss) before
income taxes.......... (5,644)
Income taxes
(benefit)............. (1,048)
Dividend requirement for
exchangeable preferred
stock................. (7,225)
--------
Income (loss) from
continuing
operations............ $(11,821)
========
</TABLE>

- ---------------

(a) Includes the elimination of $115,000 of expenses to reflect lower fees,
as a percentage of national advertising sales, paid by Citadel
Broadcasting to a national representative for national advertising, the
elimination of $211,000 of local marketing agreement and joint sales
agreement fees related to the Wilkes-Barre/Scranton stations and the
elimination of $247,000 of expenses associated with the litigation
between Citadel Broadcasting and Tele-Media. Had the Tele-Media
acquisition occurred on January 1, 1997, these expenses would not have
been incurred.
(b) Reflects increased depreciation and amortization resulting from the
purchase price allocation.
(c) Reflects the elimination of the management fees paid to affiliates by
Tele-Media of $454,000 and the recording of corporate overhead of
$200,000 which represents Citadel Broadcasting's estimate of the
incremental expense necessary to oversee the Tele-Media stations and the
elimination of $534,000 of expenses associated with the litigation
between Citadel Broadcasting and Tele-Media. Had the 1997 offerings of
the 10-1/4 notes and the exchangeable preferred stock and the Tele-Media
acquisition occurred on January 1, 1997, these expenses would not have
been incurred.
(d) Reflects the elimination of Tele-Media interest expense of $5.5 million
and the recording of interest expense of $4.8 million that would have
been incurred if the acquisition of Tele-Media had occurred on January
1, 1997.
(e) Reflects the reduction of Citadel Broadcasting's pro forma interest
expense, the recording of interest expense related to the 10-1/4% notes
and the amortization of deferred financings costs of $3.3 million
related to the 10-1/4% notes.
(f) Reflects the recording of the dividends on the exchangeable preferred
stock as if the 1997 offerings of the 10-1/4% notes and the exchangeable
preferred stock had taken place on January 1, 1997.
(g) Reflects the reduction of interest expense due to the pay down of
Citadel Broadcasting's credit facility with the proceeds received from
Citadel Communications' initial public offering.

32
<PAGE> 35

-- the acquisition of KQXL-FM, WXOK-AM, WEMX-FM, WKJN-FM, WIBR-AM in
Baton Rouge and KFXZ-FM, KRRQ-FM, KNEK-AM and KNEK-FM in
Lafayette,

-- the acquisition of WHYL-AM and WHYL-FM in Harrisburg/Carlisle,

-- the acquisition of WSSX-FM, WWWZ-FM, WMGL-FM, WSUY-FM, WNKT-FM,
WTMA-AM, WTMZ-AM and WXTC-AM in Charleston, WHWK-FM, WYOS-FM,
WAAL-FM, WNBF-AM and WKOP-AM in Binghamton, WMDH-FM and WMDH-AM
in Muncie and WWKI-FM in Kokomo, and

-- the disposition of KKTT-FM, KEHK-FM and KUGN-AM in Eugene,
KAKT-FM, KBOY-FM, KCMX-FM, KTMT-FM, KCMX-AM and KTMT-AM in
Medford, KEYW-FM, KORD-FM, KXRX-FM, KTHK-FM and KFLD-AM in
Tri-Cities, KCTR-FM, KKBR-FM, KBBB-FM, KMHK-FM and KBUL-AM in
Billings, WQKK-FM and WGLU-FM in Johnstown and WQWK-FM, WNCL-FM,
WRSC-AM and WBLF-AM in State College.

Depreciation and amortization for the acquisitions are based upon
preliminary allocations of the purchase price to property and equipment and
intangible assets which will be amortized over periods of 1- 25 years. Actual
depreciation and amortization may differ depending on the final allocation of
the purchase price. However, management does not believe these differences will
be material.

<TABLE>
<CAPTION>
CHARLESTON/ PENDING
BATON ROUGE/ BINGHAMTON/ ACQUISITIONS
LAFAYETTE CARLISLE MUNCIE/KOKOMO PENDING AND PENDING
ACQUISITION ACQUISITION ACQUISITION DISPOSITION ADJUSTMENTS DISPOSITION
------------ ----------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net revenue...................... $ 6,064 $ 899 $16,002 $(14,547) $ -- $ 8,418
Station operating expenses....... 4,649 528 10,917 (13,203) (380)(a) 2,511
Depreciation and amortization.... 3,173 297 5,367 (1,221) -- 7,616
Corporate general and
administrative................. -- -- -- (150) 1,600(b) 1,450
------- ------ ------- -------- ------- -------
Operating expenses............. 7,822 825 16,284 (14,574) 1,220 11,577
Operating income (loss).......... (1,758) 74 (282) 27 (1,220) (3,159)
Interest expense................. 2,784 380 5,063 (2,194) -- 6,033
------- ------ ------- -------- ------- -------
Income (loss) before income
taxes.......................... (4,542) (306) (5,345) 2,221 (1,220) (9,192)
Income taxes (benefit)........... (463) -- -- -- -- (463)
------- ------ ------- -------- ------- -------
Income (loss) from continuing
operations..................... $(4,079) $ (306) $(5,345) $ 2,221 $(1,220) $(8,729)
======= ====== ======= ======== ======= =======
</TABLE>

- ---------------

(a) Includes the elimination of $204,000 of expenses to reflect lower fees,
as a percentage of national advertising sales, paid by Citadel
Broadcasting to a national representative for national advertising and
the elimination of $176,000 of station management expenses.

(b) Reflects increased corporate overhead to administer additional stations.

33
<PAGE> 36

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
SEPTEMBER 30, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACQUISITION OF ADJUSTMENTS FOR
KAAY-AM PENDING ADJUSTMENTS
ACTUAL ADJUSTMENTS AND SAGINAW/ ACQUISITIONS FOR OFFERING OF
CITADEL FOR THE DISPOSITION OF BAY CITY AND PENDING OUTSTANDING
BROADCASTING QUINCY SALE KRNN-AM ACQUISITION DISPOSITION 9-1/4% NOTES
------------ ----------- -------------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and cash
equivalents.......... $ 7,407 $ -- $(4,909) $ -- $(17,000) $ 21,774
Accounts and notes
receivable, net...... 32,044 250 80 -- 1,000 --
Prepaid expenses....... 3,287 -- -- -- -- --
-------- ------- ------- -------- -------- --------
Total current assets... 42,738 250 (4,829) -- (16,000) 21,774
Property and equipment,
net.................. 36,834 (375) 220 5,000 5,324 --
Intangible assets,
net.................. 290,405 (1,087) 4,620 30,000 100,404 --
Other assets........... 3,376 -- -- -- (1) 4,000(1)
-------- ------- ------- -------- -------- --------
$373,353 $(1,212) $ 11 $ 35,000 $ 89,727 $ 25,774
======== ======= ======= ======== ======== ========
LIABILITIES AND
SHAREHOLDER'S EQUITY
Accounts payable and
accrued
liabilities.......... $ 11,399 $ -- $ 11 $ -- $ -- $ --
Current maturities of
other long-term
obligations.......... 282 -- -- -- (12) --
-------- ------- ------- -------- -------- --------
Total current
liabilities.......... 11,681 -- 11 -- (12) --
-------- ------- ------- -------- -------- --------
Notes payable, less
current maturities... 18,726 (2,000) -- 35,000 71,500 (89,226)(2)
10-1/4% Notes.......... 98,461 -- -- -- -- --
9-1/4% Notes........... -- -- -- -- -- 115,000
Other long-term
obligations, less
current maturities... 1,011 -- -- -- 1,485 --
Deferred tax
liability............ 25,306 -- -- -- 6,949 --
Exchangeable preferred
stock................ 112,965 -- -- -- -- --
Shareholder's equity:
Common stock and
additional paid-in
capital........... 137,648 -- -- -- -- --
Accumulated
deficit........... (32,445) 788 -- -- 9,805 --
-------- ------- ------- -------- -------- --------
$373,353 $(1,212) $ 11 $ 35,000 $ 89,727 $ 25,774
======== ======= ======= ======== ======== ========

PRO FORMA
CITADEL
BROADCASTING
------------
<S> <C>
ASSETS
Cash and cash
equivalents.......... $ 7,272
Accounts and notes
receivable, net...... 33,374
Prepaid expenses....... 3,287
--------
Total current assets... 43,933
Property and equipment,
net.................. 47,003
Intangible assets,
net.................. 424,342
Other assets........... 7,375
--------
$522,653
========
LIABILITIES AND
SHAREHOLDER'S EQUITY
Accounts payable and
accrued
liabilities.......... $ 11,410
Current maturities of
other long-term
obligations.......... 270
--------
Total current
liabilities.......... 11,680
--------
Notes payable, less
current maturities... 34,000
10-1/4% Notes.......... 98,461
9-1/4% Notes........... 115,000
Other long-term
obligations, less
current maturities... 2,496
Deferred tax
liability............ 32,255
Exchangeable preferred
stock................ 112,965
Shareholder's equity:
Common stock and
additional paid-in
capital........... 137,648
Accumulated
deficit........... (21,852)
--------
$522,653
========
</TABLE>

- ---------------

(1) Reflects the discount to Prudential Securities Incorporated and BT Alex.
Brown Incorporated, the initial purchasers of the outstanding notes, and the
expenses of the offering of the outstanding notes.

34
<PAGE> 37

(2) Reflects the repayment of borrowings under Citadel Broadcasting's credit
facility.

In reviewing the information contained in the table above, you should note
the following:

(1) ADJUSTMENTS FOR PENDING ACQUISITIONS AND PENDING DISPOSITION. The data
in the Adjustments for Pending Acquisitions and Pending Disposition column
represent the net effect of the following transactions as if each had taken
place on September 30, 1998:

-- the acquisition of KQXL-FM, WXOK-AM, WEMX-FM, WKJN-FM, WIBR-AM in
Baton Rouge and KFXZ-FM, KRRQ-FM, KNEK-AM and KNEK-FM in
Lafayette,

-- the acquisition of WHYL-AM and WHYL-FM in Harrisburg/Carlisle,

-- the acquisition of WSSX-FM, WWWZ-FM, WMGL-FM, WSUY-FM, WNKT-FM,
WTMA-AM, WTMZ-AM and WXTC-AM in Charleston, WHWK-FM, WYOS-FM,
WAAL-FM, WNBF-AM and WKOP-AM in Binghamton, WMDH-FM and WMDH-AM
in Muncie and WWKI-FM in Kokomo, and

-- the disposition of KKTT-FM, KEHK-FM and KUGN-AM in Eugene,
KAKT-FM, KBOY-FM, KCMX-FM, KTMT-FM, KCMX-AM and KTMT-AM in
Medford, KEYW-FM, KORD-FM, KXRX-FM, KTHK-FM and KFLD-AM in
Tri-Cities, KCTR-FM, KKBR-FM, KBBB-FM, KMHK-FM and KBUL-AM in
Billings, WQKK-FM and WGLU-FM in Johnstown and WQWK-FM, WNCL-FM,
WRSC-AM and WBLF-AM in State College.

(2) ADJUSTMENTS FOR THE OFFERING OF OUTSTANDING 9 1/4% NOTES. The data in
the Adjustments for the Offering of Outstanding 9 1/4% Notes column represent
the issuance of the outstanding notes and the application of the net proceeds
from the offering of the outstanding notes.

35
<PAGE> 38

SELECTED HISTORICAL FINANCIAL DATA

Our selected historical financial data presented below as of and for each
of the years in the five-year period ended December 31, 1997 are derived from
our consolidated financial statements, which consolidated financial statements
have been audited by KPMG LLP, independent certified public accountants. Our
selected historical financial data presented below as of September 30, 1998 and
for the nine months ended September 30, 1997 and 1998 are derived from our
unaudited consolidated financial statements which, in the opinion of management,
contain all necessary adjustments of a normal recurring nature to present the
financial statements in accordance with generally accepted accounting
principles. Our consolidated financial statements as of December 31, 1996 and
1997 and for each of the years in the three-year period ended December 31, 1997
and the independent auditors' report on these financial statements, as well as
our unaudited consolidated financial statements as of September 30, 1998 and for
the nine months ended September 30, 1997 and 1998, are included elsewhere in
this prospectus. Our financial results are not comparable from year to year
because we acquired and disposed of various radio stations.

As you review the information contained in the following table, you should
note the following:

-- Cash Dividends. We have never declared cash dividends on our common
stock.

-- Net Loss Per Common Share. Basic and diluted net loss per common share
are the same for all periods presented due to our net losses.

The selected historical financial data below should be read in conjunction
with, and is qualified by reference to, our Consolidated Financial Statements
and related notes and the

36
<PAGE> 39

information contained in the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section included elsewhere in this
prospectus.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------------------- --------------------
1993 1994 1995 1996 1997 1997 1998
-------- -------- -------- -------- --------- --------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenue................................... $ 21,376 $ 32,998 $ 34,112 $ 45,413 $ 89,803 $ 60,025 $ 98,821
Station operating expenses.................... 17,081 24,331 26,832 33,232 65,245 43,306 69,412
Depreciation and amortization................. 5,245 7,435 4,891 5,158 14,636 9,563 20,005
Corporate general and administrative.......... 961 2,504 2,274 3,248 3,530 2,562 3,351
-------- -------- -------- -------- --------- --------- --------
Operating income (loss)....................... (1,911) (1,272) 115 3,775 6,392 4,594 6,053
Interest expense.............................. 2,637 4,866 5,242 6,155 12,304 8,214 13,590
Other income, net............................. 149 657 781 414 451 401 94
-------- -------- -------- -------- --------- --------- --------
Income (loss) before income taxes and
extraordinary item.......................... (4,399) (5,481) (4,346) (1,966) (5,461) (3,219) (7,443)
Income tax benefit............................ -- -- -- -- (770) (105) (1,163)
-------- -------- -------- -------- --------- --------- --------
Income (loss) before extraordinary item....... (4,399) (5,481) (4,346) (1,966) (4,691) (3,114) (6,280)
Extraordinary loss............................ -- -- -- (1,769) -- -- --
-------- -------- -------- -------- --------- --------- --------
Net income (loss)............................. $ (4,399) $ (5,481) $ (4,346) $ (3,735) $ (4,691) $ (3,114) $ (6,280)
Dividend requirement for exchangeable
preferred stock............................. -- -- -- -- 6,633 3,276 10,822
-------- -------- -------- -------- --------- --------- --------
Net loss applicable to common shares.......... $ (4,399) $ (5,481) $ (4,346) $ (3,735) $ (11,324) $ (6,390) $(17,102)
======== ======== ======== ======== ========= ========= ========
Net loss per common share..................... $ (110) $ (137) $ (109) $ (93) $ (283) $ (160) $ (428)
Shares used in per share calculation.......... 40,000 40,000 40,000 40,000 40,000 40,000 40,000
OTHER DATA:
Broadcast cash flow........................... $ 4,295 $ 8,667 $ 7,280 $ 12,181 $ 24,558 $ 16,719 $ 29,409
EBITDA........................................ 3,334 6,163 5,006 8,933 21,028 14,157 26,058
Net cash provided by (used in) operating
activities.................................. 361 324 (434) (1,394) 5,543 4,137 3,946
Net cash provided by (used in) investing
activities.................................. (10,818) (14,037) 4,810 (61,168) (211,622) (133,350) (39,350)
Net cash provided by (used in) financing
activities.................................. 10,070 14,393 (4,908) 63,145 212,176 154,324 35,127
Capital expenditures.......................... 679 2,857 1,691 2,038 2,070 1,478 1,747
Deficiency of earnings to fixed charges....... 4,399 5,481 4,346 1,966 12,094 6,495 18,265
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------- SEPTEMBER 30,
1993 1994 1995 1996 1997 1998
-------- -------- -------- -------- --------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.................... $ 857 $ 1,538 $ 1,005 $ 1,588 $ 7,685 $ 7,407
Working capital (deficiency)................. 1,701 3,382 2,928 (4,195) 22,593 31,057
Intangible assets, net....................... 17,454 20,080 15,093 51,802 268,690 290,405
Total assets................................. 36,120 46,397 37,372 102,244 344,172 373,353
Long-term debt (including current portion)... 30,468 47,805 43,046 91,072 189,699 118,480
Exchangeable preferred stock................. -- -- -- -- 102,010 112,965
Shareholder's equity (deficit)............... 3,492 (4,782) (9,249) 5,999 16,132 105,204
</TABLE>

37
<PAGE> 40

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

GENERAL

The following discussion and analysis should be read in conjunction with
the information contained in the "Selected Historical Financial Data" section
and Citadel Broadcasting's Consolidated Financial Statements and related notes
included elsewhere in this prospectus. Except for the historical information
contained in this prospectus, the discussions in this prospectus contain
forward-looking statements that involve risks and uncertainties. Citadel
Broadcasting's actual results could differ materially from those discussed in
this prospectus. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below and in the section
entitled "Risk Factors," as well as those discussed elsewhere in this
prospectus.

The principal source of Citadel Broadcasting's revenue is the sale of
broadcasting time on its radio stations for advertising. As a result, Citadel
Broadcasting's revenue is affected primarily by the advertising rates its radio
stations charge. Correspondingly, the rates are based upon a station's ability
to attract audiences in the demographic groups targeted by its advertisers, as
measured principally by periodic Arbitron Radio Market Reports. The number of
advertisements that can be broadcast without jeopardizing listening levels, and
the resulting ratings, is limited in part by the format of a particular station.
Each of Citadel Broadcasting's stations has a general pre-determined level of
on-air inventory that it makes available for advertising, which may be different
at different times of the day and tends to remain stable over time. Much of
Citadel Broadcasting's selling activity is based on demand for its radio
stations' on-air inventory and, in general, Citadel Broadcasting responds to
this demand by varying prices rather than by changing the available inventory.

In the broadcasting industry, radio stations often utilize trade (or
barter) agreements to exchange advertising time for goods or services, such as
other media advertising, travel or lodging, in lieu of cash. In order to
preserve most of its on-air inventory for cash advertising, Citadel Broadcasting
generally enters into trade agreements only if the goods or services bartered to
it will be used in its business. Citadel Broadcasting has minimized its use of
trade agreements and has generally sold over 90% of its advertising time for
cash. In addition, it is Citadel Broadcasting's general policy not to preempt
advertising spots paid for in cash with advertising spots paid for in trade.

In 1997, Citadel Broadcasting's radio stations derived approximately 84.7%
of their net broadcasting revenue from local and regional advertising in the
markets in which they operate, and the remainder resulted principally from the
sale of national advertising. Local and regional advertising is sold primarily
by each station's sales staff. To generate national advertising sales, Citadel
Broadcasting engages a national advertising representative firm. Citadel
Broadcasting believes that the volume of national advertising revenue tends to
adjust to shifts in a station's audience share position more rapidly than does
the volume of local and regional advertising revenue. Therefore, Citadel
Broadcasting focuses on sales of local and regional advertising. During the year
ended December 31, 1997 and the nine months ended September 30, 1998, no single
advertiser accounted for more than 9.2% of the net revenue of any of Citadel
Broadcasting's station groups or more than 1.4% of total net revenue of Citadel
Broadcasting.

Citadel Broadcasting's quarterly revenue varies throughout the year, as is
typical in the radio broadcasting industry. Citadel Broadcasting's first
calendar quarter typically produces

38
<PAGE> 41

the lowest revenue for the year, and the second and fourth calendar quarters
generally produce the highest revenue for the year. The advertising revenue of
Citadel Broadcasting is typically collected within 120 days of the date on which
the related advertising is aired and its corresponding revenue is recognized.
Most accrued expenses, however, are paid within 45 to 60 days. As a result of
this time lag, working capital requirements have increased as Citadel
Broadcasting has grown and will likely increase further in the future.

The primary operating expenses incurred in the ownership and operation of
radio stations include employee salaries and commissions, programming expenses
and advertising and promotion expenses. Citadel Broadcasting also incurs and
will continue to incur significant depreciation, amortization and interest
expense as a result of completed and future acquisitions of stations and
existing and future borrowings. Citadel Broadcasting's consolidated financial
statements tend not to be directly comparable from period to period due to
Citadel Broadcasting's acquisition activity.

Historically and on a pro forma basis, Citadel Broadcasting has generated
net losses primarily as a result of significant charges for depreciation and
amortization relating to the acquisition of radio stations and interest charges
on outstanding debt. Citadel Broadcasting amortizes FCC licenses and goodwill
attributable to the acquisition of radio stations over a fifteen-year period.
Based upon the large number of acquisitions that were consummated within the
last two years, Citadel Broadcasting anticipates that depreciation and
amortization charges will continue to be significant for several years. To the
extent that Citadel Broadcasting completes additional acquisitions, its
depreciation and amortization charges are likely to increase. Citadel
Broadcasting expects that it will continue to incur net losses through at least
1999.

Citadel Broadcasting's financial results are dependent on a number of
factors, including the general strength of the local and national economies,
population growth, ability to provide popular programming, local market and
regional competition, relative efficiency of radio broadcasting compared to
other advertising media, signal strength and government regulation and policies.

Citadel Broadcasting consolidates the operations of stations operated under
local marketing agreements. The Emerging Issues Task Force, a division of the
Financial Accounting Standards Board, is reviewing the accounting method for
contractual management arrangements and may determine that consolidation is
appropriate only if certain requirements for controlling financial interest are
met. The provisions of Citadel Broadcasting's existing local marketing
agreements do not meet the proposed control requirements, thus if the Emerging
Issues Task Force proposal is approved as drafted, consolidation of stations
operated under local marketing agreements may no longer be appropriate.

Broadcast cash flow consists of operating income (loss) before
depreciation, amortization and corporate expenses. EBITDA consists of operating
income (loss) before depreciation and amortization. Although broadcast cash flow
and EBITDA are not measures of performance calculated in accordance with
generally accepted accounting principles, management believes that they are
useful to an investor in evaluating Citadel Broadcasting because they are
measures widely used in the broadcasting industry to evaluate a radio company's
operating performance. However, broadcast cash flow and EBITDA should not be
considered in isolation or as substitutes for net income, cash flows from
operating activities and other income or cash flow statement data prepared in
accordance with generally accepted accounting principles as a measure of
liquidity or profitability.

39
<PAGE> 42

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1997

Net Broadcasting Revenue. Net broadcasting revenue increased $38.8 million
or 64.7% to $98.8 million for the nine months ended September 30, 1998 from
$60.0 million for the nine months ended September 30, 1997. The inclusion of
revenue from the acquisitions of radio stations and revenue generated from local
marketing agreements and joint sales agreements entered into during 1997 and
1998 provided $32.6 million of the increase. For stations owned and operated
over the comparable period in 1997 and 1998, net broadcasting revenue improved
$6.2 million or 12.7% to $54.9 million in 1998 from $48.7 million in 1997,
primarily due to increased ratings and improved selling efforts.

Station Operating Expenses. Station operating expenses increased $26.1
million or 60.3% to $69.4 million for the nine months ended September 30, 1998
from $43.3 million for the nine months ended September 30, 1997. The increase
was primarily attributable to the inclusion of station operating expenses of the
radio station acquisitions and the local marketing agreements and joint sales
agreements entered into during 1997 and 1998.

Broadcast Cash Flow. As a result of the factors described above, broadcast
cash flow increased $12.7 million or 76.0% to $29.4 million for the nine months
ended September 30, 1998 from $16.7 million for the nine months ended September
30, 1997. As a percentage of net broadcasting revenue, broadcast cash flow
improved to 29.8% for the nine months ended September 30, 1998 compared to 27.8%
for the nine months ended September 30, 1997.

Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased $0.8 million or 30.8% to $3.4 million for the
nine months ended September 30, 1998 from $2.6 million for the nine months ended
September 30, 1997. The increase was due primarily to an increase in staffing
levels needed to support Citadel Broadcasting's growth.

EBITDA. As a result of the factors described above, EBITDA increased $11.9
million or 83.8% to $26.1 million for the nine months ended September 30, 1998
from $14.2 million for the nine months ended September 30, 1997.

Depreciation and Amortization. Depreciation and amortization expense
increased $10.4 million or 108.3% to $20.0 million for the nine months ended
September 30, 1998 from $9.6 million for the nine months ended September 30,
1997, primarily due to radio station acquisitions completed during 1997 and
1998.

Interest Expense. Interest expense increased approximately $5.4 million or
65.9% to $13.6 million for the nine months ended September 30, 1998 from $8.2
million for the nine months ended September 30, 1997, primarily due to interest
expense associated with additional borrowings to fund acquisitions completed in
1997 and 1998, offset by a repayment of the borrowings in the third quarter of
1998 from the proceeds of Citadel Communications' initial public offering.

Net Loss. As a result of the factors described above, net loss increased
$3.2 million or 103.2% to $6.3 million for the nine months ended September 30,
1998 from $3.1 million for the nine months ended September 30, 1997.

40
<PAGE> 43

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

Net Broadcasting Revenue. Net broadcasting revenue increased $44.3 million
or 97.7% to $89.8 million in 1997 from $45.4 million in 1996. The inclusion of
net revenue from the acquisitions of radio stations and net revenue generated
from local marketing agreements and joint sales agreements entered into during
1997 provided $41.8 million of the increase. For stations owned and operated
over the comparable period in 1997 and 1996, net broadcasting revenue improved
approximately $2.5 million or 6.7% to $40.7 million in 1997 from $38.2 million
in 1996 primarily due to increased ratings and improved selling efforts.

Station Operating Expenses. Station operating expenses increased $32.0
million or 96.3% to $65.2 million in 1997 from $33.2 million in 1996. The
increase was primarily attributable to the inclusion of station operating
expenses of the radio station acquisitions and the local marketing agreements
and joint sales agreements entered into during 1997.

Broadcast Cash Flow. As a result of the factors described above, broadcast
cash flow increased $12.4 million or 101.6% to $24.6 million in 1997 from $12.2
million in 1996. As a percentage of net broadcasting revenue, broadcast cash
flow increased to 27.3% in 1997 from 26.8% in 1996.

Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased $0.3 million or 8.7% to $3.5 million in 1997
from $3.2 million in 1996. The increase is due primarily to an increase in
staffing levels required to support Citadel Broadcasting's growth through
acquisitions.

EBITDA. As a result of the factors described above, EBITDA increased $12.1
million or 135.4% to $21.0 million in 1997 from $8.9 million in 1996.

Depreciation and Amortization. Depreciation and amortization expense
increased $9.5 million or 183.8% to $14.6 million in 1997 from $5.2 million in
1996, primarily due to radio station acquisitions completed during 1997.

Interest Expense. Interest expense increased $6.1 million or 99.9% to $12.3
million in 1997 from $6.2 million in 1996, primarily due to interest expense
associated with additional borrowings to fund acquisitions completed during
1997.

Net Loss. As a result of the factors described above, net loss increased
$1.0 million or 25.6% to $4.7 million in 1997 from $3.7 million in 1996.
Included in the net loss for 1996 is a $1.8 million extraordinary loss related
to the repayment of long-term debt.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Net Broadcasting Revenue. Net broadcasting revenue increased $11.3 million
or 33.1% to $45.4 million in 1996 from $34.1 million in 1995. The inclusion of
revenue from the acquisitions of radio stations and revenue generated from local
marketing agreements and joint sales agreements entered into during 1996
provided $7.8 million of the increase. For stations owned and operated over the
comparable period in 1995 and 1996, net broadcasting revenue improved $3.5
million or 11.4% to $34.2 million in 1996 from $30.6 million in 1995 primarily
due to increased ratings and improved selling efforts.

Station Operating Expenses. Station operating expenses increased $6.4
million or 23.9% to $33.2 million in 1996 from $26.8 million in 1995. The
increase was primarily attributable to the inclusion of station operating
expenses of the radio station acquisitions and the local marketing agreements
and joint sales agreements entered into during 1996.

41
<PAGE> 44

Broadcast Cash Flow. As a result of the factors described above, broadcast
cash flow increased $4.9 million or 67.1% to $12.2 million in 1996 from $7.3
million in 1995. As a percentage of net broadcasting revenue, broadcast cash
flow increased to 26.8% in 1996 from 21.4% in 1995.

Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased $0.9 million or 39.1% to $3.2 million in 1996
from $2.3 million in 1995. Substantially all of the increase was due to
professional expenses incurred in 1996 related to Citadel Broadcasting's capital
raising activities and a lawsuit between Citadel Broadcasting and Tele-Media
Broadcasting Company and certain of its shareholders and officers which arose in
connection with Tele-Media's decision not to complete a sale of its radio
stations to Citadel Broadcasting pursuant to a 1995 agreement. In connection
with Citadel Broadcasting's acquisition of Tele-Media, the litigation was
settled.

EBITDA. As a result of the factors described above, EBITDA increased $3.9
million or 78.0% to $8.9 million in 1996 from $5.0 million in 1995.

Depreciation and Amortization. Depreciation and amortization expense
increased $0.3 million or 6.1% to $5.2 million in 1996 from $4.9 million in
1995, primarily due to radio station acquisitions completed during 1996.

Interest Expense. Interest expense increased $1.0 million or 19.2% to $6.2
million in 1996 from $5.2 million in 1995, primarily due to interest expense
associated with additional borrowings to fund acquisitions completed during
1996.

Net Loss. As a result of the factors described above, net loss decreased
$0.6 million or 14.1% to $3.7 million in 1996 from $4.3 million in 1995.
Included in the net loss for 1996 is $0.4 million of interest earned on loans
advanced by Citadel Broadcasting to Deschutes River Broadcasting, Inc. prior to
the acquisition of Deschutes by Citadel Broadcasting and a $1.8 million
extraordinary loss related to the repayment of long-term debt.

LIQUIDITY AND CAPITAL RESOURCES

Net Cash Provided By Operations. For the nine months ended September 30,
1998, net cash provided by operations decreased to $3.9 million from $4.1
million for the comparable 1997 period primarily due to increases in accounts
receivable, prepaid expenses and accounts payable, offset by decreases in other
assets and accrued liabilities. Net cash provided by operations increased to
$5.5 million in 1997 from $1.4 million in 1996. The increase was primarily due
to an increase in amortization and depreciation as a result of acquisitions.

Net Cash Used in Investing Activities. For the nine months ended September
30, 1998, net cash used in investing activities decreased to $39.4 million from
$133.3 million in the comparable 1997 period. Net cash used in investing
activities in 1997 was $211.6 million, compared to $61.2 million in 1996. Net
cash used in investing activities was used primarily to acquire stations.

Net Cash Provided By Financing Activities. For the nine months ended
September 30, 1998, net cash provided by financing activities was $35.1 million
compared to $154.3 million in the comparable 1997 period. This decrease is the
result of the use of proceeds from Citadel Communications' initial public
offering to repay indebtedness in 1998 while the proceeds from the 1997
offerings of Citadel's Broadcasting's 10-1/4% Senior Subordinated Notes and
13-1/4% Exchangeable Preferred Stock were used for acquisitions and operations,
as well as for the repayment of indebtedness. The decrease was offset by
increased borrowings in the 1998 period. Net cash provided by financing
activities in 1997 was $212.2 million,

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<PAGE> 45

primarily from the proceeds of the 1997 offerings of the 10-1/4% notes and the
exchangeable preferred stock, compared to $63.1 million in 1996.

Principal Liquidity Requirements. Citadel Broadcasting's principal
liquidity requirements are for acquisition financing, debt service, working
capital and general corporate purposes, including capital expenditures. Citadel
Broadcasting's acquisition strategy has required, and will continue in the
foreseeable future to require, a significant portion of Citadel Broadcasting's
capital resources. Citadel Broadcasting expects that its debt service and
capital expenditure obligations within the next twelve months will include
approximately $10.6 million for interest on the notes, approximately $10.4
million for interest on the 10-1/4% notes and approximately $3.5 million for
capital expenditures. The exchangeable preferred stock does not require cash
dividends through July 1, 2002. Citadel Broadcasting expects the funds for debt
service obligations and capital expenditures to be provided from operations.

Citadel Broadcasting and Citadel Communications have financed Citadel
Broadcasting's past acquisitions through bank borrowings, sales of equity and
debt securities, internally generated funds and proceeds from asset sales.
Citadel Broadcasting intends to use a portion of the remaining net proceeds of
the offering of the outstanding notes to pay a portion of the purchase price of
the pending acquisitions of radio stations in Baton Rouge and Lafayette and
Harrisburg/Carlisle. Citadel Broadcasting expects that financing for other
future acquisitions will be provided through bank borrowings, the sale of debt
and equity securities and internally generated funds.

Credit Facility. At September 30, 1998, Citadel Broadcasting had $18.7
million outstanding under its credit facility. Citadel Broadcasting used a
portion of the net proceeds of the offering of the outstanding notes to repay
all outstanding borrowings under the credit facility. The credit facility
provides for revolving borrowings of up to $137.5 million.

The credit facility restricts the ability of Citadel Broadcasting's wholly
owned subsidiary Citadel License, Inc. to pay cash dividends or make other
distributions in respect of its capital stock. Citadel Broadcasting is not
dependent in any material respect on the receipt of dividends or other payments
from Citadel License. The credit facility also contains other customary
restrictive covenants, which, among other things, and with certain exceptions,
limit the ability of Citadel Broadcasting and Citadel License to incur
additional indebtedness and liens, enter into transactions with affiliates,
consolidate, merge or effect asset sales, issue additional stock, make capital
or overhead expenditures, make investments, loans or prepayments or change the
nature of their business. Citadel Broadcasting and Citadel License are also
required to satisfy financial covenants, which require Citadel Broadcasting and
Citadel License to maintain specified financial ratios and to comply with
financial tests, such as ratios for maximum leverage, senior debt leverage,
minimum interest coverage and minimum fixed charges.

-- Maximum Leverage Test. The maximum leverage test requires that
Citadel Broadcasting and Citadel License not permit the ratio of
total debt as of the last day of any month to operating cash flow,
as adjusted for permitted acquisitions and dispositions, for the
twelve-month period ending as of the last day of that month to be
greater than the applicable ratio on that date. The applicable
ratio through May 1999 is 6.00. For each six-month period
thereafter through maturity, the applicable ratio shall decrease by
0.25.

-- Senior Debt Leverage Test. The senior debt leverage test requires
that Citadel Broadcasting and Citadel License not permit the ratio
of the unpaid principal balance of the credit facility or any
specified portion thereof outstanding from
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<PAGE> 46

time to time as of the last day of any month to operating cash
flow, as adjusted for permitted acquisitions and dispositions, for
the twelve-month period ending on that date to be greater than 4.50
for the period through May 1999. For each six-month period after
May 1999 through maturity, the maximum ratio shall decrease by
0.25.

-- Minimum Interest Coverage Test. The minimum interest coverage test
requires that Citadel Broadcasting and Citadel License not permit
the ratio of their consolidated operating cash flow for any
four-quarter period to interest expense and cash dividends on
Citadel Broadcasting's exchangeable preferred stock for the same
four-quarter period to be less than 2.25.

-- Minimum Fixed Charges Test. The minimum fixed charges test requires
that Citadel Broadcasting and Citadel License not permit the ratio
of their consolidated operating cash flow for any four-quarter
period to fixed charges for the same four-quarter period to be less
than 1.1 to 1.0.

Citadel Broadcasting and Citadel License are in compliance with the
financial ratios and financial condition tests in their debt obligations.

Other Indebtedness and Exchangeable Preferred Stock. The documents
governing Citadel Broadcasting's other indebtedness and the terms of the
exchangeable preferred stock also contain covenants that restrict Citadel
Broadcasting from taking various actions, including, subject to specified
exceptions, the incurrence of additional indebtedness, the granting of
additional liens, the making of investments, the payment of dividends and other
restricted payments, mergers, acquisitions and other fundamental corporate
changes, capital expenditures and transactions with affiliates.

Additional Capital Resources. Management believes that cash from operating
activities, borrowings under its credit facility and the remaining net proceeds
of the offering of the outstanding notes should be sufficient to permit Citadel
Broadcasting to meet its financial obligations and to fund its operations for at
least the next twelve months. However, Citadel Broadcasting may require
additional capital resources in connection with the further implementation of
its acquisition strategy.

Year 2000 Matters. The Year 2000 computer issue primarily results from the
fact that information technology hardware and software systems and other
non-information technology products containing embedded microchip processors
were originally programmed using a two digit format, as opposed to four digits,
to indicate the year. Such programming will be unable to interpret dates beyond
the year 1999, which could cause system and product failure, other computer
errors and a disruption in the operation of such systems and products.

Citadel Broadcasting's project team has identified its accounting and
traffic systems, satellite delivered programming, digital automation systems and
internet service provider systems as the mission critical systems to evaluate
for Year 2000 compliance. In addition, while there are several software programs
currently used throughout Citadel Broadcasting's operations which are not Year
2000 compliant, the vendors of this software have committed to provide Year 2000
compliant updates to Citadel Broadcasting. Citadel Broadcasting expects to have
all such updates tested and operational by June 1999.

Citadel Broadcasting has identified five phases for the project team to
address for each of Citadel Broadcasting's risk areas. These phases are:

(1) an inventory of Citadel Broadcasting's systems described above,

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<PAGE> 47

(2) assessment of the systems to determine the risk and apparent extent of
Year 2000 problems,

(3) remediation of identified problems,

(4) testing of systems for Year 2000 readiness, and

(5) contingency planning for the worst-case scenarios.

Inventories have been completed for all mission critical company software
applications and hardware systems, and Citadel Broadcasting expects to complete
an inventory of at-risk non-information technology systems in the first quarter
of 1999. The project team is currently assessing compliance issues related to
Citadel Broadcasting's information hardware and software, and expects to
complete such assessment in the first quarter of 1999. Citadel Broadcasting
expects that some amount of the testing will be performed during this assessment
phase.

In each of its markets, Citadel Broadcasting employs centralized accounting
and traffic (advertising scheduling) systems for all of its stations in the
market. In September 1998, Citadel Broadcasting completed the replacement and
upgrading of software certified as Year 2000 compliant by the software vendor.
Citadel Broadcasting intends to complete Year 2000 testing of this software in
the first quarter of 1999. The total cost of the software upgrade was $0.3
million. In connection with the software upgrade, much of the accounting and
traffic hardware systems were also upgraded or replaced. The total cost of the
hardware upgrade was $0.1 million. Citadel Broadcasting anticipates that
evaluation for Year 2000 compliance of the hardware and the new software used in
its accounting and traffic systems for the stations currently owned by Citadel
Broadcasting will be completed during the first quarter of 1999. Citadel
Broadcasting expects that the accounting and traffic systems for stations that
it may acquire will be converted to the software used for its other stations.
The cost of any necessary hardware upgrades for these systems for stations
acquired cannot be quantified at this time.

Satellite delivered programs, which are delivered to Citadel Broadcasting's
radio stations from outside sources, represent a third party risk to Citadel
Broadcasting arising from the Year 2000 issue. Citadel Broadcasting sent
questionnaires to a majority of the vendors of these programs during the fourth
quarter of 1998 asking them to update Citadel Broadcasting on the status of
their Year 2000 compliance. Citadel Broadcasting anticipates that it will send
such questionnaires to the significant vendors of satellite delivered programs
to stations it acquires. Until those questionnaires are returned and reviewed,
Citadel Broadcasting is unable to determine the potential for disruption in its
programming arising from this third party risk. If Citadel Broadcasting does not
receive reasonable assurances regarding Year 2000 compliance from any vendor of
these programs, it would then develop contingency plans for alternative
programming.

Citadel Broadcasting is currently reviewing a proposal to update and expand
the digital automation systems used in Citadel Broadcasting's operations.
Although not directly related to the Year 2000 problem, Citadel Broadcasting
believes the expansion and replacement of these systems, which it anticipates
would be completed by the end of June 1999, would minimize or eliminate Year
2000 problems associated with these systems. If Citadel Broadcasting elects not
to pursue such expansion, it anticipates that the total cost of replacing the
non-compliant digital components in its current digital automation systems would
be approximately $0.5 million and that the replacement would be completed by the
end of June

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<PAGE> 48

1999. The cost of replacing non-compliant digital components at stations that
may be acquired by Citadel Broadcasting cannot be quantified at this time.

Citadel Broadcasting recently completed an expansion of its internet
service provider division. All mission critical elements of such division are
certified Year 2000 compliant by the software and hardware vendors. Citadel
Broadcasting expects to conduct testing of such software and hardware during the
first quarter of 1999. No material expansion is scheduled for this division
prior to the year 2000.

In addition to identification of these mission critical systems, Citadel
Broadcasting has identified the top 10 advertisers on each of its current radio
stations. Questionnaires were sent to each of these advertisers during the
fourth quarter of 1998 asking them to update Citadel Broadcasting on the status
of their Year 2000 compliance. Citadel Broadcasting intends to send such
questionnaires to the top 10 advertisers on each of the radio stations it
acquires. In addition, questionnaires are also being sent to various equipment
vendors, banks and other lending institutions that provide substantial products
and services to Citadel Broadcasting. Until the questionnaires are returned and
reviewed, Citadel Broadcasting is unable to determine the effect of these third
party risks on Citadel Broadcasting's operations. There can be no assurance that
Citadel Broadcasting will be successful in finding alternative Year 2000
compliant advertisers, suppliers and service providers, if required.

Citadel Broadcasting also intends to solicit information regarding its
critical internal non-information technology systems such as telephones and HVAC
prior to March 31, 1999. Any required remediation and testing of Citadel
Broadcasting's non-information technology systems at its current stations is
expected to be completed by June 1999. Citadel Broadcasting intends to promptly
extend this inquiry to stations it acquires.

Citadel Broadcasting is in the process of determining its contingency
plans, which are expected to include the identification of Citadel
Broadcasting's most reasonably likely worst-case scenarios. Preliminary
contingency plans are expected to be completed during the first quarter of 1999
and comprehensive plans are expected to be completed by the second or third
quarter of 1999. At this time, Citadel Broadcasting does not have sufficient
information to assess the likelihood of such worst-case scenarios. Currently,
Citadel Broadcasting believes that the most reasonably likely sources of risk to
it include (1) disruptions in the supply of satellite delivered programs and (2)
diminished demand for advertising time arising from Year 2000 problems both
specific to Citadel Broadcasting's advertisers or more generally related to the
potential for economic disruptions related to the Year 2000 issues.

Based on its current assessment efforts, Citadel Broadcasting does not
believe that Year 2000 issues related to its internal systems will have a
material adverse effect on Citadel Broadcasting's financial condition or results
of operations. However, as described above, the failure by third parties to be
Year 2000 ready could have a material adverse effect on Citadel Broadcasting.

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<PAGE> 49

BUSINESS
GENERAL

Citadel Broadcasting is a radio broadcasting company that focuses on
acquiring, developing and operating radio stations in mid-sized markets. Upon
completion of the transactions described in the "The Pending Transactions"
section, Citadel Broadcasting will own or operate 76 FM and 39 AM radio stations
in 20 markets, including clusters of four or more stations in 15 markets, and
will have the right to construct one additional FM station.

Citadel Broadcasting's primary strategy is to secure and maintain a
leadership position in the markets it serves and to expand into additional
mid-sized markets where it believes a leadership position can be obtained. Upon
entering a market, Citadel Broadcasting seeks to acquire stations which, when
integrated with its existing operations, allow it to reach a wider range of
demographic groups that appeal to advertisers, increase revenue and achieve
substantial cost savings.

Citadel Broadcasting believes that mid-sized markets represent attractive
opportunities because, as compared to the 50 largest markets in the United
States, they are generally characterized by:

-- lower radio station purchase prices as a multiple of broadcast cash
flow,

-- fewer sophisticated and well-capitalized competitors, including both
radio and competing advertising media such as newspapers and
television, and

-- less direct format competition due to the smaller number of stations
in any given market.

Citadel Broadcasting believes that the attractive operating characteristics
of mid-sized markets coupled with the opportunity to establish or expand
in-market radio station groups create the potential for substantial revenue
growth and cost efficiencies. As a result, management seeks to achieve broadcast
cash flow margins that are comparable to the higher margins that historically
were generally achievable only in the 50 largest markets.

Citadel Broadcasting's portfolio of stations is diversified in terms of
format, target demographics and geographic location. Because of the size of its
portfolio and its individual radio station groups, Citadel Broadcasting believes
it is not unduly reliant upon the performance of any single station. Citadel
Broadcasting also believes that the diversity of its portfolio of radio stations
helps insulate Citadel Broadcasting from downturns in specific markets and
changes in format preferences.

CORPORATE HISTORY AND RECENTLY COMPLETED TRANSACTIONS

Citadel Broadcasting was incorporated in Nevada in 1991, and in 1992 it
acquired all of the radio stations then owned or operated by Citadel Associates
Limited Partnership and Citadel Associates Montana Limited Partnership and
certain other radio stations. Lawrence R. Wilson, Chief Executive Officer of
Citadel Broadcasting, was a co-founder and one of the two general partners of
Citadel Associates Limited Partnership and Citadel Associates Montana Limited
Partnership. In 1993, Citadel Communications was incorporated and Citadel
Broadcasting was reorganized as a wholly owned subsidiary of Citadel
Communications. Citadel Communications currently owns all of the issued and
outstanding common stock of Citadel Broadcasting. Citadel Broadcasting acquired
ownership of additional radio stations in each of 1993, 1994, 1996, 1997, 1998
and 1999.

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<PAGE> 50

Citadel License holds Citadel Broadcasting's radio broadcast licenses and
does not conduct any independent business operations.

In various transactions completed since January 1, 1997, Citadel
Broadcasting has acquired ownership of, or the right to operate, in 17 markets
an aggregate of 81 stations, the right to construct an additional station and
certain related assets, including various Internet access service providers, for
an aggregate purchase price of approximately $309.8 million, including amounts
paid by Citadel Communications. Citadel Broadcasting has sold in three markets
an aggregate of six stations for an aggregate sale price of approximately $3.0
million.

On July 3, 1997, Citadel Broadcasting sold $101.0 million principal amount
of its 10-1/4% notes and 1.0 million shares of its exchangeable preferred stock
which, subject to various conditions, at the option of Citadel Broadcasting, are
exchangeable into Citadel Broadcasting's 13-1/4% Subordinated Exchange
Debentures due 2009.

On July 7, 1998, Citadel Communications completed an initial public
offering of 6,880,796 shares of its common stock, at $16.00 per share. Of such
shares, Citadel Communications sold 6,250,000 shares and several stockholders of
Citadel Communications sold 630,796 shares. On July 14, 1998, Citadel
Communications sold 1,032,119 additional shares when the underwriters exercised
their over-allotment option. The aggregate net proceeds to Citadel
Communications were approximately $106.9 million, which were used to repay a
portion of the outstanding indebtedness under the credit facility. Citadel
Communications did not receive any of the proceeds from the sale of shares by
the selling stockholders.

On November 19, 1998, Citadel Broadcasting sold $115.0 million principal
amount of the outstanding 9-1/4% notes in order to finance several acquisitions,
repay indebtedness under the credit facility and provide cash for working
capital purposes.

OPERATING STRATEGY

In order to maximize its radio stations' appeal to advertisers, and thus
its revenue and cash flow, Citadel Broadcasting has implemented the strategies
described below. Citadel Broadcasting intends to continue to expand its existing
strategies and to develop new methods to enhance revenue and reduce costs.

Ownership of Strong Station Groups. Citadel Broadcasting seeks to secure
and maintain a leadership position in the markets it serves by owning multiple
stations in those markets. By strategically coordinating programming,
promotional and selling strategies among a group of local stations, Citadel
Broadcasting attempts to capture a wide range of demographic listener groups
which appeal to advertisers. Citadel Broadcasting believes that the
diversification of its programming formats and its collective inventory of
available advertising time strengthen relationships with advertisers and
increase Citadel Broadcasting's ability to maximize the value of its inventory.
Citadel Broadcasting believes that having multiple stations in a market also
enhances its ability to market the advantages of radio advertising versus other
advertising media, such as newspapers and television, thus potentially
increasing radio's share of the total advertising dollars spent in a given
market.

Citadel Broadcasting believes that its ability to leverage the existing
programming and sales resources of its station groups enables it to enhance the
growth potential of both new and underperforming stations while reducing the
risks associated with undertaking means of

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<PAGE> 51

improving station performance, including launching new formats. Citadel
Broadcasting also believes that operating leading station groups allows it to
attract and retain talented local management teams, on-air personalities and
sales personnel, which it believes are essential to operating success.
Furthermore, Citadel Broadcasting seeks to achieve substantial cost savings
through the consolidation in each of its markets of facilities, management,
sales and administrative, personnel and operating resources, such as on-air
talent, programming and music research, and through the reduction of other
redundant expenses.

Aggressive Sales and Marketing. Citadel Broadcasting seeks to maximize its
share of local advertising revenue in each of its markets through various sales
and marketing initiatives. Citadel Broadcasting provides extensive training for
its sales personnel through in-house sales and time management programs, and it
retains various independent consultants who hold frequent seminars for, and are
available for consultation with, its sales personnel. Citadel Broadcasting also
emphasizes regular, informal exchanges of ideas among its management and sales
personnel across its various markets. Because advertising time is perishable,
Citadel Broadcasting seeks to maximize its revenue by utilizing sophisticated
inventory management techniques that allow it to provide its sales personnel
with frequent price adjustments based on regional and local market conditions.
To further strengthen its relationship with advertisers, Citadel Broadcasting
also offers and markets its ability to create customer traffic through on-site
events staged at, and broadcast from, the advertisers' business locations.
Citadel Broadcasting believes that, prior to their acquisition by Citadel
Broadcasting, many of its acquired stations had underperformed in sales, due
primarily to undersized sales staffs responsible for selling inventory on
multiple stations. Accordingly, Citadel Broadcasting has significantly expanded
the sales forces of many of its acquired stations.

Targeted Programming. To maintain or improve its position in each market,
Citadel Broadcasting conducts extensive market research and competitive analyses
in order to identify significant and sustainable target audiences. Citadel
Broadcasting then tailors the programming, marketing and promotion of each
station to maximize its appeal to its target audience. Within each market,
Citadel Broadcasting attempts to build strong franchises by:

-- creating distinct, highly visible profiles for its on-air
personalities, particularly those broadcasting during morning drive
time traditionally between 6:00 a.m. and 10:00 a.m.,

-- formulating recognizable brand names for select stations such as
the "Bull" and "Cat Country," and

-- actively participating in community events and charities.

Decentralized Operations. Citadel Broadcasting believes that radio is
primarily a local business and that much of its success is the result of the
efforts of regional and local management and staff. Accordingly, Citadel
Broadcasting decentralizes much of its operations to these levels. Each of
Citadel Broadcasting's regional and local station groups is managed by a team of
experienced broadcasters who understand the musical tastes, demographics and
competitive opportunities of the particular market. Regional and local managers
are responsible for preparing annual operating budgets and a portion of their
compensation is linked to meeting or surpassing their operating targets.
Corporate management approves each station group's annual operating budget and
imposes strict financial reporting requirements to track station performance.
Corporate management is responsible for long range planning, establishing
corporate policies and serving as a resource to local management. Citadel

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Broadcasting has implemented local sales reporting systems at each station to
provide local and corporate management with daily sales information.

ACQUISITION STRATEGY

In February 1996, as a result of the passage of the Telecommunications Act
of 1996, radio broadcasting companies were permitted to increase their ownership
of stations within a single market from four to a maximum of between five and
eight stations, depending on market size. The Telecommunications Act of 1996
also eliminated the national ownership restriction that generally had limited
companies to the ownership of no more than 40 stations (20 AM and 20 FM)
throughout the United States.

Citadel Broadcasting's acquisition strategy is focused on acquiring
additional radio stations in both its existing markets and in new markets in
which Citadel Broadcasting believes it can effectively use its operating
strategies. Citadel Broadcasting anticipates that it will continue to focus on
mid-sized markets rather than attempt to expand into larger markets. Although
competition among potential purchasers for suitable radio station acquisitions
is intense throughout the United States, Citadel Broadcasting believes that less
competition exists, particularly from the larger radio operators, in mid-sized
markets. This affords Citadel Broadcasting relatively more attractive
acquisition opportunities in these markets. There can be no assurance, however,
that Citadel Broadcasting will be able to identify suitable and available
acquisition opportunities or that it will be able to complete any such
acquisition opportunities. Additional risks and uncertainties related to Citadel
Broadcasting's acquisition strategy are discussed under "Risk
Factors--Limitations on Acquisition Strategy" and "Risk Factors--Potential
Difficulties in Completing Pending and Future Transactions Due to Antitrust
Review."

In evaluating acquisition opportunities in new markets, Citadel
Broadcasting assesses its potential to build leading radio station groups in
those markets over time. Citadel Broadcasting believes that the creation of
strong station groups in local markets is essential to its operating success and
generally will not consider entering a new market unless it believes it can
acquire multiple stations in the market. Citadel Broadcasting also analyzes a
number of additional factors which it believes are important to its success,
including the number and quality of commercial radio signals broadcasting in the
market, the nature of the competition in the market, Citadel Broadcasting's
ability to improve the operating performance of the radio station or stations
under consideration and the general economic conditions of the market.

Citadel Broadcasting believes that its acquisition strategy, if properly
implemented, could have a number of benefits, including:

-- diversified revenue and broadcast cash flow across a greater number
of stations and markets,

-- improved broadcast cash flow margins through the consolidation of
facilities and the elimination of redundant expenses,

-- broadened range of advertising packages to offer advertisers,

-- improved leverage in various key vendor negotiations,

-- enhanced appeal to top industry management talent, and

-- increased overall scale which should facilitate Citadel
Broadcasting's capital raising activities.

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RADIO INDUSTRY OVERVIEW

Radio stations generate the majority of their revenue from the sale of
advertising time to local and national spot advertisers and national network
advertisers. Radio serves primarily as a medium for local advertising. From 1987
to 1996, local advertising revenue as a percentage of total radio advertising
revenue has ranged from approximately 74% to 78%, as reported in Veronis Suhler
Industry Forecasts (11th ed.). The growth in total radio advertising revenue
tends to be fairly stable. Total radio advertising revenue in 1997 of $13.6
billion represented a 9.7% increase over 1996, as reported by the Radio
Advertising Bureau.

Radio is considered to be an efficient means of reaching specifically
identified demographic groups. Stations are typically classified by their on-air
format, such as country, adult contemporary, oldies or news/talk. A station's
format and style of presentation enable it to target particular demographic and
psychographic groups. By capturing a specific listening audience share of a
market's radio audience, with particular concentration in a targeted demographic
group, a station is able to market its broadcasting time to advertisers seeking
to reach a specific audience. Advertisers and stations utilize data published by
audience measuring services, such as The Arbitron Company, to estimate how many
people within particular geographical markets and demographic groups listen to
specific stations.

Stations determine the number of advertisements broadcast hourly that will
maximize available revenue dollars without jeopardizing listening levels.
Although the number of advertisements broadcast during a given time period may
vary, the total number of advertisements broadcast on a particular station
generally does not vary significantly from year to year.

A station's local sales staff generates the majority of its local and
regional advertising sales through direct solicitations of local advertising
agencies and businesses. To generate national advertising sales, a station will
engage a firm that specializes in soliciting radio advertising sales on a
national level. National sales representatives obtain advertising principally
from advertising agencies located outside the station's market and receive
commissions based on the revenue from the advertising obtained.

STATION PORTFOLIO

If all of the pending transactions described in "The Pending Transactions"
section are completed, Citadel Broadcasting will own 75 FM and 39 AM radio
stations in 20 mid-sized markets, operate one additional FM radio station in
Reno pursuant to a local marketing agreement and have the right to construct one
additional FM radio station in Little Rock. The following table sets forth
information about stations owned or operated by Citadel Broadcasting after
giving effect to its pending transactions. The year acquired shown in the table
below includes acquisitions made by Citadel Broadcasting's predecessors, Citadel
Associates Limited Partnership and Citadel Associates Montana Limited
Partnership. See "--Corporate History and Recently Completed Transactions."

As you review the information in the following table, you should note the
following:

-- The symbol "*" indicates a station which is the subject of one of
Citadel Broadcasting's pending transactions. The completion of each
of the pending transactions is subject to conditions to closing.
Although Citadel Broadcasting believes these conditions are
customary for transactions of this type and will be

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<PAGE> 54

satisfied, there can be no assurance that such closing conditions
will be satisfied. See "The Pending Transactions,"

-- The letter "t" in the Station Rank in Primary Demographic Target
column in the table denotes that a station tied with one or more
other radio stations,

-- The letters "NA" denotes that information is not available,

-- A dash in either the Station Rank in Primary Demographic Target or
Radio Group Market Revenue Share columns in the table denotes that
information is not meaningful,

-- The letter "A" designates adults, the letter "W" designates women,
the letter "M" designates men and the letter "C" designates
children. The numbers following each letter designate the range of
ages included within the demographic group,

-- Combined stations are simulcast. Rank and audience share
information is given on a combined basis,

-- The generally accepted method of measuring the relative size of a
radio station's audience is by reference to total persons, within
specific demographic groups, Monday--Sunday, 6:00 a.m.--12:00
midnight average quarter hour shares, as published by The Arbitron
Company. Arbitron periodically samples radio listeners in defined
market areas, principally through the use of diaries returned by
selected listeners. A station's average quarter hour share is a
percentage computed by dividing the average number of persons
listening to a particular station for at least five minutes during
an average quarter hour in a given time period by the average
number of such persons for all stations in the market area. Station
Rank in Primary Demographic Target in the table is the ranking of a
station among all stations in its target demographic group based
upon the station's average quarter hour shares. Arbitron compiles
ratings data for various demographic groups. All information
concerning ratings and audience listening information used in this
prospectus is given in accordance with the method described above
and derived from the Arbitron Reports,

-- Radio Group Market Revenue Share in the table was derived for each
radio group by summing the market share of revenue of each station
included within the group. Radio Group Rank in Market Revenue in
the table is the ranking, by radio group market revenue, of each of
Citadel Broadcasting's radio groups in its market among all other
radio groups in that market,

-- Pending their acquisition by Citadel Broadcasting, Citadel
Broadcasting operates WKQV-FM and WKQV-AM in Wilkes-Barre/Scranton
under a local marketing agreement and a joint sales agreement,
respectively, WHYL-AM and WHYL-FM in Harrisburg/Carlisle under a
local marketing agreement, KEYF-AM and KEYF-FM in Spokane and
KSPZ-FM, KVOR-AM and KTWK-AM in Colorado Springs under a joint
sales agreement. See "The Pending Transactions,"

-- Citadel Broadcasting operates KXXL-FM in Reno under a local
marketing agreement,

-- Two of the stations listed as Little Rock stations serve the
surrounding communities outside of Little Rock, and

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-- The abbreviation "LMA" in the Years Acquired/LMA column means local
marketing agreement and the abbreviation "JSA" means joint sales
agreement.

-- KATM-FM, KHKK-FM/KDJK-FM and KHOP-FM, which are listed under
Modesto, California, also broadcast in the adjacent Stockton,
California market where, in the Spring 1998 Arbitron Report, they
ranked 1, 2 and 2 in their primary demographic targets,
respectively.
<TABLE>
<CAPTION>
STATION
STATION AUDIENCE
RANK IN SHARE IN RADIO
PRIMARY PRIMARY PRIMARY GROUP
METROPOLITAN STATION DEMO- DEMO- DEMO- MARKET
RADIO GROUP/ STATISTICAL PROGRAMMING YEAR GRAPHIC GRAPHIC GRAPHIC REVENUE
STATION CALL LETTERS AREA RANK FORMAT ACQUIRED/LMA TARGET TARGET TARGET SHARE
- ----------------------- ------------ ----------------------- -------------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
PROVIDENCE, RI......... 31 33.7%
Owned
WPRO-AM............... News/Talk 1997 A 25-54 11 2.9%
WPRO-FM............... Contemporary Hits 1997 A 18-49 2 9.4
WWLI-FM............... Adult Contemporary 1997 W 25-54 2 9.9
WSKO-AM............... Sports 1997 M 25-54 15 1.6
WXEX-FM............... Rock 1997 M 18-34 5t 6.1
WHKK-FM............... Rock Oldies 1997/1997 A 25-54 9 3.2
SALT LAKE CITY, UT..... 35 18.1%
Owned
KUBL-FM............... Country 1988 A 25-54 4t 5.4%
KCNR-AM............... Children's 1988 C 4-11 -- --
KFNZ-AM............... Sports 1997/1992 M 25-54 1 10.1
KBEE-FM............... Adult Contemporary 1997/1992 W 18-49 5 6.0
KBER-FM............... Album Oriented Rock 1997/1996 A 18-34 2 7.0
KENZ-FM............... Rock Alternative 1997/1996(JSA) A 18-34 1 8.0
WILKES-BARRE/ SCRANTON,
PA.................... 63 29.0%
Owned
WMGS-FM............... Adult Contemporary 1997 W 25-54 2 15.2%
WARM-AM............... News/Talk 1997 A 35-64 13t 1.4
WZMT-FM............... Album Oriented Rock 1997 M 18-34 3 8.0
WAZL-AM............... Nostalgia 1997 A 35-64 33t 0.4
WEMR-FM............... Contemporary Hits 1998/1997 W 18-34 -- --
WCTP-FM/ WCTD-FM...... Country 1998/1997 A 35-64 6 3.4
WCDL-AM............... Country 1998/1997 A 35-64 -- --
WBHT-FM............... Country 1999/1997 A 35-64 10 2.3
WEMR-AM............... Simulcast with WBHT-FM 1998/1997 A 35-64 -- --
*WKQV-AM.............. Sports pending/1997(JSA) M 25-54 -- --
*WKQV-FM.............. Simulcast with WZMT-FM pending/1997 M 18-34 6 5.1
ALLENTOWN/ BETHLEHEM,
PA.................... 66 26.5%
Owned
WCTO-FM............... Country 1997 A 25-54 2 13.5%
WLEV-FM............... Adult Contemporary 1997/1997 W 25-54 3 11.7
ALBUQUERQUE, NM........ 70 55.9%
Owned
KKOB-AM............... News/Talk 1994 A 25-54 6 5.8%
KKOB-FM............... Adult Contemporary 1994 W 25-54 2 8.6
KMGA-FM............... Adult Contemporary 1994 W 25-54 4t 5.5
KHTL-AM............... News/Talk 1994 A 35-64 25t 0.7
KTBL-FM............... Country 1996/1995(JSA) A 25-54 7 5.0
KHFM-FM............... Classical 1996 A 25-54 12t 3.3
KNML-AM............... Sports 1996 M 25-54 18t 1.8
KRST-FM............... Country 1996/1996 A 25-54 1 10.6
HARRISBURG/ CARLISLE,
PA.................... 73 17.8%
Owned
WRKZ-FM............... Country 1997 A 25-54 7 5.3%
*WHYL-FM.............. Simulcast with WRKZ-FM pending/1998 A 25-54 14 1.7
*WHYL-AM.............. Nostalgia pending/1998 A 35-64 12 2.0

RADIO
GROUP
RANK IN
RADIO GROUP/ MARKET
STATION CALL LETTERS REVENUE
- ----------------------- ----------
<S> <C>
PROVIDENCE, RI......... 1
Owned
WPRO-AM...............
WPRO-FM...............
WWLI-FM...............
WSKO-AM...............
WXEX-FM...............
WHKK-FM...............
SALT LAKE CITY, UT..... 3
Owned
KUBL-FM...............
KCNR-AM...............
KFNZ-AM...............
KBEE-FM...............
KBER-FM...............
KENZ-FM...............
WILKES-BARRE/ SCRANTON,
PA.................... 2
Owned
WMGS-FM...............
WARM-AM...............
WZMT-FM...............
WAZL-AM...............
WEMR-FM...............
WCTP-FM/ WCTD-FM......
WCDL-AM...............
WBHT-FM...............
WEMR-AM...............
*WKQV-AM..............
*WKQV-FM..............
ALLENTOWN/ BETHLEHEM,
PA.................... 2
Owned
WCTO-FM...............
WLEV-FM...............
ALBUQUERQUE, NM........ 1
Owned
KKOB-AM...............
KKOB-FM...............
KMGA-FM...............
KHTL-AM...............
KTBL-FM...............
KHFM-FM...............
KNML-AM...............
KRST-FM...............
HARRISBURG/ CARLISLE,
PA.................... 3
Owned
WRKZ-FM...............
*WHYL-FM..............
*WHYL-AM..............
</TABLE>

53
<PAGE> 56
<TABLE>
<CAPTION>
STATION
STATION AUDIENCE
RANK IN SHARE IN RADIO
PRIMARY PRIMARY PRIMARY GROUP
METROPOLITAN STATION DEMO- DEMO- DEMO- MARKET
RADIO GROUP/ STATISTICAL PROGRAMMING YEAR GRAPHIC GRAPHIC GRAPHIC REVENUE
STATION CALL LETTERS AREA RANK FORMAT ACQUIRED/LMA TARGET TARGET TARGET SHARE
- ----------------------- ------------ ----------------------- -------------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
BATON ROUGE, LA........ 81 27.4%
Owned
*KQXL-FM.............. Urban Adult pending A 25-54 4 6.3%
Contemporary
*WXOK-AM.............. Gospel pending A 35-64 3 6.9
*WEMX-FM.............. Urban pending A 18-34 1t 10.1
*WKJN-FM.............. Country pending A 25-54 12 3.1
*WIBR-AM.............. Sports pending M 25-54 11t 2.4
LITTLE ROCK, AR........ 82 40.3%
Owned
KARN-AM/KARN-FM/
KKRN-FM............. News/Talk/Sports 1997/1997 A 25-54 8 4.9%
KIPR-FM............... Urban 1997/1997 A 18-49 5 7.4
KOKY-FM............... Urban Adult 1997/1997 A 25-54 11t 3.9
Contemporary
KLAL-FM............... Modern Adult 1997 A 18-49 6 6.9
Contemporary
KAFN-FM............... Not yet operational 1997 NA NA NA
KLIH-AM............... Gospel 1997 A 25-54 19t 0.8
KURB-FM............... Adult Contemporary 1997 A 25-54 4 7.5
KVLO-FM............... Soft Adult Contemporary 1997 W 25-54 4t 7.4
KAAY-AM............... Religious 1998 A 25-54 22t 0.5
SPOKANE, WA............ 86 35.1%
Owned
KGA-AM................ News/Talk 1992 A 25-54 9 4.7%
KDRK-FM............... Country 1992 A 25-54 3t 8.8
KAEP-FM............... Rock Alternative 1993 A 18-34 3 10.5
KJRB-AM............... Talk/Sports 1993/1993 A 35-64 14t 1.6
*KEYF-AM/FM........... Oldies pending/1996(JSA) A 25-54 5 7.2
*KNJY-FM.............. Rock pending M 18-34 2t 11.5%
COLORADO SPRINGS, CO... 93 44.3%
Owned
KKFM-FM............... Classic Rock 1986 M 25-54 1 14.1%
KKMG-FM............... Contemporary Hits 1994/1990 W 18-34 1 19.8
*KSPZ-FM.............. Oldies pending/1996(JSA) A 25-54 3t 7.8
*KVOR-AM.............. News/Talk pending/1996(JSA) A 35-64 5 6.4
*KTWK-AM.............. Nostalgia pending/1996(JSA) A 35-64 15 1.3
CHARLESTON, SC......... 96 47.8%
Owned
*WSSX-FM.............. Hot Adult Contemporary pending A 25-54 8 5.9%
*WWWZ-FM.............. Urban pending A 18-34 1 15.8
*WMGL-FM.............. Urban Adult pending A 25-54 3t 7.2
Contemporary
*WSUY-FM.............. Soft Adult Contemporary pending W 25-54 1 11.9
*WNKT-FM.............. Country pending A 25-54 14 2.1
*WTMA-AM.............. News/Talk pending A 25-54 13 2.4
*WTMZ-AM.............. News pending A 25-54 22t 0.3
*WXTC-AM.............. Urban Gospel pending A 25-54 5t 7.0
LAFAYETTE, LA.......... 97 14.2%
Owned
*KFXZ-FM.............. Gospel pending A 35-64 18 2.0%
*KNEK-FM.............. Urban Adult pending A 25-54 9 3.8
Contemporary
*KNEK-AM.............. Urban Adult pending A 25-54 -- --
Contemporary
*KRRQ-FM.............. Urban pending A 18-34 1 12.4
YORK, PA............... 102 10.2%
Owned
WQXA-FM............... Rock 1997 M 18-34 1 24.0%
WQXA-AM............... Nostalgia 1997 A 35-64 22t 0.9
MODESTO, CA............ 120 52.4%
Owned
KATM-FM............... Country 1992 A 25-54 1 12.9%
KANM-AM............... Sports 1992 M 25-54 -- --
KHKK-FM/KDJK-FM....... Rock Oldies 1993/1993(KHKK) A 25-54 2 9.8
KHOP-FM............... Album Oriented Rock 1996 A 18-34 2 11.0
SAGINAW/ BAY CITY,
MI.................... 123 41.7%
Owned
WKQZ-FM............... Rock 1999 M 18-49 1 20.9%
WMJK-FM/ WMJA-FM...... Classic Rock 1999 M 25-54 4t 7.9
WIOG-FM............... Hot Adult Contemporary 1999 A 25-54 1t 12.0
WGER-FM............... Soft Adult Contemporary 1999 W 25-54 5 8.6
WSGW-AM............... News/Talk 1999 A 25-54 8 4.7

RADIO
GROUP
RANK IN
RADIO GROUP/ MARKET
STATION CALL LETTERS REVENUE
- ----------------------- ----------
<S> <C>
BATON ROUGE, LA........ 2
Owned
*KQXL-FM..............
*WXOK-AM..............
*WEMX-FM..............
*WKJN-FM..............
*WIBR-AM..............
LITTLE ROCK, AR........ 2
Owned
KARN-AM/KARN-FM/
KKRN-FM.............
KIPR-FM...............
KOKY-FM...............
KLAL-FM...............
KAFN-FM...............
KLIH-AM...............
KURB-FM...............
KVLO-FM...............
KAAY-AM...............
SPOKANE, WA............ 2
Owned
KGA-AM................
KDRK-FM...............
KAEP-FM...............
KJRB-AM...............
*KEYF-AM/FM...........
*KNJY-FM..............
COLORADO SPRINGS, CO... 1
Owned
KKFM-FM...............
KKMG-FM...............
*KSPZ-FM..............
*KVOR-AM..............
*KTWK-AM..............
CHARLESTON, SC......... 1
Owned
*WSSX-FM..............
*WWWZ-FM..............
*WMGL-FM..............
*WSUY-FM..............
*WNKT-FM..............
*WTMA-AM..............
*WTMZ-AM..............
*WXTC-AM..............
LAFAYETTE, LA.......... 4
Owned
*KFXZ-FM..............
*KNEK-FM..............
*KNEK-AM..............
*KRRQ-FM..............
YORK, PA............... 4
Owned
WQXA-FM...............
WQXA-AM...............
MODESTO, CA............ 1
Owned
KATM-FM...............
KANM-AM...............
KHKK-FM/KDJK-FM.......
KHOP-FM...............
SAGINAW/ BAY CITY,
MI.................... 1
Owned
WKQZ-FM...............
WMJK-FM/ WMJA-FM......
WIOG-FM...............
WGER-FM...............
WSGW-AM...............
</TABLE>

54
<PAGE> 57
<TABLE>
<CAPTION>
STATION
STATION AUDIENCE
RANK IN SHARE IN RADIO
PRIMARY PRIMARY PRIMARY GROUP
METROPOLITAN STATION DEMO- DEMO- DEMO- MARKET
RADIO GROUP/ STATISTICAL PROGRAMMING YEAR GRAPHIC GRAPHIC GRAPHIC REVENUE
STATION CALL LETTERS AREA RANK FORMAT ACQUIRED/LMA TARGET TARGET TARGET SHARE
- ----------------------- ------------ ----------------------- -------------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
BOISE, ID.............. 125 42.0%
Owned
KIZN-FM............... Country 1998/1997 A 25-54 5t 6.5%
KZMG-FM............... Contemporary Hits 1998/1997 W 18-34 1 22.1
KKGL-FM............... Classic Rock 1998/1997 M 25-54 15t 2.1
KQFC-FM............... Country 1998/1997 A 25-54 3 8.0
KBOI-AM............... News/Talk 1998/1997 A 35-64 5 6.7
RENO, NV............... 129 36.3%
Owned
KBUL-FM............... Country 1992 A 25-54 1 12.2%
KKOH-AM............... News/Talk 1992 A 25-54 6 6.7
KNEV-FM............... Adult Contemporary 1993/1993 W 18-49 1t 12.1
KNHK-FM............... Rock Oldies 1997/1997 A 25-54 7 6.4
Operated
KXXL-FM............... Country 1998(LMA) A 25-54 -- --
BINGHAMTON, NY......... 164 63.0%
Owned
*WHWK-FM.............. Country pending A 25-54 3 13.1%
*WYOS-FM.............. Oldies pending A 25-54 6 5.7
*WAAL-FM.............. Album Oriented Rock pending M 25-54 1 17.2
*WNBF-AM.............. News/Talk pending A 25-54 8 4.5
*WKOP-AM.............. Nostalgia pending A 35-64 9t 2.0
MUNCIE, IN............. NA NA
Owned
*WMDH-FM.............. Country pending A 25-54 NA NA
*WMDH-AM.............. News/Talk pending A 25-54 NA NA
KOKOMO, IN............. NA NA
Owned
*WWKI-FM.............. Country pending A 25-54 NA NA

RADIO
GROUP
RANK IN
RADIO GROUP/ MARKET
STATION CALL LETTERS REVENUE
- ----------------------- ----------
<S> <C>
BOISE, ID.............. 2
Owned
KIZN-FM...............
KZMG-FM...............
KKGL-FM...............
KQFC-FM...............
KBOI-AM...............
RENO, NV............... 1
Owned
KBUL-FM...............
KKOH-AM...............
KNEV-FM...............
KNHK-FM...............
Operated
KXXL-FM...............
BINGHAMTON, NY......... 1
Owned
*WHWK-FM..............
*WYOS-FM..............
*WAAL-FM..............
*WNBF-AM..............
*WKOP-AM..............
MUNCIE, IN............. NA
Owned
*WMDH-FM..............
*WMDH-AM..............
KOKOMO, IN............. NA
Owned
*WWKI-FM..............
</TABLE>

The following is a description of the markets served by Citadel
Broadcasting's radio stations and those stations which Citadel Broadcasting has
entered into definitive agreements or a letter of intent to acquire. The
description gives effect to the pending radio station sales described in the
"Pending Transactions" section.

Providence, Rhode Island. Citadel Broadcasting owns four FM and two AM
radio stations in Providence. Providence has a metropolitan statistical area
rank of 31, and had market revenue of approximately $39.5 million in 1997, an
approximate 2.1% increase over 1996. There are 37 stations in the Providence
market, including ten viable FM and three viable AM stations. The six stations
owned by Citadel Broadcasting rank first in the market in terms of their
combined gross revenue, with approximately 33.7% of the market revenue in 1997.

Salt Lake City, Utah. Citadel Broadcasting owns four FM and two AM radio
stations in Salt Lake City. Salt Lake City has a metropolitan statistical area
rank of 35, and had market revenue of approximately $62.4 million in 1997, an
approximate 8.1% increase over 1996. There are 43 stations in the Salt Lake City
market, including 16 viable FM and four viable AM stations. The six stations
owned by Citadel Broadcasting rank third in the market in terms of their
combined gross revenue, with approximately 18.1% of the market revenue in 1997.

Wilkes-Barre/Scranton, Pennsylvania. Citadel Broadcasting owns six FM and
four AM radio stations and operates one FM radio station and one AM radio
station under a local marketing agreement and a joint sales agreement,
respectively, in Wilkes-Barre/Scranton. Citadel Broadcasting has exercised its
options to purchase the one FM radio station and the one AM radio station it
currently operates. See "The Pending Transactions." Wilkes-Barre/

55
<PAGE> 58

Scranton has a metropolitan statistical area rank of 63, and had market revenue
of approximately $25.6 million in 1997, an approximate 8.0% increase over 1996.
There are 40 stations in the Wilkes-Barre/Scranton market, including ten viable
FM and four viable AM stations. The ten stations owned by Citadel Broadcasting
together with the two stations it has entered into agreements to acquire rank
second in the market in terms of their combined gross revenue, with
approximately 29.0% of market revenue in 1997.

Allentown/Bethlehem, Pennsylvania. Citadel Broadcasting owns two FM radio
stations in Allentown/Bethlehem. Allentown/Bethlehem has a metropolitan
statistical area rank of 66, and had market revenue of approximately $24.3
million in 1997, an approximate 7.5% increase over 1996. There are 19 stations
in the Allentown market, including six viable FM and three viable AM stations.
The two stations owned by Citadel Broadcasting rank second in the market in
terms of their combined gross revenue, with approximately 26.5% of market
revenue in 1997.

Albuquerque, New Mexico. Citadel Broadcasting owns five FM and three AM
radio stations in Albuquerque. Albuquerque has a metropolitan statistical area
rank of 70, and had market revenue of approximately $34.6 million in 1997, an
approximate 5.8% increase over 1996. There are 37 stations in the Albuquerque
market, including 17 viable FM and three viable AM stations. The eight stations
owned by Citadel Broadcasting rank first in the market in terms of their
combined gross revenue, with approximately 55.9% of the market revenue in 1997.

Harrisburg/Carlisle, Pennsylvania and York, Pennsylvania. Citadel
Broadcasting owns one FM radio station in Harrisburg and one FM radio station
and one AM radio station in York and has entered into an agreement to purchase
one FM radio station and one AM radio station in Carlisle which stations it
currently operates under a local marketing agreement. See "The Pending
Transactions." Harrisburg/Carlisle and York are adjacent markets with numerous
overlapping radio signals. Citadel Broadcasting expects to continue operating
these stations as a single station group.

Harrisburg/Carlisle has a metropolitan statistical area rank of 73, and had
market revenue of approximately $24.4 million in 1997, an approximate 0.4%
decrease from 1996. There are 23 stations in the Harrisburg/Carlisle market,
including eight viable FM and three viable AM stations. The station owned by
Citadel Broadcasting together with the two stations it has entered into an
agreement to acquire rank third in the market in terms of gross revenue, with
approximately 17.8% of the market revenue in 1997.

York has a metropolitan statistical area rank of 102, and had market
revenue of approximately $16.6 million in 1997, an approximate 7.8% increase
over 1996. There are 16 stations in the York market, including seven viable FM
stations and one viable AM station. The two stations owned by Citadel
Broadcasting rank fourth in the market in terms of their combined gross revenue,
with approximately 10.2% of the market revenue in 1997.

Baton Rouge, Louisiana. Citadel Broadcasting has entered into an agreement
to purchase three FM and two AM radio stations in Baton Rouge. Baton Rouge has a
metropolitan statistical area rank of 81, and had market revenue of
approximately $22.6 million in 1997, an approximate 7.1% increase over 1996.
There are 21 stations in the Baton Rouge market, including nine viable FM and
two viable AM stations. The five stations to be acquired by Citadel Broadcasting
rank second in the market in terms of their combined gross revenue, with
approximately 27.4% of the market revenue in 1997. See "The Pending
Transactions."

56
<PAGE> 59

Little Rock, Arkansas. Citadel Broadcasting owns seven FM and three AM
radio stations and has the right to construct and operate one additional FM
radio station in Little Rock. Little Rock has a metropolitan statistical area
rank of 82, and had market revenue of approximately $21.1 million in 1997, an
approximate 7.1% increase over 1996. There are 33 stations in the Little Rock
market, including 13 viable FM stations and one viable AM station. The ten
operating stations owned by Citadel Broadcasting rank second in the market in
terms of their combined gross revenue, with approximately 40.3% of market
revenue in 1997.

Citadel Broadcasting also owns the Arkansas Radio Network, which was
established in 1968 and is a state-wide news network with affiliates in nearly
every county in Arkansas. The Arkansas Radio Network feeds hourly newscasts in
addition to agricultural programs, market reports, weather and special events.

Spokane, Washington. Citadel Broadcasting owns two FM and two AM radio
stations in Spokane and has entered into agreements to acquire two FM radio
stations and one AM radio station in this market. See "The Pending
Transactions." Citadel Broadcasting currently operates under a joint sales
agreement two of the stations it has entered into an agreement to acquire.
Spokane has a metropolitan statistical area rank of 86, and had market revenue
of approximately $16.5 million in 1997, an approximate 7.8% increase over 1996.
There are 28 stations in the Spokane market, including 12 viable FM and four
viable AM stations. The four stations owned by Citadel Broadcasting together
with the three stations it has entered into agreements to acquire rank second in
the market in terms of their combined gross revenue, with approximately 32.1% of
the market revenue in 1997.

Colorado Springs, Colorado. Citadel Broadcasting owns two FM radio
stations in Colorado Springs and has entered into an agreement to acquire one FM
radio station and two AM radio stations in this market. See "The Pending
Transactions." Citadel Broadcasting currently operates under a joint sales
agreement the three stations it has entered into an agreement to acquire.
Colorado Springs has a metropolitan statistical area rank of 93, and had market
revenue of approximately $15.4 million in 1997, an approximate 6.9% increase
over 1996. There are 21 stations in the Colorado Springs market, including 11
viable FM and two viable AM stations. The two stations owned by Citadel
Broadcasting together with the three stations it has entered into an agreement
to acquire rank first in the market in terms of their combined gross revenue,
with approximately 44.3% of the market revenue in 1997.

Charleston, South Carolina. Citadel Broadcasting has entered into an
agreement to purchase five FM and three AM radio stations in Charleston.
Charleston has a metropolitan statistical area rank of 96 and had market revenue
of approximately $18.0 million in 1997, an approximate 5.9% increase over 1996.
There are 27 stations in the Charleston Market, including 12 viable FM stations
and one viable AM station. The eight stations to be acquired by Citadel
Broadcasting rank first in the market in terms of their combined gross revenue,
with approximately 47.8% of the market revenue in 1997. See "The Pending
Transactions."

Lafayette, Louisiana. Citadel Broadcasting has entered into an agreement
to purchase three FM radio stations and one AM radio station in Lafayette.
Lafayette has a metropolitan statistical area rank of 97, and had market revenue
of approximately $11.5 million in 1997, an approximate 7.5% increase over 1996.
There are 33 stations in the Lafayette market, including 12 viable FM stations
and one viable AM station. The four stations to be acquired by Citadel
Broadcasting rank fourth in the market in terms of their combined gross revenue,
with approximately 14.2% of the market revenue in 1997. See "The Pending
Transactions."

57
<PAGE> 60

Modesto, California. Citadel Broadcasting owns four FM radio stations and
one AM radio station in Modesto. Modesto has a metropolitan statistical area
rank of 120, and had market revenue of approximately $16.6 million in 1997, an
approximate 6.4% increase over 1996. There are 22 stations in the Modesto
market, including nine viable FM and two viable AM stations. The five stations
owned by Citadel Broadcasting rank first in the market in terms of their
combined gross revenue, with approximately 52.4% of the market revenue in 1997.

Saginaw/Bay City, Michigan. Citadel Broadcasting owns five FM radio
stations and one AM radio station in Saginaw/Bay City. Saginaw/Bay City has a
metropolitan statistical area rank of 123, and had market revenue of
approximately $18.7 million in 1997, an approximate 1.6% increase over 1996.
There are 20 stations in the Saginaw/Bay City market, including ten viable FM
and three viable AM stations. The six stations owned by Citadel Broadcasting
rank first in the market in terms of their combined gross revenue, with
approximately 41.7% of the market revenue in 1997.

Boise, Idaho. Citadel Broadcasting owns four FM radio stations and one AM
radio station in Boise. Boise has a metropolitan statistical area rank of 125,
and had market revenue of approximately $15.7 million in 1997, an approximate
5.4% increase over 1996. There are 26 stations in the Boise market, including 11
viable FM and three viable AM stations. The five stations owned by Citadel
Broadcasting rank second in the market in terms of their combined gross revenue,
with approximately 42.0% of market revenue in 1997.

Reno, Nevada. Citadel Broadcasting owns three FM radio stations and one AM
radio station in Reno. Citadel Broadcasting also operates an additional FM radio
station in Reno under a local marketing agreement. Reno has a metropolitan
statistical area rank of 129, and had market revenue of approximately $15.1
million in 1997, an approximate 3.4% increase over 1996. There are 25 stations
in the Reno market, including 13 viable FM and two viable AM stations. The four
stations owned by Citadel Broadcasting together with the station it operates
rank first in the market in terms of their combined gross revenue, with
approximately 36.3% of the market revenue in 1997.

Binghamton, New York. Citadel Broadcasting has entered into an agreement
to purchase three FM and two AM radio stations in Binghamton. Binghamton has a
metropolitan statistical area rank of 164, and had market revenue of
approximately $8.8 million in 1997, an approximate increase of 4.8% over 1996.
There are 16 stations in the Binghamton market, including seven viable FM
stations and three viable AM stations. The five stations to be acquired by
Citadel Broadcasting rank first in the market in terms of their combined gross
revenue, with approximately 63.0% of the market revenue in 1997. See "The
Pending Transactions."

Muncie, Indiana. Citadel Broadcasting has entered into an agreement to
purchase one FM and one AM radio station in Muncie. Metropolitan statistical
area rank, market revenue, the number of stations and viable station data are
not available for the Muncie market. See "The Pending Transactions."

Kokomo, Indiana. Citadel Broadcasting has entered into an agreement to
purchase one FM radio station in Kokomo. Metropolitan statistical area rank,
market revenue, the number of stations and viable station data are not available
for the Kokomo market. See "The Pending Transactions."

58
<PAGE> 61

ADVERTISING SALES

Virtually all of Citadel Broadcasting's revenue is generated from the sale
of local, regional and national advertising for broadcast on its radio stations.
In 1997, approximately 84.7% of Citadel Broadcasting's net broadcasting revenue
was generated from the sale of local and regional advertising. Additional
broadcasting revenue is generated from the sale of national advertising, network
compensation payments and other miscellaneous transactions. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--General." The major categories of Citadel Broadcasting's advertisers
include telephone companies, restaurants, fast food, automotive and grocery.
Each station's local sales staff solicits advertising either directly from the
local advertiser or indirectly through an advertising agency. Citadel
Broadcasting pays a higher commission rate to the sales staff for generating
direct sales because Citadel Broadcasting believes that through direct
advertiser relationships it can better understand the advertiser's business
needs and more effectively design an advertising campaign to help the advertiser
sell its product. Citadel Broadcasting employs personnel in each of its markets
to produce commercials for the advertisers. National sales are made by a firm
specializing in radio advertising sales on the national level in exchange for a
commission from Citadel Broadcasting that is based on Citadel Broadcasting's
gross revenue from the advertising obtained. Regional sales, which Citadel
Broadcasting defines as sales in regions surrounding Citadel Broadcasting's
markets to companies that advertise in Citadel Broadcasting's markets, are
generally made by Citadel Broadcasting's local sales staff.

Depending on the programming format of a particular station, Citadel
Broadcasting estimates the optimum number of advertisements available for sale.
The number of advertisements that can be broadcast without jeopardizing
listening levels, and the resulting ratings, is limited in part by the format of
a particular station. Citadel Broadcasting's stations strive to maximize revenue
by managing their on-air inventory of advertising time and adjusting prices
based on local market conditions and on Citadel Broadcasting's ability, through
its marketing efforts, to provide advertisers with an effective means of
reaching a targeted demographic group. Each of Citadel Broadcasting's stations
has a general target level of on-air inventory that it makes available for
advertising. This target level of inventory for sale may be different at
different times of the day but tends to remain stable over time. Much of Citadel
Broadcasting's selling activity is based on demand for its radio stations'
on-air inventory and, in general, Citadel Broadcasting responds to this demand
by varying prices rather than by varying its target inventory level for a
particular station. Therefore, most changes in revenue are explained by
demand-driven pricing changes rather than by changes in the available inventory.

Citadel Broadcasting believes that radio is one of the most efficient and
cost-effective means for advertisers to reach specific demographic groups.
Advertising rates charged by radio stations are based primarily on:

-- a station's share of audiences in the demographic groups targeted
by advertisers, as measured by ratings surveys estimating the
number of listeners tuned to the station at various times,

-- the number of stations in the market competing for the same
demographic groups,

-- the supply of and demand for radio advertising time, and

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<PAGE> 62

-- certain qualitative factors.

Rates are generally highest during morning and afternoon commuting hours.

A station's listenership is reflected in ratings surveys that estimate the
number of listeners tuned to the station and the time they spend listening. Each
station's ratings are used by its advertisers and advertising representatives to
consider advertising with the station and are used by Citadel Broadcasting to
chart audience growth, set advertising rates and adjust programming. The radio
broadcast industry's principal ratings service is The Arbitron Company, which
publishes periodic ratings surveys for significant domestic radio markets. These
surveys are Citadel Broadcasting's primary source of ratings data.

COMPETITION

The radio broadcasting industry is highly competitive. The success of each
of Citadel Broadcasting's stations depends largely upon its audience ratings and
its share of the overall advertising revenue within its market. Citadel
Broadcasting's audience ratings and advertising revenue are subject to change,
and any adverse change in a particular market affecting advertising expenditures
or an adverse change in the relative market positions of the stations located in
a particular market could have a material adverse effect on the revenue of
Citadel Broadcasting's radio stations located in that market. There can be no
assurance that any one of Citadel Broadcasting's radio stations will be able to
maintain or increase its current audience ratings or advertising revenue market
share.

Citadel Broadcasting's stations compete for listeners and advertising
revenue directly with other radio stations within their respective markets.
Radio stations compete for listeners primarily on the basis of program content
that appeals to a particular demographic group. By building a strong listener
base consisting of a specific demographic group in each of its markets, Citadel
Broadcasting is able to attract advertisers seeking to reach those listeners.
Companies that operate radio stations must be alert to the possibility of
another station changing its format to compete directly for listeners and
advertisers. Another station's decision to convert to a format similar to that
of one of Citadel Broadcasting's radio stations in the same geographic area may
result in lower ratings and advertising revenue, increased promotion and other
expenses and, consequently, lower broadcast cash flow for Citadel Broadcasting.

Factors that are material to a radio station's competitive position include
management experience, the station's local audience rank in its market,
transmitter power, assigned frequency, audience characteristics, local program
acceptance and the number and characteristics of other radio stations in the
market area. Citadel Broadcasting attempts to improve its competitive position
in each market by extensively researching its stations' programming, by
implementing advertising campaigns aimed at the demographic groups for which its
stations program and by managing its sales efforts to attract a larger share of
advertising dollars. However, Citadel Broadcasting competes with some
organizations that have greater financial resources than Citadel Broadcasting.

Recent changes in FCC policies and rules permit increased ownership and
operation of multiple local radio stations. Management believes that radio
stations that elect to take advantage of joint arrangements such as local
marketing agreements or joint sales agreements may in certain circumstances have
lower operating costs and may be able to offer advertisers more attractive rates
and services. Although Citadel Broadcasting currently operates multiple stations
in each of its markets and intends to pursue the creation of additional multiple

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station groups, Citadel Broadcasting's competitors in certain markets include
operators of multiple stations or operators who already have entered into local
marketing agreements or joint sales agreements Citadel Broadcasting also
competes with other radio station groups to purchase additional stations. Some
of these groups are owned or operated by companies that have substantially
greater financial and other resources than Citadel Broadcasting.

Although the radio broadcasting industry is highly competitive, some
barriers to entry exist. The operation of a radio broadcast station requires a
license from the FCC, and the number of radio stations that can operate in a
given market is limited by the availability of FM and AM radio frequencies
allotted by the FCC to communities in that market, as well as by the FCC's
multiple ownership rules regulating the number of stations that may be owned and
controlled by a single entity. The FCC's multiple ownership rules have changed
significantly as a result of the Telecommunications Act of 1996. For a
discussion of FCC regulation and the provisions of the Telecommunications Act of
1996, see "--Federal Regulation of Radio Broadcasting."

Citadel Broadcasting's stations also compete for advertising revenue with
other media, including newspapers, broadcast television, cable television,
magazines, direct mail, coupons and outdoor advertising. In addition, the radio
broadcasting industry is subject to competition from new media technologies that
are being developed or introduced, such as the delivery of audio programming by
cable television systems, by satellite and by digital audio broadcasting.
Digital audio broadcasting may deliver by satellite to nationwide and regional
audiences, multi-channel, multi-format, digital radio services with sound
quality equivalent to compact discs. The delivery of information through the
Internet also could create a new form of competition. The radio broadcasting
industry historically has grown despite the introduction of new technologies for
the delivery of entertainment and information. A growing population and greater
availability of radios, particularly car and portable radios, have contributed
to this growth. There can be no assurance, however, that the development or
introduction in the future of any new media technology will not have an adverse
effect on the radio broadcasting industry.

The FCC has recently authorized spectrum for the use of a new technology,
satellite digital audio radio services, to deliver audio programming. Digital
audio radio services may provide a medium for the delivery by satellite or
terrestrial means of multiple new audio programming formats to local and
national audiences. It is not known at this time whether this digital technology
also may be used in the future by existing radio broadcast stations either on
existing or alternate broadcasting frequencies. There are proposals before the
FCC to permit a new low power radio service which could open up opportunities
for low cost neighborhood service on frequencies which would not interfere with
existing stations. No FCC action has been taken on this proposal to date.

Citadel Broadcasting cannot predict what other matters might be considered
in the future by the FCC, nor can it assess in advance what impact, if any, the
implementation of any of these proposals or changes might have on its business.
See "--Federal Regulation of Radio Broadcasting."

FEDERAL REGULATION OF RADIO BROADCASTING

Introduction. The ownership, operation and sale of broadcast stations,
including those licensed to Citadel Broadcasting, are subject to the
jurisdiction of the FCC, which acts under authority derived from the
Communications Act of 1934. The Communications Act of 1934

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was amended in 1996 by the Telecommunications Act of 1996 to make changes in
several broadcast laws. Among other things, the FCC:

-- assigns frequency bands for broadcasting,

-- determines whether to approve changes in ownership or control of
station licenses,

-- regulates equipment used by stations,

-- adopts and implements regulations and policies that directly or
indirectly affect the ownership, operation and employment practices of
stations, and

-- has the power to impose penalties for violations of its rules under
the Communications Act of 1934.

The following is a brief summary of certain provisions of the
Communications Act of 1934 and of specific FCC regulations and policies. Failure
to observe these or other rules and policies can result in the imposition of
various sanctions, including fines, the grant of short (less than the maximum)
license renewal terms or, for particularly egregious violations, the denial of a
license renewal application, the revocation of a license or the denial of FCC
consent to acquire additional broadcast properties. Reference should be made to
the Communications Act of 1934, FCC rules and the public notices and rulings of
the FCC for further information concerning the nature and extent of federal
regulation of broadcast stations.

License Grant and Renewal. Until recently, radio broadcast licenses were
granted for maximum terms of seven years, but acting under the authority of the
Telecommunications Act of 1996, the FCC recently revised its rules to extend the
maximum term for future renewals to eight years. Licenses may be renewed through
an application to the FCC. Prior to the Telecommunications Act of 1996, during
certain periods when a renewal application was pending, competing applicants
could file for the radio frequency being used by the renewal applicant. The
Telecommunications Act of 1996 prohibits the FCC from considering such competing
applications if the FCC finds that the station has served the public interest,
convenience and necessity, that there have been no serious violations by the
licensee of the Communications Act of 1934 or the rules and regulations of the
FCC, and that there have been no other violations by the licensee of the
Communications Act of 1934 or the rules and regulations of the FCC that, when
taken together, would constitute a pattern of abuse.

Petitions to deny license renewals can be filed by interested parties,
including members of the public. These petitions may raise various issues before
the FCC. The FCC is required to hold hearings on renewal applications if the FCC
is unable to determine that renewal of a license would serve the public
interest, convenience and necessity, or if a petition to deny raises a
substantial and material question of fact as to whether the grant of the renewal
application would be prima facie inconsistent with the public interest,
convenience and necessity. Also, during certain periods when a renewal
application is pending, the transferability of the applicant's license is
restricted. A petition to deny renewal has been filed against four of Citadel
Broadcasting's Salt Lake City stations, alleging that they failed to comply with
FCC equal opportunity employment rules, and FCC processing of that petition has
delayed action on those license renewals. Except for that case, Citadel
Broadcasting is not currently aware of any facts that would prevent the timely
renewal of its licenses to operate its radio stations, although there can be no
assurance that Citadel Broadcasting's licenses will be renewed.

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The FCC classifies each AM and FM station. An AM station operates on either
a clear channel, regional channel or local channel. A clear channel is one on
which AM stations are assigned to serve wide areas. Clear channel AM stations
are classified as either: Class A stations, which operate on an unlimited time
basis and are designated to render primary and secondary service over an
extended area; Class B stations, which operate on an unlimited time basis and
are designed to render service only over a primary service area; or Class D
stations, which operate either during daytime hours only, during limited times
only or on an unlimited time basis with low nighttime power. A regional channel
is one on which Class B and Class D AM stations may operate and serve primarily
a principal center of population and the rural areas contiguous to it. A local
channel is one on which AM stations operate on an unlimited time basis and serve
primarily a community and the suburban and rural areas immediately contiguous
thereto. Class C AM stations operate on a local channel and are designed to
render service only over a primary service area that may be reduced as a
consequence of interference.

The minimum and maximum facilities requirements for an FM station are
determined by its class. FM class designations depend upon the geographic zone
in which the transmitter of the FM station is located. In general, commercial FM
stations are classified as follows, in order of increasing power and antenna
height: Class A, B1, C3, B, C2, C1 and C.

The following table sets forth the market, call letters, FCC license
classification, antenna height above average terrain (HAAT), power and frequency
of each of the stations owned or operated by Citadel Broadcasting, assuming the
completion of the pending transactions described in "The Pending Transactions"
section, and the date on which each station's FCC license expires.

As you review the information in the following table, you should note the
following:

-- The symbol "*" indicates a station which is the subject of one of
Citadel Broadcasting's pending transactions. The completion of
each of the pending transactions is subject to conditions to
closing. Although Citadel Broadcasting believes these conditions
are customary for transactions of this type and will be
satisfied, there can be no assurance that the closing conditions
will be satisfied. See "The Pending Transactions."

-- A station's actual city of license may be different from the
shown metropolitan market served. Two of the stations listed as
Little Rock stations serve the surrounding communities outside of
Little Rock.

-- Pursuant to FCC rules and regulations, many AM radio stations are
licensed to operate at a reduced power during nighttime
broadcasting hours, which results in reducing the radio station's
coverage during those hours of operation. Both power ratings are
shown, where applicable.

-- License renewal applications have been filed for the listed
stations showing a license expiration date of October 1, 1997,
February 1, 1998 or August 1, 1998, and the expiration of the
licenses is stayed during the pendency of these renewal
proceedings. A petition to deny the renewal applications for four
of Citadel Broadcasting's Salt Lake City stations has been filed
with the FCC, citing alleged violations of the FCC's policies
concerning equal employment opportunities. In September 1998, the
U.S. Court of Appeals for the District of Columbia Circuit, in
Lutheran Church-Missouri Synod v. FCC, held most aspects of the
FCC's

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equal employment opportunity rules to be unconstitutional, thus
invalidating them. The status of pending petitions to deny license
renewals based on alleged equal employment opportunity violations was
rendered uncertain by the Court's decision. The FCC is currently
considering how to deal with such petitions, and has proposed
adoption of new equal employment opportunity rules that address the
Court's concerns. Should the FCC find that these Citadel Broadcasting
Salt Lake City stations lacked equal employment opportunity policies
and procedures that were effective, the FCC could penalize the
stations in the form of fines, generally $10,000 to $15,000,
reporting conditions (the stations would be required to file with the
FCC periodic equal employment opportunity documentation), and/or
renewal of licenses for less than the standard 8-year period. In rare
cases, the FCC may order hearings on equal employment opportunity
violations.

-- KAFN-FM in Little Rock is under construction and has not yet
commenced operations. WYOS-FM in Binghamton operates pursuant to
a construction permit. An application for a license to cover the
construction permit has been filed with the FCC. Expiration of
the construction permit is stayed during the pendency of that
application.

-- Pending their acquisition by Citadel Broadcasting, Citadel
Broadcasting provides sales and marketing services to stations
KSPZ-FM, KVOR-AM and KTWK-AM in Colorado Springs, Colorado,
stations KEYF-AM and KEYF-FM in Spokane, Washington and station
WKQV-AM in Wilkes-Barre/Scranton, Pennsylvania, under joint sales
agreements. Citadel Broadcasting provides sales, programming and
marketing services to station KXXL-FM in Reno, Nevada and,
pending its acquisition by Citadel Broadcasting, WKQV-FM in
Wilkes-Barre/Scranton, Pennsylvania, under local marketing
agreements.

<TABLE>
<CAPTION>
EXPIRATION
HAAT DATE OF
FCC IN POWER IN FCC
MARKET STATION CLASS METERS KILOWATTS FREQUENCY LICENSE
------ ------- ----- ------ --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Providence, RI................... WPRO-AM B NA 5.0 630 kHz 04-01-06
WPRO-FM B 168 39.0 92.3 MHz 04-01-06
WSKO-AM B NA 5.0 790 kHz 04-01-06
WWLI-FM B 152 50.0 105.1 MHz 04-01-06
WXEX-FM A 163 2.3 99.7 MHz 04-01-06
WHKK-FM A 90 4.2 100.3 04-01-06
MHz......
Salt Lake City, UT............... KCNR-AM B NA 10.0/0.195 860 kHz 10-01-97
KUBL-FM C 1140 26.0 93.3 MHz 10-01-97
KENZ-FM C 869 45.0 107.5 MHz 10-01-97
KBER-FM C 1140 25.0 101.1 MHz 10-01-97
KFNZ-AM B NA 5.0 1320 kHz 10-01-05
KBEE-FM C 894 40.0 98.7 MHz 10-01-05
Wilkes-Barre/Scranton, PA........ WAZL-AM C NA 1.0 1490 kHz 08-01-06
WZMT-FM B 222 19.5 97.9 MHz 08-01-06
WARM-AM B NA 5.0 590 kHz 08-01-06
WMGS-FM B 422 5.3 92.9 MHz 08-01-98
WBHT-FM A 336 0.50 97.1 MHz 08-01-06
*WKQV-AM B NA 10.0/0.5 1550 kHz 08-01-06
*WKQV-FM A 308 0.30 95.7 kHz 08-01-06
WCTP-FM A 235 0.52 94.3 MHz 08-01-06
WCTD-FM A 207 1.45 93.7 MHz 08-01-06
WCDL-AM B NA 5.0/.037 1440 kHz 08-01-98
WEMR-AM B NA 5.0/1.0 1460 kHz 08-01-06
WEMR-FM A 354 0.24 107.7 MHz 08-01-06
Allentown/Bethlehem, PA.......... WCTO-FM B 152 50.0 96.1 MHz 08-01-06
WLEV-FM B 327 10.9 100.7 MHz 08-01-06
</TABLE>

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Baton Rouge, LA.................. *KQXL-FM C2 148 50.0 106.5 MHz 06-01-04
*WXOK-AM B NA 5.0/1.0 1460 kHz 06-01-04
*WEMX-FM C1 299 100.0 94.1 MHz 06-01-04
*WKJN-FM C 306 100.0 103.3 MHz 06-01-04
*WIBR-AM B NA 5.0/1.0 1300 kHz 06-01-04
Little Rock, AR.................. KARN-FM A 100 3.0 102.5 MHz 06-01-04
KARN-AM B NA 5.0 920 kHz 06-01-04
KKRN-FM A 100 6.0 101.7 MHz 06-01-04
KIPR-FM C1 286 100.0 92.3 MHz 06-01-04
KOKY-FM A 118 4.10 102.1 MHz 06-01-04
KLAL-FM C2 95 50.0 107.7 MHz 06-01-04
KAFN-FM A 100 6.0 102.5 MHz 06-01-04
KLIH-AM B NA 2.0/1.2 1250 kHz 06-01-04
KURB-FM C 392 100.0 98.5 MHz 06-01-04
KVLO-FM C2 150 50.0 102.9 MHz 06-01-04
KAAY-AM A NA 50.0 1090 kHz 06-01-04
Spokane, WA...................... KGA-AM A NA 50.0 1510 kHz 02-01-06
KDRK-FM C 725 56.0 93.7 MHz 02-01-06
KJRB-AM B NA 5.0 790 kHz 02-01-06
KAEP-FM C 582 100.0 105.7 MHz 02-01-06
*KEYF-AM B NA 5.0 1050 kHz 02-01-06
*KEYF-FM C 490 100.0 101.1 MHz 02-01-98
*KNJY-FM C2 432 5.5 103.9 MHz 02-01-06
Colorado Springs, CO............. KKFM-FM C 698 71.0 98.1 MHz 04-01-05
KKMG-FM C 695 57.0 98.9 MHz 04-01-05
*KSPZ-FM C 649 72.0 92.9 MHz 04-01-05
*KVOR-AM B NA 5.0/1.0 1300 kHz 04-01-05
*KTWK-AM B NA 3.3/1.5 740 kHz 04-01-05
Charleston, SC................... *WSSX-FM C 317 100.0 95.1 MHz 12-01-03
*WWWZ-FM C2 150 50.0 93.3 MHz 12-01-03
*WMGL-FM C3 128.9 6.5 101.7 MHz 12-01-03
*WSUY-FM C 539.5 100.0 96.9 MHz 12-01-03
*WNKT-FM C 299.9 100.0 107.5 MHz 12-01-03
*WTMA-AM B NA 5.0/1.0 1250 kHz 12-01-03
*WTMZ-AM B NA 0.50 910 kHz 12-01-03
*WXTC-AM B NA 5.0 1390 kHz 12-01-03
Lafayette, LA.................... *KFXZ-FM A 151 2.6 106.3 MHz 06-01-04
*KNEK-FM C3 100 25.0 104.7 MHz 06-01-04
*KNEK-AM B NA 0.25 1190 kHz 06-01-04
*KRRQ-FM C2 135 50.0 95.5 MHz 06-01-04
Modesto, CA...................... KANM-AM B NA 1.0 970 kHz 12-01-05
KATM-FM B 152 50.0 103.3 MHz 12-01-05
KHKK-FM B 152 50.0 104.1 MHz 12-01-05
KDJK-FM A 624 0.071 103.9 MHz 12-01-05
KHOP-FM B 193 29.5 95.1 MHz 12-01-05

Saginaw/Bay City, MI............. WKQZ-FM C2 169 39.2 93.3 MHz 10-01-04
WMJK-FM A 151 2.6 100.9 MHz 10-01-04
WIOG-FM B 244 86 102.5 MHz 10-01-04
WMJA-FM A 126 2.9 104.5 MHz 10-01-04
WGER-FM A 116 2.05 106.3 MHz 10-01-04
WSGW-AM B NA 5.0/1.0 790 kHz 10-01-04
</TABLE>

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Muncie, IN....................... *WMDH-FM B 152.4 50.0 102.5 MHz 08-01-04
*WMDH-AM B NA 0.25 1550 kHz 08-01-04

Kokomo, IN....................... *WWKI-AM B 143.3 50.0 100.5 MHz 08-01-04
</TABLE>

Ownership Matters. The Communications Act of 1934 prohibits the assignment
of a broadcast license or the transfer of control of a broadcast license without
the prior approval of the FCC. In determining whether to assign, transfer, grant
or renew a broadcast license, the FCC considers a number of factors pertaining
to the licensee, including compliance with various rules limiting common
ownership of media properties, the character of the licensee and those persons
holding attributable interests therein, and compliance with the Communications
Act of 1934's limitation on alien ownership, as well as compliance with other
FCC policies, including equal employment opportunity requirements.

Once a station purchase agreement has been signed, an application for FCC
consent to assignment of license or transfer of control, depending upon whether
the underlying transaction is an asset purchase or stock acquisition, is filed
with the FCC. Approximately 10 to 15 days after this filing, the FCC normally
publishes a notice assigning a file number to the application and advising that
the application has been accepted for filing. This notice begins a 30-day
statutory waiting period, which provides the opportunity for third parties to
file formal petitions to deny the transaction. Informal objections may be filed
any time prior to grant of an application. The FCC staff will normally review
the application in this period and seek further information and amendments to
the application if it has questions.

Once the 30-day public notice period ends, the staff will complete its
processing, assuming that no petitions or informal objections were received and
that the application is otherwise consistent with FCC rules and policies. The
staff often grants the application by delegated authority approximately 10 to 20
days after the public notice period ends. At this point, the parties are legally
authorized to close the purchase, although the FCC action is not legally a final
order. If there is a backlog of applications, the processing period can extend
to 30 days or more.

Public notice of the FCC staff grant is usually issued about a week after
the grant is made, stating that the grant was effective when the staff made the
grant. On the date of this notice, another 30-day period begins, within which
time interested parties can file petitions seeking either staff reconsideration
or full FCC review of the staff action. During this time the grant can still be
modified, set aside or stayed, and is not a final order. In the absence of a
stay, however, the seller and buyer are not prevented from closing despite the
absence of a

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final order. Also, within 40 days after the public notice of the grant, the full
FCC can review and reconsider the staff's grant on its own motion. Thus, during
the additional 10 days beyond the 30-day period available to third parties, the
grant is still not final. In the event that review by the full FCC is requested
and the FCC subsequently affirms the staff's grant of the application,
interested parties may thereafter seek judicial review in the United States
Court of Appeals for the District of Columbia Circuit within thirty days of
public notice of the full FCC's action. In the event the Court affirms the FCC's
action, further judicial review may be sought by seeking rehearing en banc from
the Court of Appeals or by certiorari from the United States Supreme Court.

In the absence of the submission of a timely request for reconsideration,
administrative review or judicial review, the FCC staff's grant of an
application becomes final by operation of law. Upon the occurrence of that
event, counsel is able to deliver an opinion that the FCC's grant is no longer
subject to administrative or judicial review, although such action can
nevertheless be set aside in rare circumstances, such as fraud on the agency by
a party to the application.

The pendency of a license renewal application can alter the aforementioned
timetables because the FCC normally will not issue an unconditional assignment
grant if the station's license renewal is pending.

Under the Communications Act of 1934, a broadcast license may not be
granted to or held by a corporation that has more than one-fifth of its capital
stock owned or voted by aliens or their representatives, by foreign governments
or their representatives, or by non-U.S. corporations. Under the Communications
Act of 1934, a broadcast license also may not be granted to or held by any
corporation that is controlled, directly or indirectly, by any other corporation
more than one-fourth of whose capital stock is owned or voted by aliens or their
representatives, by foreign governments or their representatives, or by non-U.S.
corporations. These restrictions apply in modified form to other forms of
business organizations, including partnerships. Each of Citadel Broadcasting and
Citadel Communications therefore may be restricted from having more than
one-fourth of its stock owned or voted by aliens, foreign governments or
non-U.S. corporations. The Certificate of Incorporation of Citadel Broadcasting
and the Certificate of Incorporation of Citadel Communications contain
provisions which permit Citadel Broadcasting and Citadel Communications to
prohibit alien ownership and control consistent with the prohibitions contained
in the Communications Act of 1934.

The Communications Act of 1934 and FCC rules also generally restrict the
common ownership, operation or control of radio broadcast stations serving the
same local market, of a radio broadcast station and a television broadcast
station serving the same local market, and of a radio broadcast station and a
daily newspaper serving the same local market. Under these cross-ownership
rules, absent waivers, neither Citadel Broadcasting nor Citadel Communications
would be permitted to acquire any daily newspaper or television broadcast
station (other than low power television) in a local market where it then owned
any radio broadcast station. The FCC's rules provide for the liberal grant of a
waiver of the rule prohibiting common ownership of radio and television stations
in the same geographic market in the top 25 television markets if certain
conditions are satisfied. The Telecommunications Act of 1996 extends this waiver
policy to stations in the top 50 television markets, although the FCC has not
yet implemented this change.

In response to the Telecommunications Act of 1996, the FCC amended its
multiple ownership rules to eliminate the national limits on ownership of AM and
FM stations. The

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FCC's broadcast multiple ownership rules restrict the number of radio stations
one person or entity may own, operate or control on a local level. These limits
are:

(1) in a market with 45 or more commercial radio stations, an entity may
own up to eight commercial radio stations, not more than five of which are in
the same service (FM or AM);

(2) in a market with more than 29 but less than 45 commercial radio
stations, an entity may own up to seven commercial radio stations, not more than
four of which are in the same service;

(3) in a market with more than 14 but less than 30 commercial radio
stations, an entity may own up to six commercial radio stations, not more than
four of which are in the same service;

(4) in a market with 14 or fewer commercial radio stations, an entity may
own up to five commercial radio stations, not more than three of which are in
the same service, except that an entity may not own more than 50% of the
stations in such market.

None of these multiple ownership rules requires any change in Citadel
Broadcasting's current ownership of radio broadcast stations. However, these
rules will limit the number of additional stations which Citadel Broadcasting
may acquire in the future in certain of its markets.

Because of these multiple and cross-ownership rules, a purchaser of voting
stock of either Citadel Broadcasting or Citadel Communications which acquires an
attributable interest in Citadel Broadcasting or Citadel Communications may
violate the FCC's rule if it also has an attributable interest in other
television or radio stations, or in daily newspapers, depending on the number
and location of those radio or television stations or daily newspapers. Such a
purchaser also may be restricted in the companies in which it may invest, to the
extent that these investments give rise to an attributable interest. If an
attributable shareholder of Citadel Broadcasting or Citadel Communications
violates any of these ownership rules, Citadel Broadcasting or Citadel
Communications may be unable to obtain from the FCC one or more authorizations
needed to conduct its radio station business and may be unable to obtain FCC
consents for particular future acquisitions.

The FCC generally applies its television/radio/newspaper cross-ownership
rules and its broadcast multiple ownership rules by considering the
attributable, or cognizable interests held by a person or entity. A person or
entity can have an interest in a radio station, television station or daily
newspaper by being an officer, director, partner or shareholder of a company
that owns that station or newspaper. Whether that interest is cognizable under
the FCC's ownership rules is determined by the FCC's attribution rules. If an
interest is attributable, the FCC treats the person or entity who holds that
interest as the owner of the radio station, television station or daily
newspaper in question, and therefore subject to the FCC's ownership rules.

With respect to a corporation, officers and directors and persons or
entities that directly or indirectly can vote 5% or more of the corporation's
stock, 10% or more of the corporation's stock in the case of insurance
companies, investment companies, bank trust departments and certain other
passive investors that hold the stock for investment purposes only, generally
are attributed with ownership of whatever radio stations, television stations
and daily newspapers the corporation owns.

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With respect to a partnership, the interest of a general partner is
attributable, as is the interest of any limited partner who is materially
involved in the media-related activities of the partnership. Debt instruments,
nonvoting stock, options and warrants for voting stock that have not yet been
exercised, limited partnership interests where the limited partner is not
materially involved in the media-related activities of the partnership, and
minority (under 5%) voting stock, generally do not subject their holders to
attribution. However, the FCC is currently reviewing its rules on attribution of
broadcast interests, and it may adopt stricter criteria. See "--Proposed
Changes" below.

In addition, the FCC has a cross-interest policy that under certain
circumstances could prohibit a person or entity with an attributable interest in
a broadcast station or daily newspaper from having a meaningful nonattributable
interest in another broadcast station or daily newspaper in the same local
market. Among other things, meaningful interests could include significant
equity interests, including non-voting stock, voting stock and limited
partnership interests, and significant employment positions. This policy may
limit the permissible investments a purchaser of Citadel Broadcasting's or
Citadel Communications' voting stock may make or hold.

The FCC has also been more aggressive in examining issues of market revenue
share concentration when considering radio station acquisitions. The FCC has
delayed its approval of several pending radio station purchases by various
parties because of market concentration concerns. Moreover, in recent months the
FCC has followed an informal policy of giving specific public notice of its
intention to conduct additional ownership concentration analyses and soliciting
public comment on the issue of concentration and its effect on competition and
diversity in connection with certain applications for consent to radio station
acquisitions. Citadel Broadcasting cannot determine at this time the impact that
this policy may have on its business and its operating and acquisition
strategies.

Programming and Operation. The Communications Act of 1934 requires
broadcasters to serve the public interest. Since 1981, the FCC gradually has
relaxed or eliminated many of the more formalized procedures it developed to
promote the broadcast of types of programming responsive to the needs of a
station's community of license. However, licensees continue to be required to
present programming that is responsive to community problems, needs and
interests and to maintain records demonstrating such responsiveness. Complaints
from listeners concerning a station's programming will be considered by the FCC
when it evaluates the licensee's renewal application, but such complaints may be
filed and considered at any time.

Stations also must pay regulatory and application fees and follow various
FCC rules that regulate, among other things, political advertising, the
broadcast of obscene or indecent programming, sponsorship identification and
technical operations, including limits on radio frequency radiation. In
addition, licensees must develop and implement programs designed to promote
equal employment opportunities and must submit reports to the FCC on these
matters annually and in connection with a renewal application. The broadcast of
contests and lotteries also is regulated by FCC rules.

Failure to observe these or other rules and policies can result in the
imposition of various sanctions, including monetary forfeitures, the grant of
short (less than the maximum) renewal terms or, for particularly egregious
violations, the denial of a license renewal application or the revocation of a
license.

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In 1985, the FCC adopted rules regarding human exposures to levels of radio
frequency (RF) radiation. These rules require applicants for new broadcast
stations, renewals of broadcast licenses or modifications of existing licenses
to inform the FCC at the time of filing such applications whether a new or
existing broadcast facility would expose people to RF radiation in excess of FCC
guidelines. In August 1996, the FCC adopted more restrictive radiation limits.
These limits became effective on September 1, 1997 and govern applications filed
after that date. Citadel Broadcasting anticipates that such regulations will not
have a material effect on its business.

Local Marketing Agreements. Over the past five years, a number of radio
stations, including several of Citadel Broadcasting's stations, have entered
into what commonly are referred to as local marketing agreements or time
brokerage agreements. These agreements take various forms. Separately-owned and
licensed stations may agree to function cooperatively in terms of programming,
advertising sales and other matters, subject to compliance with the antitrust
laws and the FCC's rules and policies, including the requirement that the
licensee of each station maintains independent control over the programming and
other operations of its own station. The FCC has held that such agreements do
not violate the Communications Act of 1934 as long as the licensee of the
station that is being substantially programmed by another entity maintains
complete responsibility for, and control over, operations of its broadcast
stations and otherwise ensures compliance with applicable FCC rules and
policies.

A station that brokers substantial time on another station in its market or
engages in a local marketing agreement with a station in the same market will be
considered to have an attributable ownership interest in the brokered station
for purposes of the FCC's ownership rules, discussed above. As a result, a
broadcast station may not enter into a local marketing agreement that allows it
to program more than 15% of the broadcast time, on a weekly basis, of another
local station that it could not own under the FCC's local multiple ownership
rules. FCC rules also prohibit the broadcast licensee from simulcasting more
than 25% of its programming on another station in the same broadcast service
(that is, AM-AM or FM-FM) where the two stations serve substantially the same
geographic area, whether the licensee owns the stations or owns one and programs
the other through a local marketing agreement arrangement.

Another example of a cooperative agreement between differently owned radio
stations in the same market is a joint sales agreement, whereby one station
sells advertising time in combination, both on itself and on a station under
separate ownership. In the past, the FCC has determined that issues of joint
advertising sales should be left to antitrust enforcement. Citadel Broadcasting
has entered into several JSAs whereby it sells time on behalf of other local
stations. Currently, joint sales agreements are not deemed by the FCC to be
attributable. However, the FCC has outstanding a notice of proposed rulemaking,
which, if adopted, would require Citadel Broadcasting to terminate any joint
sales agreement it might have with a radio station with which Citadel
Broadcasting could not have a local marketing agreement. Currently, the only
Citadel Broadcasting groups that would be so affected would be its groups in
Spokane and Colorado Springs. See "--Station Portfolio" and "--Legal
Proceedings" and "The Pending Transactions."

Proposed Changes. In December, 1994, the FCC initiated a proceeding to
solicit comment on whether it should revise its radio and television ownership
attribution rules by, among other proposals:

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-- raising the basic benchmark for attributing ownership in a
corporate licensee from 5% to 10% of the licensee's voting stock,

-- increasing from 10% to 20% of the licensee's voting stock the
attribution benchmark for passive investors in corporate licensees,

-- restricting the availability of the attribution exemption when a
single party controls more than 50% of the voting stock, and

-- considering local marketing agreements, joint sales agreements,
debt and non-voting stock interests to be attributable under
certain circumstances.

No decision has been made by the FCC in these matters. At this time, no
determination can be made as to what effect, if any, this proposed rulemaking
will have on Citadel Broadcasting. However, if the FCC changes its rules so that
certain cross-interests arising from non-voting stock ownership would be counted
as attributable ownership interests, the interests of ABRY Broadcasting Partners
II, L.P., a significant stockholder of Citadel Communications, could be
attributed to Citadel Broadcasting. This attribution could preclude Citadel
Broadcasting from acquiring stations in markets where ABRY already has
attributable broadcast interests.

The Congress and the FCC from time to time have under consideration, and
may in the future consider and adopt, new laws, regulations and policies
regarding a wide variety of matters that could, directly or indirectly, affect
the operation, ownership and profitability of Citadel Broadcasting's radio
stations, result in the loss of audience share and advertising revenue for
Citadel Broadcasting's radio stations, and affect the ability of Citadel
Broadcasting to acquire additional radio stations or finance such acquisitions.
Such matters include:

-- proposals to impose spectrum use or other fees on FCC licensees,

-- the FCC's equal employment opportunity rules and matters relating
to political broadcasting,

-- technical and frequency allocation matters,

-- proposals to restrict or prohibit the advertising of beer, wine and
other alcoholic beverages on radio,

-- changes in the FCC's cross-interest, multiple ownership and
cross-ownership policies,

-- changes to broadcast technical requirements,

-- proposals to allow telephone or cable television companies to
deliver audio and video programming to the home through existing
phone or other communication lines,

-- proposals to limit the tax deductibility of advertising expenses by
advertisers, and

-- proposals to auction the right to use the radio broadcast spectrum
to the highest bidder, instead of granting FCC licenses and
subsequent license renewals without such bidding.

The FCC, on April 2, 1997, awarded two licenses for the provision of
satellite digital audio radio services. Under rules adopted for this service,
licensees must begin construction of their space stations within one year, begin
operating within four years, and be operating
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their entire system within six years. Citadel Broadcasting cannot predict
whether the service will be subscription or advertiser supported. Digital
technology also may be used in the future by terrestrial radio broadcast
stations either on existing or alternate broadcasting frequencies, and the FCC
has stated that it will consider making changes to its rules to permit AM and FM
radio stations to offer digital sound following industry analysis of technical
standards. In addition, the FCC has authorized an additional 100 kHz of
bandwidth for the AM band and on March 17, 1997, adopted an allotment plan for
the expanded band which identified the 88 AM radio stations selected to move
into the band. At the end of a five-year transition period, those licensees will
be required to return to the FCC either the license for their existing AM band
station or the license for the expanded AM band station.

Citadel Broadcasting cannot predict whether any proposed changes will be
adopted or what other matters might be considered in the future, nor can it
judge in advance what impact, if any, the implementation of any of these
proposals or changes might have on its business.

The foregoing is a brief summary of certain provisions of the
Communications Act of 1934 and of specific FCC rules and policies. This
description does not purport to be comprehensive and reference should be made to
the Communications Act of 1934, the FCC's rules and the public notices and
rulings of the FCC for further information concerning the nature and extent of
federal regulation of radio broadcast stations.

Federal Antitrust Considerations. Citadel Broadcasting is aware that the
Federal Trade Commission and the United States Department of Justice, which
evaluate transactions to determine whether those transactions should be
challenged under the federal antitrust laws, have been increasingly active
recently in their review of radio station acquisitions, particularly where an
operator proposes to acquire additional stations in its existing markets.

For an acquisition meeting certain size thresholds, the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules promulgated
thereunder require the parties to file Notification and Report Forms with the
Federal Trade Commission and the Department of Justice and to observe specified
waiting period requirements before consummating the acquisition. During the
initial 30-day period after the filing, the agencies decide which of them will
investigate the transaction. If the investigating agency determines that the
transaction does not raise significant antitrust issues, then it will either
terminate the waiting period or allow it to expire after the initial 30 days. On
the other hand, if the agency determines that the transaction requires a more
detailed investigation, then, at the conclusion of the initial 30-day period, it
will issue a formal request for additional information. The issuance of a formal
request extends the waiting period until the twentieth calendar day after the
date of substantial compliance by all parties to the acquisition. Thereafter,
such waiting period may only be extended by court order or with the consent of
the parties. In practice, complying with a formal request can take a significant
amount of time. In addition, if the investigating agency raises substantive
issues in connection with a proposed transaction, then the parties frequently
engage in lengthy discussions or negotiations with the investigating agency
concerning possible means of addressing those issues, including but not limited
to persuading the agency that the proposed acquisition would not violate the
antitrust laws, restructuring the proposed acquisition, divestiture of other
assets of one or more parties, or abandonment of the transaction. Such
discussions and negotiations can be time consuming, and the parties may agree to
delay completion of the acquisition during their pendency.

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At any time before or after the completion of a proposed acquisition, the
Federal Trade Commission or the Department of Justice could take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the acquisition or seeking divestiture of
the business acquired or other assets of Citadel Broadcasting. Acquisitions that
are not required to be reported under the Hart-Scott-Rodino Act may be
investigated by the Federal Trade Commission or the Department of Justice under
the antitrust laws before or after completion. In addition, private parties may
under certain circumstances bring legal action to challenge an acquisition under
the antitrust laws.

Citadel Broadcasting has received early termination of the applicable
waiting period under the Hart-Scott-Rodino Act in regard to the pending
acquisition of stations in Charleston, South Carolina, Binghamton, New York and
Muncie and Kokomo, Indiana and is awaiting termination of the applicable waiting
period in regard to its sale of stations in Eugene and Medford, Oregon,
Tri-Cities, Washington, Billings, Montana and Johnstown and State College,
Pennsylvania. No other pending transaction is subject to the Hart-Scott-Rodino
Act.

As part of its increased scrutiny of radio station acquisitions, the
Department of Justice has stated publicly that it believes that commencement of
operations under local marketing agreements, joint sales agreements and other
similar agreements customarily entered into in connection with radio station
transfers prior to the expiration of the waiting period under the
Hart-Scott-Rodino Act could violate that Act. In connection with acquisitions
subject to the waiting period under the Hart-Scott-Rodino Act, Citadel
Broadcasting will not commence operation of any affected station to be acquired
under a local marketing agreement or similar agreement until the waiting period
has expired or been terminated.

Citadel Broadcasting has received civil investigative demands from the
Antitrust Division of the Department of Justice. One demand addresses Citadel
Broadcasting's acquisition of KRST-FM in Albuquerque, New Mexico, and the second
investigation addresses Citadel Broadcasting's joint sales agreement relating to
stations in Spokane, Washington and Colorado Springs, Colorado. See "--Legal
Proceedings."

SEASONALITY

Seasonal revenue fluctuations are common in the radio broadcasting industry
and are primarily the result of fluctuations in advertising expenditures by
retailers. Citadel Broadcasting's revenue is typically lowest in the first
quarter and highest in the second and fourth quarters. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operation--General."

TRADEMARKS

Citadel Broadcasting owns a number of trademarks and service marks,
including the federally registered marks Cat Country, Supertalk and the Cat
Country logo. Citadel Broadcasting also owns a number of marks registered in
various states. Citadel Broadcasting considers such trademarks and service marks
to be important to its business. See "--Operating Strategy--Targeted
Programming."

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EMPLOYEES

At January 31, 1998, Citadel Broadcasting employed approximately 1,600
persons. None of these employees are covered by collective bargaining
agreements, and Citadel Broadcasting considers its relations with its employees
to be good.

Citadel Broadcasting employs several on-air personalities with large loyal
audiences in their respective markets. Citadel Broadcasting generally enters
into employment agreements with these personalities to protect its interests in
those relationships that it believes to be valuable. The loss of one of these
personalities could result in a short-term loss of audience share, but Citadel
Broadcasting does not believe that any such loss would have a material adverse
effect on Citadel Broadcasting's financial condition or results of operations.

PROPERTIES AND FACILITIES

The types of properties required to support each of Citadel Broadcasting's
radio stations include offices, studios, transmitter sites and antenna sites. A
station's studios are generally housed with its offices in business districts.
The transmitter sites and antenna sites are generally located so as to provide
maximum market coverage.

Citadel Broadcasting currently owns studio facilities in Spokane,
Washington; Billings, Montana; Tri-Cities, Washington; East Providence, Rhode
Island; Little Rock, Arkansas; Boise, Idaho; Patton Township (State College),
Lower Yoder Township (Johnstown), Williams Township (Allentown) and Tunkhannock
(Wilkes-Barre/Scranton), Pennsylvania; and Carrollton Township (Saginaw),
Michigan, and it owns transmitter and antenna sites in Reno, Nevada; Salt Lake
City, Utah; Spokane and Tri-Cities, Washington; Tracy (Modesto), California;
Billings, Montana; Santa Fe and Albuquerque, New Mexico; Medford, Oregon; East
Providence and Johnston, Rhode Island; Little Rock, Arkansas; Patton Township
(State College), Croyle Township (Johnstown), Mt. Joy Township
(Harrisburg/York), Williams Township and Salisbury Township (Allentown), and
Hanover Township, Plymouth Township, Carbondale and Tunkhannock
(Wilkes-Barre/Scranton), Pennsylvania; and Carrollton Township and Blumfield
Township (Saginaw) and Mt. Forest Township (Bay City), Michigan. Citadel
Broadcasting will acquire additional real estate and will dispose of certain
real estate in connection with the pending transactions. Citadel Broadcasting
leases its remaining studio and office facilities, including office space in
Tempe, Arizona and Las Vegas, Nevada which is not related to the operations of a
particular station, and it leases its remaining transmitter and antenna sites.
Citadel Broadcasting does not anticipate any difficulties in renewing any
facility leases or in leasing alternative or additional space, if required.
Citadel Broadcasting owns substantially all of its other equipment, consisting
principally of transmitting antennae, transmitters, studio equipment and general
office equipment.

No one property is material to Citadel Broadcasting's operations. Citadel
Broadcasting believes that its properties are generally in good condition and
suitable for its operations; however, Citadel Broadcasting continually looks for
opportunities to upgrade its properties and intends to upgrade studios, office
space and transmission facilities in several markets.

Substantially all of Citadel Broadcasting's properties and equipment serve
as collateral for Citadel Broadcasting's obligations under its credit facility.
See "Description of Indebtedness--Existing Loan Agreement."

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LEGAL PROCEEDINGS

Citadel Broadcasting currently and from time to time is involved in
litigation incidental to the conduct of its business, but it is not a party to
any lawsuit or proceeding which, in the opinion of Citadel Broadcasting, is
likely to have a material adverse effect on Citadel Broadcasting.

Citadel Broadcasting received civil investigative demands from the
Department of Justice pursuant to which the Department of Justice requested
information from Citadel Broadcasting to determine whether Citadel Broadcasting
violated particular antitrust laws. The first investigative demand was issued on
September 27, 1996 and concerns Citadel Broadcasting's acquisition of all of the
assets of KRST-FM in Albuquerque, New Mexico on October 9, 1996. The demand
requested written answers to interrogatories and the production of documents
concerning the radio station market in Albuquerque, in general, and the KRST
acquisition, in particular, to enable the Department of Justice to determine,
among other things, whether the KRST acquisition would result in excessive
concentration in the market. Citadel Broadcasting responded to the demand. The
Department of Justice requested supplemental information on January 27, 1997, to
which Citadel Broadcasting also responded. There have been no communications
since that time and, at present, Citadel Broadcasting has received no indication
from the Department of Justice regarding its intended future actions. If the
Department of Justice were to proceed with and successfully challenge the KRST
acquisition, Citadel Broadcasting may be required to divest one or more radio
stations in Albuquerque.

The second investigation was initiated on October 9, 1996 and concerned
Citadel Broadcasting's joint sales agreement relating to a total of eight radio
stations in Spokane, Washington and Colorado Springs, Colorado and which became
effective in January 1996. Pursuant to the investigation, the Department of
Justice requested information to determine whether the joint sales agreement
constituted a de facto merger, resulting in a combination or contract in
restraint of trade. Citadel Broadcasting provided the requested information and
met with the Department of Justice concerning this matter. If the Department of
Justice were to proceed with and successfully challenge the joint sales
agreement, Citadel Broadcasting may be required to terminate the joint sales
agreement. At this time, Citadel Broadcasting cannot predict the impact on
Citadel Broadcasting, if any, of these proceedings or any future Department of
Justice demands. See "Risk Factors--Limitations on Acquisition Strategy" and
"Risk Factors--Potential Difficulties in Completing Pending and Future
Transactions Due to Antitrust Review."

On February 2, 1999, Citadel Broadcasting entered into a letter of intent
with Capstar Acquisition Company, Inc. regarding the exchange of certain radio
stations in Colorado Springs and the purchase by Citadel Broadcasting of other
stations in Spokane and Colorado Springs. If completed, the transaction would
result in the termination of the Spokane/ Colorado Springs joint sales
agreement. There can be no assurance, however, that the parties will reach
definitive agreements or that the transactions will be completed. See "The
Pending Transactions."

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THE PENDING TRANSACTIONS

There are several transactions currently pending which, if completed, would
result in Citadel Broadcasting purchasing 20 FM and 14 AM radio stations and
selling 19 FM and 7 AM radio stations.

THE HARRISBURG/CARLISLE ACQUISITION

WHYL-FM and WHYL-AM, Carlisle, Pennsylvania. On October 29, 1998, Citadel
Broadcasting and Citadel License entered into an Asset Purchase Agreement with
Zeve Broadcasting Company and H. Lincoln Zeve under which Citadel Broadcasting
has agreed to purchase from Zeve Broadcasting substantially all of the assets of
radio stations WHYL-FM and WHYL-AM serving the Harrisburg/Carlisle market for an
aggregate purchase price of approximately $4.25 million in cash. Citadel
Broadcasting has delivered to Zeve Broadcasting an irrevocable letter of credit
in favor of Zeve Broadcasting, issued by BankBoston, N.A., in the amount of
$250,000 to secure Citadel Broadcasting's obligations under the asset purchase
agreement.

The asset purchase agreement contains customary representations and
warranties of the parties, and consummation of the transaction is subject to
conditions including (1) the receipt of FCC consent to the transfer of the
licenses for WHYL-FM and WHYL-AM to Citadel Broadcasting and (2) the receipt of
consents to the assignment to Citadel Broadcasting of certain contracts relating
to WHYL-FM and WHYL-AM. An application seeking FCC approval was filed with the
FCC on November 9, 1998, and a grant of the application was received on December
30, 1998. Citadel Broadcasting has also entered into a local marketing agreement
with Zeve Broadcasting pursuant to which Citadel Broadcasting markets commercial
advertising time and provides programming for WHYL-FM and WHYL-AM pending their
acquisition by Citadel Broadcasting.

On October 29, 1998, Citadel Broadcasting entered into an Agreement of Sale
with H. Lincoln Zeve to purchase real estate used by Zeve Broadcasting in the
operation of WHYL-FM and WHYL-AM for a purchase price of approximately $250,000
in cash.

Citadel Broadcasting anticipates that if the acquisition of WHYL-FM and
WHYL-AM and the real estate used by Zeve Broadcasting in the operation of the
stations closes, it will close in February 1999. At the closing, Citadel
Broadcasting expects to enter into a one-year employment agreement with Mr.
Zeve. Upon consummation of this transaction, Citadel Broadcasting will own two
FM radio stations and one AM radio station in the Harrisburg/ Carlisle market,
and it will own one FM radio station and one AM radio station in the adjacent
York, Pennsylvania market.

THE BATON ROUGE AND LAFAYETTE ACQUISITION

KQXL-FM, WEMX-FM, WKJN-FM, WXOK-AM and WIBR-AM Baton Rouge, Louisiana and
KFXZ-FM, KNEK-FM, KRRQ-FM and KNEK-AM Lafayette, Louisiana. On November 5, 1998,
Citadel Broadcasting entered into a Purchase Agreement with Citywide
Communications, Inc., P M Investments, Ltd., Providence Investment, Ltd., Peter
Moncrieffe, Donald R. Nelson, Willie E. Tucker, Jr., FINOVA Capital Corporation
and warrantholders of Citywide under which Citadel Broadcasting has agreed to
purchase all of the issued and outstanding shares of capital stock of Citywide
and all of the outstanding warrants to acquire shares of capital stock of
Citywide. The aggregate purchase price is approximately $34.5 million. This
amount includes the repayment of outstanding debt of Citywide and $1.5 million
in payments

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related to noncompetition agreements to be entered into in connection with the
acquisition, but it is net of the $1.0 million in positive working capital that
Citywide is required to have at closing of the acquisition. Citadel Broadcasting
has caused to be delivered to Citywide an irrevocable letter of credit in favor
of Citywide, issued by BankBoston, N.A., in the amount of $1.0 million to secure
Citadel Broadcasting's obligations under the purchase agreement. Citywide
currently, directly or through its wholly-owned subsidiaries, is the licensee of
and owns and operates KQXL-FM, WEMX-FM, WKJN-FM, WXOK-AM, WIBR-AM, KFXZ-FM,
KNEK-FM, KRRQ-FM and KNEK-AM serving the Baton Rouge and Lafayette, Louisiana
markets.

The purchase agreement contains customary representations and warranties of
the parties, and consummation of the transaction is subject to conditions
including (1) the receipt of FCC consent to the transfer of control of the
station licenses to Citadel Broadcasting, (2) the receipt of consents to the
change of control under certain contracts to which Citywide or its wholly-owned
subsidiaries are a party and (3) the existence at closing of a minimum of $1.0
million in positive working capital. An application seeking FCC approval was
filed with the FCC on November 18, 1998, and a grant of the application was
received on January 14, 1999. Citadel Broadcasting anticipates that if the
acquisition of Citywide closes, it will close in the first quarter of 1999. At
the closing, Citadel Broadcasting expects to enter into a three-year employment
agreement with one of the principals of Citywide. Immediately after closing,
Citywide and its wholly-owned subsidiaries will be merged into Citadel
Broadcasting. Citadel Broadcasting does not own any other radio stations in
either Baton Rouge or Lafayette.

THE CHARLESTON/BINGHAMTON/MUNCIE/KOKOMO ACQUISITION

WSSX-FM, WWWZ-FM, WMGL-FM, WSUY-FM, WNKT-FM, WTMA-AM, WTMZ-AM and WXTC-AM,
Charleston, South Carolina, WHWK-FM, WYOS-FM, WAAL-FM, WNBF-AM and WKOP-AM,
Binghamton, New York, WMDH-FM and WMDH-AM, Muncie, Indiana and WWKI-FM, Kokomo,
Indiana. On November 23, 1998, Citadel Broadcasting entered into an Asset
Purchase Agreement with Wicks Broadcast Group Limited Partnership and related
entities to acquire substantially all of the assets of WSSX-FM, WWWZ-FM,
WMGL-FM, WSUY-FM, WNKT-FM, WTMA-AM, WTMZ-AM and WXTC-AM, Charleston, South
Carolina, WHWK-FM, WYOS-FM, WAAL-FM, WNBF-AM and WKOP-AM, Binghamton, New York,
WMDH-FM and WMDH-AM, Muncie, Indiana and WWKI-FM, Kokomo, Indiana, for an
aggregate purchase price of approximately $77.0 million in cash. Citadel
Broadcasting has delivered an irrevocable letter of credit in favor of the
sellers, issued by BankBoston, N.A., in the amount of $5.0 million to secure
Citadel Broadcasting's obligations under the asset purchase agreement.

The asset purchase agreement contains customary representations and
warranties of the parties, and completion of the acquisition of the stations is
subject to conditions including (1) the receipt of FCC consent to the assignment
of the station licenses to Citadel Broadcasting, (2) the expiration or
termination of the applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and (3) the receipt of consents to the
assignment to Citadel Broadcasting of certain contracts relating to the
stations. An application seeking FCC approval was filed with the FCC on December
2, 1998. Citadel Broadcasting received early termination of the applicable
waiting period under the Hart-Scott-Rodino Act on December 18, 1998. Citadel
Broadcasting anticipates that if the acquisition of these

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stations closes, it will close in the second quarter of 1999. Citadel
Broadcasting does not own any other radio stations in these markets.

THE WILKES-BARRE/SCRANTON ACQUISITION

WKQV-FM and WKQV-AM, Wilkes-Barre/Scranton, Pennsylvania. On January 11,
1999, Citadel Broadcasting entered into an Asset Purchase Agreement with Monroe
and Delaware Holdings, Inc. under which Citadel Broadcasting has agreed to
acquire certain assets used or useful in the operation of radio station WKQV-FM
serving the Wilkes-Barre/Scranton market for an aggregate purchase price of
approximately $1.0 million. On January 11, 1999, Citadel Broadcasting also
entered into an Asset Purchase Agreement with Robert C. Cordaro, Inc. under
which Citadel Broadcasting has agreed to acquire certain assets used or useful
in the operation of radio station WKQV-AM serving the Wilkes-Barre/Scranton
market for an aggregate purchase price of approximately $0.4 million. Citadel
Broadcasting has operated WKQV-FM and WKQV-AM under a local marketing agreement
and a joint sales agreement, respectively, since July 1997.

Each of the asset purchase agreements contains customary representations
and warranties of the parties, and completion of each station acquisition is
subject to conditions including (1) the receipt of FCC consent to the assignment
of the station license to Citadel Broadcasting and (2) the receipt of consents
to the assignment to Citadel Broadcasting of certain contracts relating to the
station. The closing of each acquisition is not contingent upon the closing of
the other. Applications seeking FCC approval were filed with the FCC on January
19, 1999. Citadel Broadcasting anticipates that if the acquisitions of WKQV-FM
and WKQV-AM close, they will close in the second quarter of 1999. If these
transactions are completed, Citadel Broadcasting will own seven FM and five AM
radio stations in Wilkes-Barre/Scranton.

THE MARATHON DISPOSITION

KKTT-FM, KEHK-FM and KUGN-AM, Eugene, Oregon, KAKT-FM, KBOY-FM, KCMX-FM,
KTMT-FM, KCMX-AM and KTMT-AM, Medford, Oregon, KEYW-FM, KORD-FM, KXRX-FM,
KTHK-FM and KFLD-AM, Tri-Cities, Washington, KCTR-FM, KKBR-FM, KBBB-FM, KMHK-FM
and KBUL-AM, Billings, Montana, WQKK-FM and WGLU-FM, Johnstown, Pennsylvania and
WQWK-FM, WNCL-FM, WRSC-AM and WBLF-AM, State College, Pennsylvania. On January
13, 1999, Citadel Broadcasting entered into an Asset Purchase Agreement with
Marathon Media, L.P. under which Marathon has agreed to acquire substantially
all of the assets of Citadel Broadcasting's 18 FM radio stations and seven AM
radio stations serving the Eugene, Oregon, Medford, Oregon, Tri-Cities,
Washington, Billings, Montana, Johnstown, Pennsylvania and State College,
Pennsylvania markets for an aggregate purchase price of approximately $26.0
million, consisting of $25.5 million in cash and a $500,000 promissory note. Of
the cash portion, $1.0 million has been deposited into escrow to secure Marathon
Media's obligations under the asset purchase agreement. The promissory note will
bear no interest unless a payment default occurs, and the principal is to be
paid in $100,000 installments on each of the first through fifth anniversaries
of the closing of the transaction. The note will also provide for a mandatory
prepayment upon the occurrence of certain events and will permit optional
prepayment.

The asset purchase agreement contains customary representations and
warranties of the parties, and consummation of the acquisition of the stations
is subject to conditions including

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(1) the receipt of FCC consent to the assignment of the station licenses to
Marathon Media, (2) the expiration or termination of the applicable waiting
periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and (3)
the receipt of consents to the assignment to Marathon Media of certain contracts
relating to the stations. An application seeking FCC approval was filed with the
FCC on February 8, 1999. Citadel Broadcasting anticipates that if the sale of
these stations closes, it will close in the second quarter of 1999. If the
transaction is completed, Citadel Broadcasting expects to use the cash proceeds
to repay debt expected to be outstanding at that time. Citadel Broadcasting does
not own any other radio stations serving these markets.

COLORADO SPRINGS AND SPOKANE TRANSACTIONS

KKLI-FM, KSPZ-FM, KVOR-AM and KTWK-AM, Colorado Springs, Colorado and
KEYF-FM and KEYF-AM, Spokane, Washington. On February 2, 1999, Citadel
Broadcasting entered into a letter of intent with Capstar Acquisition Company,
Inc. under which Citadel Broadcasting has agreed to acquire from Capstar radio
station KSPZ-FM in Colorado Springs in exchange for Citadel Broadcasting's radio
station KKLI-FM in Colorado Springs. There will be no cash purchase price to
either Citadel Broadcasting or Capstar in connection with this exchange. Citadel
Broadcasting has also agreed to acquire radio stations KVOR-AM and KTWK-AM in
Colorado Springs and radio stations KEYF-FM and KEYF-AM in Spokane for the
aggregate purchase price of approximately $10.0 million in cash.

Capstar is acquiring the five stations to be sold to Citadel Broadcasting
in connection with the merger of Capstar and Triathlon Broadcasting Company.
Citadel Broadcasting and Triathlon Broadcasting Company are currently parties to
a joint sales agreement under which Citadel Broadcasting sells advertising for
radio stations KSPZ-FM, KVOR-AM and KTWK-AM as well as one other FM radio
station in Colorado Springs and radio stations KEYF-FM and KEYF-AM and one other
FM and one other AM radio station in Spokane. If the transactions contemplated
by the letter of intent with Capstar are completed, the joint sales agreement
will be terminated.

Completion of the acquisition and disposition of the stations is subject to
conditions including (1) the parties' entry into definitive agreements relating
to the transactions, (2) the receipt of FCC consent to the assignment of the
station licenses to Citadel Broadcasting and to Capstar, as applicable, (3) the
closing of Capstar's merger with Triathlon Broadcasting Company and (4) the
termination of the joint sales agreement. An application seeking FCC approval
was filed with the FCC on February 8, 1999.

The parties intend to complete the foregoing transactions concurrently and
prior to receipt of final orders from the FCC. Until the orders become final,
third parties may file a request for reconsideration or judicial review or the
FCC may reconsider an initial grant on its own motion. Such action could expose
Citadel Broadcasting to a modification or set aside of the initial approval.
There can be no assurance that a modification or set aside will not occur. See
"Business -- Federal Regulation of Radio Broadcasting -- Ownership Matters."

KNJY-FM, Spokane, Washington. On February 2, 1999, Citadel Broadcasting
entered into an Asset Purchase Agreement with AGM-Nevada, L.L.C. under which
Citadel Broadcasting has agreed to acquire substantially all of the assets of
radio station KNJY-FM serving the Spokane market for the purchase price of
approximately $4.2 million. Citadel Broadcasting has delivered an irrevocable
letter of credit in favor of the seller, issued by

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<PAGE> 82

BankBoston, N.A., in the amount of $225,000 to secure Citadel Broadcasting's
obligations under the asset purchase agreement.

The asset purchase agreement contains customary representations and
warranties of the parties, and completion of the acquisition is subject to
conditions including (1) the receipt of FCC consent to the assignment of the
station license to Citadel Broadcasting, (2) the closing of the Spokane
transactions with Capstar discussed above and (3) the receipt of consents to the
assignment to Citadel Broadcasting of contracts relating to the station. An
application seeking FCC approval was filed with the FCC on February 8, 1999.

If the KNJY-FM acquisition and the transactions with Capstar are completed,
Citadel Broadcasting will own four FM and three AM radio stations in Spokane and
three FM and two AM radio stations in Colorado Springs.

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<PAGE> 83

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth the names, ages and positions of the
directors and executive officers of Citadel Broadcasting:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Lawrence R. Wilson............ 53 Chief Executive Officer and Chairman
Donna L. Heffner.............. 39 Vice President, Chief Financial Officer,
Treasurer and Secretary
D. Robert Proffitt............ 45 President and Chief Operating Officer
Stuart R. Stanek.............. 43 Vice President; President--East Region
Peter J. Benedetti............ 35 Vice President; President--Central Region
Edward T. Hardy............... 50 Vice President; President--West Region
Patricia Diaz Dennis.......... 52 Director
Scott E. Smith................ 43 Director
Ted L. Snider, Sr............. 70 Director
John E. von Schlegell......... 44 Director
</TABLE>

Lawrence R. Wilson co-founded and was a general partner of Citadel
Broadcasting's predecessor, Citadel Associates Limited Partnership and Citadel
Associates Montana Limited Partnership, from 1984 to July 1992 and has been the
Chief Executive Officer and Chairman of the Board of Citadel Broadcasting since
it was incorporated in August 1991 and Chief Executive Officer, President and
Chairman of Citadel Communications since it was incorporated in May 1993. Mr.
Wilson also served as President of Citadel Broadcasting from 1991 to October
1998. From 1974 to 1979, Mr. Wilson was Executive Vice President and General
Counsel of Combined Communications Corporation, a national media company, where
he handled all acquisitions and mergers and oversaw the broadcast, newspaper and
outdoor billboard divisions as a part of a five person management committee.
From 1979 to 1986, he was engaged in the private practice of law.

Donna L. Heffner joined Citadel Associates Limited Partnership and Citadel
Associates Montana Limited Partnership in 1988 as Controller. Ms. Heffner has
served as Treasurer and Secretary of Citadel Broadcasting since it was
incorporated in August 1991 and of Citadel Communications since it was
incorporated in May 1993. She has served as Chief Financial Officer of Citadel
Broadcasting and Citadel Communications since July 1992 and May 1993,
respectively. In January 1997, Ms. Heffner became Vice President of Citadel
Broadcasting and Citadel Communications. Ms. Heffner also served as a director
of Citadel Broadcasting from 1992 to 1993 and as a director of Citadel
Communications for several months in 1993. From 1982 to 1985 and in 1987, she
was employed by Price Waterhouse, and in 1986, she was employed by Lowrimore,
Warwick & Company as an accountant.

D. Robert Proffitt joined Citadel Associates Limited Partnership and
Citadel Associates Montana Limited Partnership in 1988 as Vice
President--General Manager of KKFM-FM in Colorado Springs. In 1991, he was
appointed Vice President of Citadel Broadcasting, and in 1993, he was appointed
Vice President of Citadel Communications, Mr. Proffitt took over as General
Manager of Citadel Broadcasting's Albuquerque operations in 1994. Mr. Proffitt
served as President of Central Region for Citadel Broadcasting from June 1997 to

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<PAGE> 84

October 1998, and he became President and Chief Operating Officer of Citadel
Broadcasting in October 1998.

Stuart R. Stanek joined Citadel Associates Limited Partnership and Citadel
Associates Montana Limited Partnership in 1986 as a General Manager of KKFM-FM
in Colorado Springs. In 1988, he became General Manager of KCNR-AM/KUBL-FM in
Salt Lake City, in 1991, he was appointed Vice President of Citadel
Broadcasting, in 1992 he was elected to the Board of Directors of Citadel
Broadcasting and in 1993, he was appointed Vice President and elected to the
Board of Directors of Citadel Communications. He served as a Director of Citadel
Broadcasting and Citadel Communications until August 1996. Mr. Stanek became
President of East Region for Citadel Broadcasting in June 1997.

Peter J. Benedetti joined Citadel Broadcasting in April 1995 as Sales
Manager for KMGA-FM in Albuquerque and also became Sales Manager for KHFM-FM in
Albuquerque upon Citadel Broadcasting's acquisition of that station in June
1996. From January 1997 to July 1997, Mr. Benedetti was Director of Sales of
Citadel Broadcasting's Salt Lake City radio station group, and from July 1997 to
October 1998, he served as Vice President and General Manager of that radio
station group. In October 1998 Mr. Benedetti became Vice President and President
of the Central Region for Citadel Broadcasting and Vice President of Citadel
Communications. Prior to joining Citadel Broadcasting, he served as an account
executive for Jacor Communications' KBPI-FM in Denver, Colorado. Mr. Benedetti
currently serves on the Board of Directors of the Utah Broadcasters Association
and the Salt Lake City Radio Broadcasters Association.

Edward T. Hardy founded and was elected President and Chief Executive
Officer of Deschutes River Broadcasting, Inc. in 1994. Mr. Hardy joined Citadel
Communications in January 1997 as President of Deschutes following Citadel
Communications' acquisition of Deschutes. Mr. Hardy became President of West
Region for Citadel Broadcasting and Vice President of Citadel Broadcasting and
Citadel Communications in June 1997 when Deschutes was merged with and into
Citadel Broadcasting. From 1984 to 1993, Mr. Hardy was Vice President--General
Manager of KUPL AM/FM in Portland.

Patricia Diaz Dennis became a director of Citadel Broadcasting and Citadel
Communications in November 1997. Since November 1998, Ms. Dennis serves as
Senior Vice President--Regulatory and Public Affairs of SBC Communications Inc.,
a company which provides telecommunications products and services, and from
September 1995, she served as Senior Vice President and Assistant General
Counsel for regulation and public policy of SBC Communications Inc. From March
1993 until joining SBC Communications Inc., Ms. Dennis served as special counsel
for communications matters for the law firm of Sullivan & Cromwell. Ms. Dennis
served as a commissioner of the FCC from June 1986 to September 1989 and as
Assistant Secretary of State for Human Rights and Humanitarian Affairs in the
United States Department of State from August 1992 to January 1993. Ms. Dennis
also serves as director for various entities, including Massachusetts Mutual
Life Insurance Company and National Public Radio.

Scott E. Smith has served as a member of the Board of Directors of Citadel
Broadcasting since 1992 and of Citadel Communications since 1993. He is an
Executive Vice President of Baker, Fentress & Company. Since 1989, Mr. Smith has
managed the private placement portfolio of Baker Fentress.

Ted L. Snider, Sr. became a director of Citadel Broadcasting and Citadel
Communications in November 1997 following Citadel Broadcasting's October 1997
acquisition of Snider

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<PAGE> 85

Corporation. Mr. Snider had been Chairman of Snider Corporation since its
incorporation in 1971. Snider Corporation owned two FM and two AM radio
stations, the right to construct an additional FM radio station and the Arkansas
Radio Network.

John E. von Schlegell has served as a member of the Board of Directors of
Citadel Broadcasting and Citadel Communications since January 1997. He
co-founded and, since 1991, has managed, Endeavour Capital Fund Limited
Partnership, a firm that invests equity capital in privately held businesses
throughout the northwest. Prior to 1991, Mr. von Schlegell was a general partner
at Golder, Thoma & Cressey, a private equity firm based in Chicago.

BOARD COMPOSITION

The five persons presently constituting the Board of Directors of Citadel
Broadcasting were elected under the terms of a Fourth Amended and Restated
Voting Agreement dated as of October 15, 1997, by and among Citadel
Communications, the voting trustee under the Amended and Restated Voting Trust
Agreement dated October 15, 1997 and certain other stockholders of Citadel
Communications. In connection with Citadel Communications' initial public
offering, the Fourth Amended and Restated Voting Agreement and a related
Stockholders Agreement among Citadel Communications and certain of its
stockholders were terminated. The Amended and Restated Voting Trust Agreement
will continue in effect until terminated in accordance with its terms.

Each director of Citadel Broadcasting holds office until the next annual
meeting of stockholders and until his or her successor has been elected and
qualified. Officers are elected by the Board of Directors and serve at its
discretion.

In the event that, after July 1, 2002, two or more semi-annual dividends
payable on Citadel Broadcasting's exchangeable preferred stock are in arrears
and unpaid, or upon the occurrence of certain other events, including failure to
comply with certain covenants and failure to pay the mandatory redemption price
when due, then the holders of a majority of the then outstanding shares of the
exchangeable preferred stock, voting separately as a class, will be entitled to
elect two additional directors of Citadel Broadcasting, who shall serve until
such time as all dividends in arrears or any other failure, breach or default
giving rise to such voting rights is remedied or waived.

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<PAGE> 86

EXECUTIVE COMPENSATION

The following table sets forth information with respect to the compensation
paid to Citadel Broadcasting's Chief Executive Officer and each of the other
four most highly compensated executive officers of Citadel Broadcasting during
1998. Information with respect to 1996 compensation is not given for Mr.
Proffitt as he did not begin service as an executive officer of Citadel
Broadcasting until 1997. Information with respect to 1996 and 1997 compensation
is not given for Mr. Benedetti as he did not begin service as an executive
officer of Citadel Broadcasting until 1998.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- ------------
SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION
- ------------------ ---- -------- -------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Lawrence R. Wilson........ 1998 $358,319 $214,370(2) -0 - 60,000 $3,046(3)
Chairman and Chief 1997 341,256 120,000(4) -0 - -0 - 3,278(3)
Executive Officer 1996 325,000 81,250(5) $412,041(6) 450,000 2,786(3)
Donna L. Heffner.......... 1998 $175,000 $ 80,000(2) -0 - 12,000 $4,537(7)
Vice President and 1997 140,535 50,000(4) -0 - -0 - 3,086(7)
Chief Financial Officer 1996 120,000 20,000(5) -0 - 66,000 2,505(7)
D. Robert Proffitt........ 1998 $200,000 $ 40,000(2) -0 - 12,000 $3,161(8)
President and 1997 192,211 15,000(4) -0 - -0 - 2,541(8)
Chief Operating Officer
Stuart R. Stanek.......... 1998 $210,000 $ 50,000(2) -0 - 12,000 $2,635(9)
Vice President and 1997 190,007 30,000(4) -0 - -0 - 2,529(9)
President of the East 1996 165,000 35,000(5) -0 - 72,000 2,553(9)
Region
Peter J. Benedetti........ 1998 $150,000 $ 65,000(2) -0 - 21,005 $2,093(10)
Vice President and
President of the Central
Region
</TABLE>

- ---------------

(1) In accordance with applicable regulations, the amounts set forth in this
column do not include perquisites and other personal benefits received by
each of the executives unless the aggregate value of such perquisites and
other benefits exceeded the lesser of $50,000 or 10% of the total salary
and bonus reported for the executive.

(2) Bonuses were earned in 1998 and paid in 1998 or will be paid in 1999. Does
not reflect bonuses earned in 1997 but paid in 1998.

(3) Represents Citadel Broadcasting's contribution of $2,986, $3,200 and $2,708
in 1998, 1997 and 1996, respectively, to Citadel Broadcasting's 401(k)
Plan, which contributions vest over five years, and Citadel Broadcasting's
payment of $60 in 1998 and $78 in each of 1997 and 1996 of premiums for
term life insurance.

(4) Bonuses were earned in 1997 and paid in 1997 and 1998. Does not reflect
bonuses earned in 1996 but paid in 1997.

(5) Bonuses were earned in 1996, but paid in 1997. Does not reflect bonuses
earned in 1995 but paid in 1996.

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<PAGE> 87

(6) Represents $3,404 for personal use of company-provided vehicle and for
goods and services received through Citadel Broadcasting's trade
agreements, and the forgiveness of $408,637 of indebtedness in 1996. See
"Certain Transactions."

(7) Represents Citadel Broadcasting's contribution of $4,477, $3,008 and $2,427
in 1998, 1997 and 1996, respectively, to Citadel Broadcasting's 401(k)
Plan, which contributions vest over five years, and Citadel Broadcasting's
payment of $60 in 1998 and $78 in each of 1997 and 1996 of premiums for
term life insurance.

(8) Represents Citadel Broadcasting's contribution of $3,101 and $2,463 in 1998
and 1997, respectively, to Citadel Broadcasting's 401(k) Plan, which
contribution vests over five years, and Citadel Broadcasting's payment of
$60 in 1998 and $78 in 1997 of premiums for term life insurance.

(9) Represents Citadel Broadcasting's contribution of $2,575, $2,451 and $2,475
in 1998, 1997 and 1996, respectively, to Citadel Broadcasting's 401(k)
Plan, which contributions vest over five years, and Citadel Broadcasting's
payment of $60 in 1998 and $78 in each of 1997 and 1996 of premiums for
term life insurance.

(10) Represents Citadel Broadcasting's contribution of $2,033 to Citadel
Broadcasting's 401(k) Plan, which contribution vests over five years, and
Citadel Broadcasting's payment of $60 of premiums for term life insurance.

Stock Options.

The following table summarizes individual grants of options to purchase
shares of common stock of Citadel Communications to the executive officers
listed in the Summary Compensation Table during the year ended December 31,
1998:

OPTIONS GRANTED IN FISCAL 1998

<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
PERCENT ANNUAL RATES
NUMBER OF OF TOTAL EXERCISE MARKET OF STOCK PRICE
SECURITIES OPTIONS OR PRICE APPRECIATION FOR
UNDERLYING GRANTED TO BASE ON DATE OPTION TERM(2)
OPTIONS EMPLOYEES PRICE OF GRANT EXPIRATION ----------------------------------
NAME GRANTED IN 1998 ($/SH) ($/SH)(1) DATE 0%($) 5%($) 10%($)
---- ---------- ---------- -------- --------- ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lawrence R. Wilson(3) 60,000 29.4% $16.00 $25.813 9/09/08 $588,780 $1,562,820 $3,057,120
Donna L. Heffner(3) 12,000 5.9 16.00 25.813 9/09/08 117,756 312,564 611,424
D. Robert Proffitt(3) 12,000 5.9 16.00 25.813 9/09/08 117,756 312,564 611,424
Stuart R. Stanek(3) 12,000 5.9 16.00 25.813 9/09/08 117,756 312,564 611,424
Peter J. Benedetti(3) 16,005 7.8 16.00 16.000 6/30/08 -0- 161,042 408,128
5,000 2.5 16.00 25.813 9/09/08 49,065 130,235 254,760
</TABLE>

- ---------------

(1) For options granted on September 9, 1998, the indicated market price on the
date of the grant was the closing market price of the common stock. For the
option granted on June 30, 1998, the indicated market price on the date of
the grant was the initial public offering price in Citadel Communications'
initial public offering.

(2) The potential realizable value is based on the term of the option at the
time of grant, which is ten years for each of the options set forth in the
table. An assumed stock price appreciation of 0%, 5% and 10% is used
pursuant to rules promulgated by the SEC. The potential realizable value is
calculated by assuming that the market price on the date of grant
appreciates at the indicated rate, compounded annually, for the entire term
of the option and that the option is exercised and sold on the last day of
its term at this

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<PAGE> 88

appreciated stock price. The potential realizable value is not intended to
forecast the future appreciation of the common stock.

(3) Options vest 20% on each of the first through fifth anniversaries of the
date of grant. Vesting accelerates in the event of a change in control of
Citadel Communications, as provided for in the relevant option agreements.

The following table shows the number and value of unexercised stock options
to purchase shares of common stock of Citadel Communications (rounded to the
nearest whole share) held by the executive officers listed in the Summary
Compensation Table as of December 31, 1998. No options were exercised by these
executive officers in 1998:

FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS(1)
------------------------- -------------------------
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------------- -------------------------
<S> <C> <C>
Lawrence R. Wilson(2)........ 479,636/322,312 $ 10,982,914/5,878,524
Donna L. Heffner............. 139,243/79,811 3,283,559/1,604,401
D. Robert Proffitt........... 106,420/77,606 2,469,932/1,532,262
Stuart R. Stanek............. 140,827/83,207 3,315,737/1,678,070
Peter J. Benedetti........... 1,800/28,205 28,575/321,724
</TABLE>

- ---------------

(1) These values have been calculated on the basis of the December 31, 1998
closing price per share of $25.875, less the applicable exercise price.

(2) Includes options held by Rio Bravo Enterprise Associates, L.P. Mr. Wilson
owns all of the capital stock of Rio Bravo, Inc., the sole general partner
of Rio Bravo Enterprise Associates, L.P.

EMPLOYMENT AGREEMENT

In June 1996, Citadel Broadcasting entered into an employment agreement
with Lawrence R. Wilson which has an initial term ending in June 2001. Mr.
Wilson's current annual base salary under the agreement is $376,234 which is to
be increased by 5% in January of each year during the term of the agreement. The
agreement also provides for an annual bonus calculated as a percentage of Mr.
Wilson's base salary in effect at the end of the year and based on annual
performance criteria of Citadel Broadcasting.

Mr. Wilson's employment with Citadel Broadcasting will terminate upon Mr.
Wilson's becoming permanently disabled or upon:

-- a liquidation or dissolution of Citadel Communications

-- a sale, transfer or other disposition of all of the assets of
Citadel Broadcasting on a consolidated basis or

-- any transaction or series of transactions whereby any person or
entity other than ABRY Broadcast Partners II, L.P. or its
affiliates or affiliates of Citadel Broadcasting, becomes the
direct or indirect beneficial owner of securities of Citadel
Broadcasting or Citadel Communications representing 50% or more of
the combined voting power of Citadel Broadcasting's or Citadel
Communications' then outstanding securities

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<PAGE> 89

In such event, Mr. Wilson or his beneficiary will be entitled to receive Mr.
Wilson's then base salary through the end of the month in which the termination
occurs. In addition, upon the affirmative vote or written consent of not less
than 66 2/3% of the members of the Citadel Communications Board of Directors,
Mr. Wilson's employment may be terminated with or without cause. If any such
termination is without cause, Mr. Wilson will be entitled to receive his then
current base salary through the end of the then current term of the employment
agreement.

1996 EQUITY INCENTIVE PLAN

Citadel Communications has adopted the 1996 Equity Incentive Plan under
which all employees of Citadel Broadcasting are eligible to receive awards in
the form of non-qualified options and incentive options to purchase common stock
of Citadel Communications, stock appreciation rights, restricted securities and
other stock-based awards as determined by the Board of Directors. The Equity
Incentive Plan is administered by the Board of Directors of Citadel
Communications, which determines the price and type of awards granted and the
key managerial employees eligible to receive awards and the terms thereof,
including vesting, all in a manner consistent with the plan. The Citadel
Communications Board may delegate responsibility for administration of the plan
to a committee of the Citadel Communications Board. At December 31, 1998, total
number of shares of common stock of Citadel Communications that remained
reserved and available for issuance under the Equity Incentive Plan (or which
may be used to provide a basis of measurement for an award) was 1,568,215
shares. Shares subject to any option which terminates or expires unexercised
will be available for subsequent grants. The exercise price of incentive stock
options granted under the plan is to be at least 100% of the fair market value
of the common stock on the date of grant (110% of the fair market value of the
common stock in the case of an incentive stock option to an individual who at
the time of the grant owns more than 10% of the combined voting power of Citadel
Communications' capital stock). The Citadel Communications Board may provide
that an optionee may pay for shares upon exercise of an option in cash or by
check or by such other medium or by any combination of media as authorized by
the Citadel Communications Board. The grant of an option may be accompanied by a
reload option, which gives an optionee who pays the exercise price of an option
with shares of common stock an additional option to acquire the same number of
shares that was used to pay for the original option at an exercise price of not
less than the fair market value of common stock as of the reload option grant
date. An unexercised option may expire upon termination of employment, or the
Citadel Communications Board may permit the holder of the option to exercise it
during the 90 days following termination. Under certain circumstances, including
termination of employment upon retirement, disability or death, the option may
be exercised during an extended period. In the event of termination of
employment under certain circumstances following certain change in control
events, an option generally may be exercised in full during the 90 days
following termination. The Equity Incentive Plan also provides for the grant of
performance units and shares of restricted stock, none of which have been
granted.

401(k) PLAN

Effective in 1993, Citadel Broadcasting adopted a 401(k) Savings Plan for
the purpose of providing, at the option of the employee, retirement benefits to
full-time employees of Citadel Broadcasting and its subsidiaries who have been
employed for a period of one year or longer. Contributions to the 401(k) plan
are made by the employee and, on a voluntary

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<PAGE> 90

basis, by Citadel Broadcasting. Citadel Broadcasting currently matches 100% of
that part of the employee's deferred compensation which does not exceed 2% of
such employee's salary.

A contribution to the 401(k) plan of $0.4 million was made by Citadel
Broadcasting during the year ended December 31, 1998.

DIRECTOR COMPENSATION

Ms. Dennis receives an annual fee of $20,000 for her services as a director
of Citadel Broadcasting and Citadel Communications and the other non-employee
directors of Citadel Broadcasting and Citadel Communications receive an annual
fee of $12,000 for their services as directors of Citadel Broadcasting and
Citadel Communications. Directors who are also employees of Citadel Broadcasting
will not receive additional consideration for serving as directors, except that
all directors will be reimbursed for travel and out-of-pocket expenses in
connection with their attendance at Board and committee meetings.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1998, Scott E. Smith, John E. von Schlegell and Patricia Diaz Dennis
were members of the Compensation Committee of the Citadel Communications Board
of Directors, which determines compensation matters for Citadel Broadcasting.
Such persons are also directors of Citadel Broadcasting.

Repayment of Indebtedness. In October 1996, Citadel Broadcasting repaid its
indebtedness to Baker, Fentress & Company, which consisted of $7.0 million in
principal amount and $20,534 in accrued and unpaid interest. Citadel
Broadcasting also paid Baker Fentress a $420,000 prepayment penalty. Baker
Fentress beneficially owns more than five percent of the outstanding common
stock of Citadel Communications. Scott E. Smith, a director of Citadel
Broadcasting, is an Executive Vice President of Baker Fentress. See "Principal
Stockholders."

Registration Rights Agreement. Citadel Communications is a party to a
Registration Rights Agreement, dated June 28, 1996, as amended, with Lawrence R.
Wilson, Rio Bravo Enterprise Associates, L.P., ABRY Broadcast Partners II, L.P.,
ABRY Citadel Investment Partners, L.P., Baker Fentress, Oppenheimer & Co., Inc.
(now CIBC Oppenheimer Corp.), Edward T. Hardy, Endeavour Capital Fund Limited
Partnership, Ted L. Snider, Sr. and others, which requires Citadel
Communications to register their shares of its common stock under the Securities
Act for offer and sale to the public (including by way of an underwritten public
offering), upon a one-time demand by such stockholders, and which entitles such
parties to join in any registration of equity securities of Citadel
Communications. Royce Yudkoff, a former director of Citadel Broadcasting and
Citadel Communications, is President of ABRY Holdings, Inc., the general partner
of ABRY Capital, L.P., the general partner of ABRY Broadcast Partners II, L.P.,
a significant stockholder of Citadel Communications, and ABRY Citadel Investment
Partners, L.P., formerly a significant stockholder of Citadel Communications.
See "Principal Stockholders." Mr. Wilson owns all of the capital stock of Rio
Bravo, Inc., the sole general partner of Rio Bravo Enterprise Associates, L.P.

Securities Purchase and Exchange Agreement. Pursuant to a Securities
Purchase and Exchange Agreement, dated June 28, 1996, as amended, among Citadel
Broadcasting, Citadel Communications, ABRY Broadcast Partners II, L.P., ABRY
Citadel Investment Partners, L.P., Baker Fentress, Oppenheimer, Endeavour
Capital Fund, Edward T. Hardy, Bank of America National Trust and Savings
Association, Ted L. Snider, Sr. and other parties, Citadel

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<PAGE> 91

Communications redeemed outstanding preferred stock held by Bank of America and
certain other parties, repaid the $2.0 million principal balance and the $17,500
in accrued interest on Citadel Communications' Junior Subordinated Convertible
Note Due 1996 dated May 24, 1996 issued to ABRY Broadcast Partners II, L.P.,
financed four radio station acquisitions, and paid certain working capital
requirements. The transactions were financed by Citadel Communications' issuance
of shares of preferred stock to ABRY Broadcast Partners II, L.P. and to ABRY
Citadel Investment Partners, L.P. for a total consideration of approximately
$49.5 million, and through borrowings under a $20.0 million revolving line of
credit with ABRY Broadcast Partners II, L.P. and ABRY Citadel Investment
Partners, L.P. Simultaneously, four then existing series of capital stock of
Citadel Communications held by Baker Fentress, Oppenheimer, Bank of America and
certain other parties were reclassified.

Deschutes Transactions. In connection with the acquisition of Deschutes
River Broadcasting, Inc., (1) Edward T. Hardy, an officer, director and
shareholder of Deschutes prior to its acquisition by Citadel Communications and
currently an executive officer of Citadel Broadcasting, and (2) Endeavour
Capital Fund, a shareholder of Deschutes prior to its acquisition by Citadel
Communications and currently a stockholder of Citadel Communications, each
received merger consideration consisting of shares of capital stock of Citadel
Communications valued at approximately $206,500 and approximately $7.2 million,
respectively. John E. von Schlegell, a director of Citadel Broadcasting and
Citadel Communications, is President and a shareholder of the general partner of
Endeavour Capital Fund. Mr. Hardy also received immediately exercisable options
to purchase 68,754 shares of common stock of Citadel Communications at an
exercise price of $1.64 per share and 24,135 shares of common stock at an
exercise price of $5.72 per share in exchange for options to acquire shares of
Deschutes capital stock. Following the acquisition, he was granted options to
purchase an aggregate of 111,000 shares of common stock at an exercise price of
$5.72 per share, which options vest 20% per year beginning with the first
anniversary of the date of the grant. In contemplation of the proposed
acquisition of Deschutes, during 1996, Citadel Broadcasting made advances to
Deschutes to enable Deschutes to acquire various radio stations and pay-off
existing debt. At December 31, 1996, an aggregate of approximately $18.3 million
was due under these advances, which was credited against the cash portion of the
purchase price for Deschutes.

In connection with the acquisition of Deschutes, Citadel Communications
entered into an Agreement Not to Compete with DVS Management, Inc., the general
partner of Endeavour Capital Fund, a shareholder of Deschutes prior to its
acquisition by Citadel Communications, pursuant to which DVS agreed not to
compete in radio broadcasting in any geographic area or market served or
competed in by one or more of Citadel Broadcasting's stations. In consideration
for such agreement not to compete with Citadel Broadcasting's stations, Citadel
Broadcasting paid DVS $100,000 in each of 1997 and 1998. John E. von Schlegell,
a director of Citadel Broadcasting, is President and a shareholder of DVS. This
agreement has now expired.

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CERTAIN TRANSACTIONS

LOAN TRANSACTIONS

Lawrence R. Wilson, an executive officer and director of Citadel
Broadcasting, was indebted to Citadel Broadcasting in the amount of $394,297
(including accrued interest of $46,440) as of December 31, 1995. Approximately
$70,000 of the principal amount of the loan was advanced by Citadel
Broadcasting's predecessor to Mr. Wilson in June 1992 for personal purposes,
approximately $27,860 of the loan was advanced by Citadel Broadcasting's
predecessor to Mr. Wilson in April 1993 to finance Mr. Wilson's purchase of
capital stock of Citadel Broadcasting from a former stockholder and
approximately $250,000 was advanced by Citadel Broadcasting to Mr. Wilson in
1994 for personal purposes. The loan, which bore interest at the rate of 8.5%
per annum, was forgiven in June 1996, at which time an aggregate of $408,637
principal and accrued interest was outstanding. Mr. Wilson's indebtedness under
the loan was secured by shares of capital stock of Citadel Communications owned
by Mr. Wilson.

In 1995, Mr. Wilson made a short-term unsecured loan of $365,000 to Citadel
Broadcasting at an annual interest rate of 10%. Citadel Broadcasting repaid such
loan in full in 1996.

SALE AND LEASEBACK OF AIRPLANE

In December 1995, Citadel Broadcasting sold to Wilson Aviation, L.L.C., a
company then owned by Mr. Wilson and his spouse and currently owned by Rio Bravo
Enterprise Associates, L.P., an airplane formerly owned by Citadel Broadcasting,
for a cash purchase price of approximately $1.3 million. Contemporaneously with
the sale of the airplane, Citadel Broadcasting entered into an agreement to
lease the airplane from Wilson Aviation, L.L.C. from December 29, 1995 to
December 31, 2001. The parties subsequently amended the lease to extend through
December 31, 2003. Under the terms of the lease, as amended, Citadel
Broadcasting paid monthly rent in the amount of $17,250 through December 31,
1998 and is required to pay monthly rent in the amount of $21,000 thereafter. In
addition, Citadel Broadcasting bears all of the costs of the maintenance, repair
and operation of the airplane during the term of the lease. The sale and
leaseback were not independently established in an arm's length transaction;
however, the original transaction was reviewed and approved by Citadel
Broadcasting's senior lender and Citadel Broadcasting believes, based upon such
review, that the terms of the transaction are reasonable and at least as
favorable to Citadel Broadcasting as could be obtained generally from
unaffiliated parties. Citadel Broadcasting's Board of Directors approved the
amendment to this lease. Mr. Wilson owns all of the capital stock of Rio Bravo,
Inc., the sole general partner of Rio Bravo Enterprise Associates, L.P.

REAL ESTATE PURCHASE IN CONNECTION WITH ACQUISITION

In order to facilitate Citadel Broadcasting's acquisition of KKLI-FM from
Tippie Communications, Inc. in 1996, Mr. Wilson purchased from a shareholder of
Tippie associated real estate located in Colorado Springs, Colorado, which
Citadel Broadcasting did not desire to acquire. The purchase price for the real
estate was $350,000. The purchase price and terms of the transaction were
negotiated between Mr. Wilson and the seller of the real estate, and neither
Citadel Broadcasting nor Mr. Wilson obtained an independent appraisal of such
real estate. In acquiring the real estate involved, Mr. Wilson did not obtain
funds directly or indirectly from Citadel Broadcasting to purchase such
property. Citadel Broadcasting believes

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that its acquisition of KKLI-FM, in the context of the acquisition of the real
estate by Mr. Wilson, was fair to Citadel Broadcasting.

CORPORATE EVENT COSTS

During 1998, Citadel Broadcasting paid an aggregate of $75,964 in respect
of accommodation and activity costs in connection with three corporate events
held at a facility owned indirectly by Rio Bravo Enterprise Associates, L.P.
Citadel Broadcasting's Board of Directors approved the charges. Citadel
Broadcasting believes that these charges are reasonable and reflect terms at
least as favorable to it as could be obtained generally from unaffiliated
providers of similar services.

LITTLE ROCK AND PROVIDENCE ACQUISITIONS

Ted L. Snider, Sr., who became a director of Citadel Broadcasting in
November 1997, and his spouse were the shareholders of Snider Corporation and,
in connection with Citadel Broadcasting's acquisition of Snider Corporation and
other assets from Mr. Snider and his spouse in October 1997, Mr. Snider and his
spouse received approximately $7.4 million in cash and approximately $4.5
million in shares of a newly created series of preferred stock of Citadel
Communications which have been converted into shares of common stock. Mr.
Snider's son, Ted Snider, Jr., and nephew, Calvin Arnold, were principal
shareholders of Snider Broadcasting Corporation and of CDB Broadcasting
Corporation and, in connection with Citadel Broadcasting's acquisition of Snider
Broadcasting and assets from CDB Broadcasting in October 1997, they received
approximately $5.5 million in shares of a newly created series of preferred
stock of Citadel Communications which have been converted into shares of common
stock. In addition, Citadel Broadcasting repaid approximately $2.6 million of
indebtedness of Snider Broadcasting and CDB Broadcasting received approximately
$4.9 million in cash. Mr. Arnold was employed by Citadel Broadcasting in 1997
and 1998 as General Manager of Citadel Broadcasting's radio stations in the
Little Rock area.

Prior to its acquisition by Citadel Broadcasting, Snider Corporation
transferred to Mr. Snider and his spouse its rights to operate under a local
marketing agreement an FM radio station under construction. Accordingly, the
cash portion of the purchase price for Snider Corporation was reduced by
$100,000. Because a designated third party did not take an assignment and assume
the Sniders' rights under the local marketing agreement, Citadel Broadcasting
accepted an assignment of the local marketing agreement and paid the Sniders
$100,000. Citadel Broadcasting subsequently assigned its right to operate this
station to an unrelated party.

Effective June 2, 1997, Citadel Broadcasting began operating the radio
stations formerly owned by Snider Corporation, Snider Broadcasting and CDB
Broadcasting under local marketing agreements under which an aggregate of
approximately $823,000 was paid by Citadel Broadcasting to such entities.
Citadel Broadcasting believes that the terms of the foregoing transactions were
at least as favorable to Citadel Broadcasting as could have been obtained
generally from unaffiliated parties. In May 1998, Citadel Broadcasting entered
into an agreement pursuant to which an entity controlled by Ted Snider, Jr. will
provide to Citadel Broadcasting telephone access services and other related
services. The term of the agreement is five years and, unless terminated, the
agreement will automatically renew for additional five-year terms. Citadel
Broadcasting believes that the terms of this agreement reflect arm's-length
negotiations and are at least as favorable to Citadel Broadcasting as could be
obtained generally from unaffiliated providers of similar services.

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In connection with Citadel Broadcasting's September 1997 acquisition of
WXEX-FM and related assets in Providence, Rhode Island, each of Philip Urso and
Phillip Norton acquired ownership of more than five percent of the then
outstanding shares of a newly created series of preferred stock of Citadel
Communications, shares of which series have been converted into shares of common
stock. Mr. Urso and Mr. Norton are employed by Citadel Broadcasting. Mr. Urso
and members of his family were shareholders of Bear Broadcasting Company, which
sold WHKK-FM to Citadel Broadcasting in November 1997 for approximately $4.0
million in cash. From September 15, 1997 until the acquisition of WHKK-FM,
Citadel Broadcasting operated WHKK-FM under a local marketing agreement pursuant
to which Citadel Broadcasting reimbursed Bear Broadcasting an aggregate of
approximately $17,000 for costs and expenses of station operation. Citadel
Broadcasting believes that the terms of the foregoing transactions were at least
as favorable to it as could have been obtained generally from unaffiliated
parties.

CONSULTING ARRANGEMENT

During the fiscal year ended December 31, 1996, Michael J. Ahearn, a
director of Citadel Broadcasting from 1996 to November 1997, provided financial
consulting services to Citadel Broadcasting for which he was paid $83,520. On
June 28, 1996, Mr. Ahearn was also granted an option to purchase 12,000 shares
of common stock of Citadel Communications at an exercise price of $5.72 per
share. Such option is fully vested. Citadel Broadcasting believes that such
services were provided to Citadel Broadcasting on terms at least as favorable to
it as could have been obtained generally from unaffiliated parties.

LEGAL SERVICES

During the fiscal year ended December 31, 1996, Citadel Broadcasting
retained the law firm of Gallagher & Kennedy, P.A. to represent Citadel
Broadcasting on various matters. Michael J. Ahearn was a shareholder of such
firm and a director of Citadel Broadcasting in 1996.

INVESTMENT BANKING RELATIONSHIPS

Mark A. Leavitt, a director of Citadel Broadcasting from 1992 to November
1997, is a Managing Director of Prudential Securities Incorporated. Prudential
Securities has provided investment banking services to Citadel Broadcasting
since 1996 and may provide such services in the future. Such services have been
provided on terms customary in the industry. Prudential Securities acted as an
initial purchaser in the offering of the outstanding 9-1/4% notes and in the
offerings of the 10-1/4% notes and the exchangeable preferred stock and as an
underwriter of Citadel Communications' initial public offering. In 1996,
Oppenheimer provided investment banking services to Citadel Broadcasting. Mr.
Leavitt was a Managing Director of Oppenheimer during 1996. Oppenheimer provided
services to Citadel Broadcasting on terms customary in the industry. Oppenheimer
was also a party to a now terminated voting agreement and stockholders agreement
and is a party to the Registration Rights and the Securities Purchase and
Exchange Agreements dated June 28, 1996 among Citadel Communications and certain
of its stockholders. Each of the registration rights agreement and the
securities purchase and exchange agreement have been amended several times.

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SECURITIES PURCHASE AND EXCHANGE AGREEMENT

The Securities Purchase and Exchange Agreement identified in the preceding
paragraph established a commitment by ABRY Broadcast Partners II, L.P. and ABRY
Citadel Investment Partners, L.P. in favor of Citadel Communications for a
revolving line of credit in the aggregate principal amount of $20.0 million and
against which ABRY Broadcast Partners II, L.P. and ABRY Citadel Investment
Partners, L.P. made pro rata advances. At June 30, 1997, there were four such
advances outstanding, the aggregate principal balance of which was approximately
$12.8 million. Citadel Broadcasting used a portion of the proceeds from the
offerings of the 10-1/4% notes and the exchangeable preferred stock to repay
advances made to Citadel Broadcasting by Citadel Communications with the
proceeds of the advances from ABRY Broadcast Partners II, L.P. and ABRY Citadel
Investment Partners, L.P. Citadel Communications repaid the advances from ABRY
Broadcast Partners II, L.P. and ABRY Citadel Investment Partners, L.P.
concurrently with the offerings of the 10-1/4% notes and the exchangeable
preferred stock. Thereafter, the commitment terminated and ABRY Broadcast
Partners II, L.P. and ABRY Citadel Investment Partners, L.P. have no further
obligation to make the advances.

VOTING TRUST AGREEMENT

In 1997, Citadel Communications paid ABRY Broadcast Partners II, L.P., for
the account of ABRY Broadcast Partners II, L.P. and ABRY Citadel Investment
Partners, L.P., $75,000 to defray the fees and expenses associated with the
voting trust created by the Amended and Restated Voting Trust Agreement dated
October 15, 1997, including any fees payable to the voting trustee and the
back-up trustees under the Amended and Restated Voting Trust Agreement. Each of
Christopher P. Hall, J. Walter Corcoran and Harlan A. Levy, directors of Citadel
Broadcasting and Citadel Communications for a portion of 1997, served as either
the voting trustee or a back-up trustee in 1997. Mr. Levy currently serves as
the voting trustee. For additional information concerning the Amended and
Restated Voting Trust Agreement, see "Management--Board Composition" and
"Principal Stockholders."

MANAGEMENT AND CONSULTING SERVICES AGREEMENT

In June 1996, Citadel Broadcasting entered into a Management Services and
Consulting Agreement with ABRY Partners, Inc. which was terminated in March
1997. Pursuant to the agreement, ABRY Partners, Inc. provided consultation to
Citadel Broadcasting's Board of Directors and management on business and
financial matters. Citadel Broadcasting paid $37,500 and $62,500 to ABRY
Partners, Inc. under this agreement in 1996 and 1997, respectively, and
reimbursed ABRY Partners, Inc. for reasonable out-of-pocket costs and expenses.
ABRY Partners, Inc. is an affiliate of ABRY Broadcast Partners II, L.P. and ABRY
Citadel Investment Partners, L.P.

PREPAYMENT AND REDEMPTION OF SECURITIES

On June 28, 1996, Citadel Broadcasting prepaid senior subordinated notes in
the principal amount of $4.0 million, and funded Citadel Communications'
redemption of a portion of the stock purchase warrants, issued under a Senior
Subordinated Note and Warrant Purchase Agreement dated as of October 1, 1993.
These senior subordinated notes and warrants were held, in part, by Bank of
America National Trust and Savings Association. As of June 28, 1996, after
giving effect to the redemption, Bank of America held a warrant to purchase
138,101 shares of nonvoting common stock of Citadel Communications which was

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<PAGE> 96

convertible into voting common stock upon the occurrence of events, and such
conversion would have resulted in Bank of America owning in excess of five
percent of the then outstanding shares of voting common stock. The warrant was
subsequently converted into a warrant to purchase 414,303 shares of Citadel
Communications' currently existing common stock. Immediately thereafter, the
warrant was transferred to, and exercised for a nominal exercise price by,
BankAmerica Investment Corporation, and the 414,303 shares of common stock were
sold in Citadel Communications' initial public offering. Bank of America had
been a party to the Registration Rights Agreement dated June 28, 1996 among
Citadel Communications and certain of its stockholders and a now terminated
stockholders agreement.

STOCK REPURCHASE

In June 1996, Citadel Communications repurchased shares of capital stock of
Citadel Communications then held by Mesirow Capital Partners VI for an aggregate
of approximately $10.7 million. Mesirow VI had acquired such shares in 1993.
William P. Sutter, Jr., a former director of Citadel Broadcasting, was an
officer of the general partner of Mesirow VI. Mesirow VI had been a party to now
terminated voting and stockholders agreements among Citadel Communications and
certain of its stockholders.

See also "Management--Compensation Committee Interlocks and Insider
Participation" for a description of various other transactions involving the
directors and executive officers of Citadel Broadcasting and significant
stockholders of Citadel Communications.

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PRINCIPAL STOCKHOLDERS

Citadel Communications owns all of the currently issued and outstanding
common stock of Citadel Broadcasting and has pledged such common stock to secure
its guaranty of indebtedness under the credit facility. See "Description of
Indebtedness--Existing Loan Agreement." The only other outstanding capital stock
of Citadel Broadcasting is its exchangeable preferred stock.

The only outstanding capital stock of Citadel Communications is its common
stock. The following table sets forth information with respect to the beneficial
ownership of Citadel Communications' common stock as of January 29, 1999 by (1)
each person, entity or group known to Citadel Broadcasting to beneficially own
more than five percent of the common stock, (2) each director of Citadel
Broadcasting, (3) each executive officer listed in the Summary Compensation
Table in the "Management" section under the heading "Executive Compensation" and
(4) all directors and executive officers of Citadel Broadcasting as a group.

Except as indicated below, the persons named have sole voting and
investment power with respect to the shares shown as beneficially owned by them.
The percentages are rounded to the nearest tenth of a percent. Holders of the
common stock are entitled to one vote per share on all matters submitted to a
vote of stockholders generally.

The number of shares and percentages in the table are calculated in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934 on a
stockholder by stockholder basis, assuming that each stockholder converted all
securities owned by such stockholder that are convertible into common stock at
the option of the holder within 60 days of January 29, 1999, and that no other
stockholder so converts. The numbers and percentages of shares owned assume that
outstanding options have been exercised by such respective stockholders as
follows:

-- Lawrence R. Wilson--479,636 shares, including options held by Rio
Bravo Enterprise Associates, L.P.,

-- D. Robert Proffitt--115,300 shares,

-- Donna L. Heffner--149,527 shares,

-- Stuart R. Stanek--152,107 shares,

-- Peter J. Benedetti--1,800 shares,

-- Patricia Diaz Dennis--7,500 shares,

-- Rio Bravo Enterprise Associates, L.P.--441,194 shares, and

-- all directors and executive officers as a group--1,043,159 shares.

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<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP OF
COMMON STOCK
---------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT
- ------------------------ ---------- -------
<S> <C> <C>
Lawrence R. Wilson(1)....................................... 2,748,401 10.5%
City Center West
Suite 400
1201 West Lake Mead Boulevard
Las Vegas, NV 89128
Donna L. Heffner(2)......................................... 187,643 *
D. Robert Proffitt(3)....................................... 187,185 *
Stuart R. Stanek(4)......................................... 219,180 *
Peter J. Benedetti.......................................... 7,427 *
Patricia Diaz Dennis........................................ 7,500 *
Scott E. Smith(5)........................................... 2,166,736 8.4
John E. von Schlegell(6).................................... 1,095,836 4.3
Ted L. Snider, Sr.(7)....................................... 342,504 1.3
Rio Bravo Enterprise Associates, L.P.(1).................... 2,709,869 10.4
City Center West
Suite 400
1201 West Lake Mead Boulevard
Las Vegas, NV 89128
Baker, Fentress & Company................................... 2,166,736 8.4
200 West Madison
Suite 3510
Chicago, IL 60602
ABRY Broadcast Partners II, L.P.(8)......................... 8,460,839 32.9
18 Newbury Street
Boston, MA 02116
Harlan A. Levy(9)........................................... 8,460,839 32.9
1585 Broadway
19th Floor
New York, NY 10036
ABRY Capital, L.P.(10)...................................... 8,468,436 32.9
18 Newbury Street
Boston, MA 02116
Putnam Investments, Inc.(11)................................ 2,079,763 8.1
One Post Office Square
Boston, MA 02109
All directors and executive officers as a group (10
persons)(13).............................................. 7,136,879 26.7
</TABLE>

- ---------------

* Less than 1%

(1) Includes 2,268,675 shares of outstanding common stock and 441,194 shares of
common stock which may be acquired upon exercise of options that are
currently exercisable or that are exercisable within 60 days of January 29,
1999, which shares and options are owned by Rio Bravo Enterprise
Associates, L.P. Mr. Wilson owns all of the capital stock of Rio Bravo,
Inc., the sole general partner of Rio Bravo Enterprise Associates, L.P.

(2) Ms. Heffner's shares are jointly owned by Ms. Heffner and her spouse.

(3) Mr. Proffitt's shares are jointly owned by Mr. Proffitt and his spouse.

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(4) Mr. Stanek's shares are jointly owned by Mr. Stanek and his spouse.

(5) Represents shares held by Baker, Fentress & Company, as described in the
table. Mr. Smith is an Executive Vice President of Baker Fentress and,
since 1989, has managed its private placement portfolio.

(6) Represents shares held by Endeavour Capital Fund Limited Partnership, as
described in the table. Mr. von Schlegell, a director of Citadel
Broadcasting, is the Managing Partner of Endeavour Capital Fund and the
President and a shareholder of the General Partner of Endeavour Capital
Fund.

(7) Does not include 121,713 shares owned by Mr. Snider's spouse.

(8) These shares are held under the Amended and Restated Voting Trust Agreement
dated October 15, 1997. By its terms, the Amended and Restated Voting Trust
Agreement shall continue in effect until terminated upon the written
agreement of Citadel Communications and the holders of voting trust
certificates which represent a majority of the shares held in the voting
trust as determined in accordance with the Amended and Restated Voting
Trust Agreement. The voting trust also terminates with respect to any
shares upon transfer of such shares to a person who is not an affiliate of
ABRY Broadcast Partners II, L.P. or ABRY Citadel Investment Partners, L.P.
or upon a distribution of shares by ABRY Broadcast Partners II, L.P. or
ABRY Citadel Investment Partners, L.P. to its partners. ABRY Citadel
Investment Partners, L.P. has sold or has distributed all of its shares to
its partners. During the term of the Amended and Restated Voting Trust
Agreement, the voting trustee has the right to vote the shares of stock
subject to that agreement and to take part in any shareholders' meetings,
including the right to vote the shares for the election of directors of
Citadel Communications. The voting trustee may assign his rights and
delegate his obligations to a successor voting trustee, who shall be a
back-up trustee or other person appointed in the manner provided under the
terms of the Amended and Restated Voting Trust Agreement. Dispositive power
with respect to these shares is held by Royce Yudkoff, the President of
ABRY Holdings, Inc., the general partner of ABRY Capital, L. P., the
general partner of ABRY Broadcast Partners II, L.P..

(9) Represents shares held by Mr. Levy as voting trustee under the Amended and
Restated Voting Trust Agreement. See footnote (8).

(10) Includes 8,460,839 shares beneficially owned by ABRY Broadcast Partners II,
L.P. and held by Harlan A. Levy as voting trustee under the Amended and
Restated Voting Trust Agreement. See footnotes (8) and (9).

(11) As reported on Schedule 13G filed with the SEC on February 4, 1999 (dated
January 26, 1999) by Putnam Investments, Inc. on behalf of itself and Marsh
& McLennan Companies, Inc., Putnam Investment Management, Inc. and Putnam
Advisory Company, Inc., the shares indicated are under shared voting and
dispositive power among Putnum Investments, Inc., Putnum Investment
Management, Inc. and Putnum Advisory Company, Inc. Putnum Investment
Management, Inc. and Putnum Advisory Company, Inc. are subsidiaries of
Putnum Investments, Inc., and Putnum Investments, Inc., is a subsidiary of
Marsh & McLennan Companies, Inc. The number of shares shown assume that
there has been no change in the number of shares beneficially owned since
the date of the Schedule 13G. Pursuant to Rule 13d-4 under the Exchange
Act, Marsh & McLennan Companies, Inc. and Putnum Investments, Inc. declared
that their filing of the Schedule 13G shall not be deemed to be an
admission of beneficial ownership of the shares reported.

(12) Includes shares discussed in footnotes (1), (5) and (6).

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DESCRIPTION OF INDEBTEDNESS

EXISTING LOAN AGREEMENT

On October 9, 1996, Citadel Broadcasting, Deschutes River Broadcasting,
Inc., formerly known as Deschutes Acquisition Corporation (now merged into
Citadel Broadcasting), Citadel License and Deschutes License, Inc. (now merged
into Citadel License) entered into a credit facility with FINOVA Capital
Corporation, as administrative agent, and the following lending institutions:

-- FINOVA Capital Corporation,

-- BankBoston, N.A.

-- The Bank of New York,

-- Nationsbank of Texas, N.A., and

-- Union Bank of California, N.A.

On July 3, 1997, Citadel Broadcasting, Citadel License and the agent and
the lenders under the credit facility entered into amendments to the credit
facility which permitted the issuance of Citadel Broadcasting's 10-1/4% notes
and exchangeable preferred stock subject to limitations and restrictions
regarding, among other things, redemption of or payment prior to maturity of
principal on the 10-1/4% notes or Citadel Broadcasting's 13-1/4% exchange
debentures, if issued, the redemption of or exchange of the exchangeable
preferred stock and the payment of cash dividends on the exchangeable preferred
stock. The amendments to the credit facility provided for a revolving loan,
initially in the principal amount of $150.0 million, which included a $5.0
million letter of credit facility. A subsequent amendment increased the letter
of credit facility to $10.0 million.

Concurrently with the consummation of the offering of the outstanding
9-1/4% notes, Citadel Broadcasting, Citadel License and the agent and the
lenders under the credit facility entered into amendments to the credit facility
which permitted the issuance of the outstanding notes subject to limitations and
restrictions regarding, among other things, redemption of or payment prior to
maturity of principal on the notes. See "Description of the Notes." As of
February 1, 1999, the credit facility allowed for borrowings of up to $137.5
million.

Revolving Loan

As of February 1, 1999, no amounts were outstanding under the revolving
loan under the credit facility. The revolving loan may be drawn upon, subject to
conditions, for acquisitions, working capital and other permitted uses. On the
last business day of each quarter, the revolving loan commitment is to be
reduced by an amount increasing from $2.5 million at December 31, 1997 to
approximately $8.1 million at June 30, 2003. The credit facility also provides
for additional mandatory reductions in the revolving loan commitment, and
Citadel Broadcasting and Citadel License are required to pay any amount by which
the outstanding principal balance exceeds the revolving loan commitment, as
adjusted. The remaining principal balance of the revolving loan shall be due and
payable on September 30, 2003. At Citadel Broadcasting's and Citadel License's
election (a) any portion of the revolving loan which has been prepaid or repaid
may be reborrowed and (b) the maximum amount of the revolving loan commitment
may be permanently reduced.

The obligation of the lenders under the credit facility to make additional
loans under the credit facility or issue letters of credit under the letter of
credit facility is subject to
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conditions, including, without limitation, that the adjusted total leverage
ratio not exceed the applicable ratio as calculated on the last day of the most
recent month preceding the applicable date for funding or letter of credit
issuance. The adjusted total leverage ratio is the ratio as of the end of any
month of total debt, as adjusted for permitted acquisitions and dispositions, as
of such date to the operating cash flow, as adjusted for permitted acquisitions
and dispositions, for the twelve-month period ending on such date. The
applicable ratio through May 1999 is 6.00. For each six-month period thereafter
through maturity, the applicable ratio shall decrease by 0.25.

Letter of Credit Facility

The letter of credit facility provides for, subject to certain limitations,
the issuance of letters of credit to be used by Citadel Broadcasting and Citadel
License as security for the obligations of Citadel Broadcasting and Citadel
License under agreements entered into in connection with certain radio station
acquisitions and for such other purposes as may be approved by the agent under
the credit facility. The letter of credit facility requires the payment by
Citadel Broadcasting and Citadel License of a quarterly fee equal to 1.25% of
the amount of each permitted letter of credit from time to time outstanding. As
of the date of this prospectus, letters of credit in the aggregate amount of
$8.5 million are issued and outstanding in connection with the pending
transactions.

Prepayments

Voluntary prepayments of the credit facility are permitted without premium
or penalty. Mandatory prepayment of the credit facility will be required if the
total leverage ratio, the ratio of total debt to operating cash flow, as
adjusted for permitted acquisitions and dispositions, as of the end of each year
is 4.5 or greater. The amount of the mandatory prepayment shall be the lesser of
(a)(1) 66-2/3% of the excess cash flow if the total leverage ratio as of the end
of such year exceeds 5.5 and (2) 50% of the excess cash flow if the total
leverage ratio as of the end of each such year is 4.5 to 5.5, inclusive, or (b)
an amount by which cash equivalents, as of the last day of March in which
Citadel Broadcasting and Citadel License are required to deliver financial
statements, exceeds $5.0 million. Notwithstanding the foregoing, upon retirement
of the credit facility, Citadel Broadcasting will be required to pay a fee in
the maximum amount of $0.7 million as of February 1, 1999, which amount will
decline quarterly based on the amount of outstanding borrowings under the credit
facility.

Interest Rates

The credit facility bears interest at a rate equal to (a) the per annum
rate of interest announced or published publicly from time to time by Citibank,
N.A. in New York, New York as its corporate base rate of interest and which may
be changed automatically without notice, in effect from time to time plus the
applicable margin, which is an additional interest rate as determined under the
credit facility, or (b) at the written election of Citadel Broadcasting and
Citadel License, at a rate determined by the agent under the credit facility to
be the LIBOR rate for the respective interest period, plus the applicable
margin. The LIBOR rate is the average of London interbank offered rates on the
LIBO page of the Bloomberg Service or appropriate successor divided by 1.00
minus the Eurocurrency Reserve Requirements as prescribed by the Federal Reserve
Board or other governmental body, in effect from time to time. Citadel
Broadcasting's and Citadel License's right to elect a LIBOR

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rate will be subject to certain limitations. The applicable margins for the
credit facility are expected to range between 0.50% and 1.75% for the base rate
and 1.50% and 2.75% for the LIBOR rate, depending on the total leverage ratio
from time to time. Except as otherwise provided with respect to voluntary and
mandatory prepayments, interest on the credit facility is payable quarterly in
arrears on the last business day of each quarter. At February 1, 1999, the
interest rate under the credit facility was 6.78%.

Other Fees

Citadel Broadcasting and Citadel License are required to pay to the agent
under the credit facility an unused commitment fee on the last business day of
each quarter, which equals the product of the maximum revolving loan commitment
for the preceding quarter minus the average outstanding principal balance of the
revolving loan under the credit facility during such preceding quarter,
multiplied by 0.125%. This multiplier will be reduced to 0.09375% if the total
leverage ratio calculated as of the last day of the quarter preceding such
quarter was less than 4.5. Citadel Broadcasting and Citadel License are required
to pay an aggregate annual agency fee of $50,000 in October of each year.

Security and Guarantee

Subject to permitted liens, the credit facility is secured by:

(a) a first priority pledge on all of Citadel Broadcasting's and Citadel
License's capital stock other than Citadel Broadcasting's exchangeable preferred
stock,

(b) a first priority security interest in all the existing and after
acquired property of Citadel Broadcasting and Citadel License, including,
without limitation, accounts, machinery, equipment, inventory, general
intangibles, investment property and insurance on the life of Lawrence R.
Wilson, and

The credit facility is also guaranteed by Citadel Communications pursuant
to a guaranty.

Change of Control

The credit facility provides that a change in control or ownership will be
an event of default under the credit facility. A change in control or ownership
shall occur if:

(a) Citadel Communications shall cease to own all of the capital stock of
Citadel Broadcasting (other than the exchangeable preferred stock),

(b) Citadel Broadcasting shall cease to own or control all of the capital
stock of its subsidiaries,

(c) any person (including entities) or affiliates of such person, except
Mr. Wilson or ABRY Broadcast Partners II, L.P. or their respective affiliates,
own capital stock possessing more than 35.0% of the voting power of all voting
stock of Citadel Communications, or

(d) Mr. Wilson shall die, become permanently disabled or cease, for a
period in excess of 60 days, to devote his full business time to the operation
of Citadel Broadcasting's and Citadel License's broadcasting business, unless
Mr. Wilson is replaced by a person reasonably acceptable to the lenders under
the credit facility within 90 days after the occurrence of any such event.

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Covenants

The credit facility contains customary restrictive covenants, which, among
other things, and with exceptions, limit the ability of Citadel Broadcasting and
Citadel License to incur additional indebtedness and liens, enter into
transactions with affiliates, pay dividends, consolidate, merge or affect asset
sales, issue additional stock, make capital or overhead expenditures, make
investments, loans or prepayments and change the nature of their business.
Citadel Broadcasting and Citadel License are also required to satisfy financial
covenants, which will require Citadel Broadcasting and Citadel License to
maintain specified financial ratios and to comply with financial tests, such as
ratios for maximum leverage, senior debt leverage, minimum interest coverage and
minimum fixed charges.

Events of Default

The credit facility contains customary events of default, including without
limitation:

(a) failure of Citadel Broadcasting or Citadel License to pay all or any
portion of the principal balance of the credit facility when due or to pay any
other of their obligations within five days after becoming due and payable,

(b) failure of Citadel Broadcasting or Citadel License to observe or
perform certain affirmative covenants or agreements, specifically those
pertaining to legal existence, good standing, insurance, environmental matters,
the interest hedge contract and all negative covenants,

(c) failure of Citadel Broadcasting, Citadel License or Citadel
Communications to observe or perform any other covenant or agreement contained
in the credit facility or related documents which is not remedied within 30 days
of written notice,

(d) breach of warranty or representation and/or false or misleading
statements by Citadel Broadcasting, Citadel License or Citadel Communications
made in connection with the credit facility or related documents,

(e) certain defaults, including payment defaults, by Citadel Broadcasting
or Citadel License, under other agreements relating to indebtedness,

(f) failure of Citadel Broadcasting, Citadel License or Citadel
Communications to generally pay debts as they become due or to be adjudicated
insolvent,

(g) Citadel Broadcasting's, Citadel License's or Citadel Communications'
filing, or consent to the filing against it, of a petition for relief or
reorganization or arrangement or any other petition in bankruptcy or insolvency
under the law of any jurisdiction or making of an assignment for the benefit of
creditors, or the appointment of a custodian, receiver or trustee for Citadel
Broadcasting, Citadel License or Citadel Communications under certain
circumstances,

(h) failure of Citadel Broadcasting, Citadel License or Citadel
Communications to discharge certain judgments and awards against any of them,

(i) revocation, termination, suspension or adverse modification of any
license which is material to the continuation of Citadel Broadcasting's and
Citadel License's broadcasting business,

(j) seizure or failure to maintain any item of collateral provided as
security under the credit facility,

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(k) complete interruption of on-air broadcast operations in two or more
markets at any time for more than 72 hours during any consecutive ten-day
period,

(l) existence of certain conditions which result in actual or potential
liability to Citadel Broadcasting or Citadel License or any ERISA affiliate for
its pension plan which creates a material adverse effect in the opinion of the
lenders under the credit facility,

(m) a change of ownership or control,

(n) failure of the Citadel Communications' guaranty to remain in full force
and effect, and

(o) Citadel Communications' denial or disaffirmance of obligations under
its guaranty or its failure to make payment when due.

Upon the occurrence of an event of default, with certain limitations,
Citadel Broadcasting's and Citadel License's obligations under the credit
facility which are at that time outstanding may become automatically
accelerated.

10-1/4% NOTES

On July 3, 1997, Citadel Broadcasting offered and sold $101.0 million
aggregate principal amount of 10-1/4% Senior Subordinated Notes due 2007. The
10-1/4% notes were issued pursuant to an Indenture dated as of July 1, 1997
among Citadel Broadcasting, Citadel License and The Bank of New York, as
trustee. Interest on the 10-1/4% notes is payable semi-annually at a rate of
10-1/4% per annum, and the 10-1/4% notes mature on July 1, 2007.

The 10-1/4% notes are unconditionally guaranteed on a senior subordinated
basis by Citadel License, and will be similarly guaranteed by future Restricted
Subsidiaries. The term Restricted Subsidiary under the indenture governing the
10-1/4% notes has the same meaning that this term has under the indenture
governing the 9-1/4% notes. See "Description of the Notes." The 10-1/4% notes
are unsecured senior subordinated obligations of Citadel Broadcasting and are
subordinated to all Senior Debt (as defined in the indenture governing the
10-1/4% notes) of Citadel Broadcasting, including indebtedness under its credit
facility.

Citadel Broadcasting may redeem the 10-1/4% notes, in whole or in part, at
the option of Citadel Broadcasting, at any time on or after July 1, 2002, at the
redemption prices set forth in the indenture governing the 10-1/4% notes
(ranging from 105.125% to 101.025%), plus accrued and unpaid interest, if any,
to the date of redemption. In addition, at any time prior to July 1, 2000,
Citadel Broadcasting may, at its option, redeem a portion of the 10-1/4% notes
with the net proceeds of one or more Public Equity Offerings, at a redemption
price equal to 110.25% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of redemption; provided, however, that after any
such redemption there is outstanding at least $75.0 million aggregate principal
amount of the 10-1/4% notes. The term Public Equity Offering under the indenture
governing the 10-1/4% notes has the same meaning that this term has under the
indenture governing the 9-1/4% notes. See "Description of the Notes." Upon the
occurrence of certain changes of control of Citadel Broadcasting, Citadel
Broadcasting must make an offer to purchase all of the then outstanding 10-1/4%
notes at a price equal to 101.0% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the repurchase date.

Citadel Broadcasting also must offer to repurchase 10-1/4% notes at 100.0%
of their principal amount plus accrued and unpaid interest to the date of
redemption in the event that

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the net proceeds of certain asset sales of Citadel Broadcasting or its
Restricted Subsidiaries are not used within 12 months after the occurrence of
such sales to permanently reduce Senior Debt of Citadel Broadcasting and/or to
make an investment in or acquire replacement assets or assets that will be used
in the broadcast business or businesses reasonably related thereto.

The indenture governing the 10-1/4% notes contains covenants which, among
other things, restrict the ability of Citadel Broadcasting and its subsidiaries
with respect to:

-- the incurrence of additional debt,

-- restricted payments,

-- dividend and other payment restrictions affecting certain
subsidiaries,

-- asset dispositions,

-- certain asset swaps,

-- transactions with affiliates,

-- issuances and sales of stock of subsidiaries,

-- liens, and

-- consolidations, mergers or sales of assets.

Events of default under the indenture governing the 10-1/4% notes include,
among other things, payment defaults, covenant defaults, cross-defaults to
certain other indebtedness, judgment defaults and certain events of bankruptcy
and insolvency.

EXCHANGEABLE PREFERRED STOCK

On July 3, 1997, Citadel Broadcasting also offered and sold 1.0 million
shares of 13-1/4% Exchangeable Preferred Stock, no par value. The exchangeable
preferred stock was sold for, and has a liquidation preference of, $100 per
share. Dividends on the exchangeable preferred stock accumulate from the date of
issuance and are payable semi-annually at a rate of 13-1/4% of the liquidation
preference per share. Dividends on the exchangeable preferred stock are payable
in cash or, at the option of Citadel Broadcasting, on or prior to July 1, 2002,
in additional shares of exchangeable preferred stock. On January 1, 1998, July
1, 1998 and January 1, 1999, Citadel Broadcasting issued an additional 65,514,
shares, 70,590 and 75,267 shares, respectively, of exchangeable preferred stock
in payment of dividends on the then outstanding shares of exchangeable preferred
stock.

Citadel Broadcasting may redeem the exchangeable preferred stock, in whole
or in part, at the option of Citadel Broadcasting, at any time on or after July
1, 2002, at the redemption prices set forth in the Certificate of Designation
governing the exchangeable preferred stock (ranging from 107.729% to 101.104%),
plus accumulated and unpaid dividends, if any, to the date of redemption. In
addition, at any time prior to July 1, 2000, Citadel Broadcasting may, at its
option, redeem up to an aggregate of 35% of the shares of exchangeable preferred
stock with the net proceeds of one or more Public Equity Offerings, at a
redemption price equal to 113.25% of the liquidation preference thereof, plus
accumulated and unpaid dividends, if any, to the date of redemption; provided,
however, that after any such redemption there is outstanding at least $75.0
million aggregate liquidation preference of the exchangeable preferred stock.
The term Public Equity Offering under the Certificate of Designation governing
the exchangeable preferred stock has the same meaning that this term has under
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the indenture governing the 9-1/4% notes. See "Description of the Notes."
Citadel Broadcasting is required, subject to certain conditions, to redeem all
of the exchangeable preferred stock outstanding on July 1, 2009, at a redemption
price equal to 100% of the liquidation preference thereof, plus accumulated and
unpaid dividends, if any, to the date of redemption. Upon the occurrence of
certain changes of control of Citadel Broadcasting, Citadel Broadcasting is
required to make an offer to purchase all of the then outstanding shares of
exchangeable preferred stock at a price equal to 101.0% of the liquidation
preference thereof, plus accumulated and unpaid dividends, if any, to the
repurchase date.

Subject to conditions, the exchangeable preferred stock is exchangeable in
whole, but not in part, at the option of Citadel Broadcasting, on any dividend
payment date, for Citadel Broadcasting's exchange debentures. See "--Exchange
Debentures."

The Certificate of Designation governing the exchangeable preferred stock
contains covenants which, among other things, restrict the ability of Citadel
Broadcasting and its subsidiaries with respect to:

-- the incurrence of additional debt,

-- restricted payments,

-- issuances and sales of stock of certain subsidiaries, and

-- consolidations, mergers or sales of assets.

In the event that, after July 1, 2002, two or more semi-annual dividends
payable on the exchangeable preferred stock are in arrears and unpaid, or upon
the occurrence of other events, including failure to comply with covenants and
failure to pay the mandatory redemption price when due, then the holders of a
majority of the then outstanding shares of exchangeable preferred stock, voting
separately as a class, will be entitled to elect two additional directors of
Citadel Broadcasting, who shall serve until such time as all dividends in
arrears or any other failure, breach or default giving rise to the voting rights
is remedied or waived.

EXCHANGE DEBENTURES

Subject to conditions, Citadel Broadcasting may exchange the outstanding
exchangeable preferred stock in whole, but not in part, at the option of Citadel
Broadcasting, on any dividend payment date, for 13-1/4% Subordinated Exchange
Debentures due 2009 in an aggregate principal amount equal to the then effective
liquidation preference of the exchangeable preferred stock, plus accumulated and
unpaid dividends, if any, to the date fixed for exchange. If such exchange
occurs, the exchange debentures will be issued pursuant to an Indenture dated as
of July 1, 1997 among Citadel Broadcasting, Citadel License and The Bank of New
York, as trustee. Interest on the exchange debentures will be payable semi-
annually at a rate of 13-1/4% per annum, and the exchange debentures will mature
on July 1, 2009. Interest on the exchange debentures will be payable in cash or,
at the option of Citadel Broadcasting, on or prior to July 1, 2002, in
additional exchange debentures.

The exchange debentures will be unconditionally guaranteed on a senior
subordinated basis by Citadel License, and will be similarly guaranteed by
future Restricted Subsidiaries. The term Restricted Subsidiary under the
indenture governing the exchange debentures has the same meaning that this term
has under the indenture governing the 9-1/4% notes. See "Description of the
Notes." The exchange debentures will be unsecured subordinated obligations of
Citadel Broadcasting and will be subordinated to all existing and future Senior

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Debt and Senior Subordinated Debt (each as defined in the indenture governing
the exchange debentures) of Citadel Broadcasting, including its 10-1/4% notes.

Citadel Broadcasting may redeem the exchange debentures, in whole or in
part, at the option of Citadel Broadcasting, at any time on or after July 1,
2002, at the redemption prices set forth in the indenture governing the exchange
debentures, plus accrued and unpaid interest, if any, to the date of redemption.
In addition, at any time prior to July 1, 2000, Citadel Broadcasting may, at its
option, redeem exchange debentures having an aggregate principal amount of up to
35.0% of the aggregate principal amount of exchange debentures issued upon
exchange of the exchangeable preferred stock or in payment of interest on the
exchange debentures, with the net proceeds of one or more Public Equity
Offerings, at a redemption price equal to 113.25% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of redemption;
provided, however, that after any such redemption there is outstanding at least
$75.0 million aggregate principal amount of the exchange debentures. The term
Public Equity Offering under the indenture governing the exchange debentures has
the same meaning that this term has under the indenture governing the 9 1/4%
notes. See "Description of the Notes." Upon the occurrence of certain changes of
control of Citadel Broadcasting, Citadel Broadcasting will be required to make
an offer to purchase all of the then outstanding exchange debentures at a price
equal to 101.0% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the repurchase date.

Citadel Broadcasting also must offer to repurchase exchange debentures at
100% of their principal amount plus accrued and unpaid interest to the date of
redemption in the event that the net proceeds of certain asset sales of Citadel
Broadcasting or its Restricted Subsidiaries are not used within 12 months after
the occurrence of such sales to permanently reduce Senior Debt or Senior
Subordinated Debt of Citadel Broadcasting and/or to make an investment in or
acquire replacement assets or assets that will be used in the broadcast business
or businesses reasonably related thereto.

The indenture governing the exchange debentures contains covenants which,
among other things, restricts the ability of Citadel Broadcasting and its
subsidiaries with respect to:

-- the incurrence of additional debt,

-- restricted payments,

-- dividend and other payment restrictions affecting certain
subsidiaries,

-- asset dispositions,

-- certain asset swaps,

-- transactions with affiliates,

-- issuances and sales of stock of certain subsidiaries,

-- liens, and

-- consolidations, mergers or sales of assets.

Events of default under the indenture governing the exchange debentures
include, among other things, payment defaults, covenant defaults, cross-defaults
to certain other indebtedness, judgment defaults and certain events of
bankruptcy and insolvency.

9-1/4% NOTES

For a description of Citadel Broadcasting's 9-1/4% Senior Subordinated
Notes due 2008, See "Description of the Notes."

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OTHER INDEBTEDNESS

In connection with its acquisition of Tele-Media Broadcasting Company,
Citadel Broadcasting incurred a $1.0 million contingent payment obligation which
accrues interest at 5.0% per year. Citadel Broadcasting will be obligated to
make such payment to the former holders of corporate bonds and warrants of
Tele-Media only if a particular $2.0 million payment relating to Citadel
Broadcasting's Providence, Rhode Island operations is received from a third
party.

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THE EXCHANGE OFFER

BACKGROUND

Citadel Broadcasting originally sold the outstanding 9-1/4% Senior
Subordinated Notes due 2008 on November 19, 1998 in a transaction exempt from
the registration requirements of the Securities Act. Prudential Securities
Incorporated and BT Alex. Brown Incorporated, as the initial purchasers,
subsequently resold the notes to qualified institutional buyers in reliance on
Rule 144A and pursuant to Regulation S under the Securities Act. As of the date
of this prospectus, $115.0 million aggregate principal amount of unregistered
notes are outstanding.

Citadel Broadcasting, Citadel License, Prudential Securities Incorporated
and BT Alex. Brown Incorporated entered into a registration rights agreement
under which Citadel Broadcasting agreed that it would, at its own cost,

-- use its best efforts to cause an exchange offer registration statement
to be declared effective under the Securities Act within 180 days
after November 19, 1998, the original issue date of the outstanding
notes, and

-- use its best efforts to consummate the exchange offer within 210 days
after November 19, 1998.

The summary in this prospectus of provisions of the registration rights
agreement does not purport to be complete and is subject to, and is qualified in
its entirety by, all the provisions of the registration rights agreement, a copy
of which is filed as an exhibit to the registration statement of which this
prospectus is a part.

RESALE OF THE NEW NOTES

Based on no-action letters issued by the staff of the SEC to third parties,
Citadel Broadcasting believes that a holder of outstanding notes, but not a
holder who is an affiliate of Citadel Broadcasting within the meaning of Rule
405 of the Securities Act, who exchanges outstanding notes for new notes in the
exchange offer, generally may offer the new notes for resale, sell the new notes
and otherwise transfer the new notes without further registration under the
Securities Act and without delivery of a prospectus that satisfies the
requirements of Section 10 of the Securities Act. However, Citadel Broadcasting
believes that a holder may so offer, sell or transfer the new notes only if the
holder acquires the new notes in the ordinary course of its business and is not
participating, does not intend to participate and has no arrangement or
understanding with any person to participate in a distribution of the new notes.

Any holder of outstanding notes using the exchange offer to participate in
a distribution of new notes (including a broker-dealer that acquired outstanding
notes directly from Citadel Broadcasting, but not as a result of market-making
activities or other trading activities) cannot rely on the no-action letters
referred to above. Consequently, the holder must comply with the registration
and prospectus delivery requirements of the Securities Act in the absence of an
exemption from such requirements.

Each broker-dealer that receives new notes for its own account in exchange
for outstanding notes, where such outstanding notes were acquired by the
broker-dealer as a result of market-making activities or other trading
activities ("Participating Broker-Dealer") may be a statutory underwriter and
must acknowledge that it will deliver a prospectus meeting the requirements of
the Securities Act in connection with the resale of new notes
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<PAGE> 110

received in exchange for outstanding notes. The letter of transmittal which
accompanies this prospectus states that by so acknowledging and by delivering a
prospectus, a Participating Broker-Dealer will not be deemed to admit that it is
an underwriter within the meaning of the Securities Act. A Participating
Broker-Dealer may use this prospectus, as it may be amended from time to time,
in connection with resales of new notes it receives in exchange for outstanding
notes in the exchange offer. Citadel Broadcasting will make this prospectus
available to any Participating Broker-Dealer in connection with any resale of
this kind for a period of 120 days after the expiration date of the exchange
offer. See "Plan of Distribution".

Each holder of the outstanding notes who wishes to exchange outstanding
notes for new notes in the exchange offer will be required to represent and
acknowledge, for the holder and for each beneficial owner of such outstanding
notes, whether or not the beneficial owner is the holder, in the letter of
transmittal that:

-- the new notes to be acquired by the holder and each beneficial owner,
if any, are being acquired in the ordinary course of business,

-- neither the holder nor any beneficial owner is an affiliate, as
defined in Rule 405 of the Securities Act, of Citadel Broadcasting or
any of its subsidiaries,

-- any person participating in the exchange offer with the intention or
purpose of distributing new notes received in exchange for outstanding
notes (including a broker-dealer that acquired outstanding notes
directly from Citadel Broadcasting, but not as a result of
market-making activities or other trading activities) cannot rely on
the no-action letters referenced above and must comply with the
registration and prospectus delivery requirements of the Securities
Act, in connection with a secondary resale of the new notes acquired
by such person,

-- if the holder is not a broker-dealer, the holder and each beneficial
owner, if any, are not participating, do not intend to participate and
have no arrangement or understanding with any person to participate in
any distribution of the new notes received in exchange for outstanding
notes, and

-- if the holder is a broker-dealer that will receive new notes for the
holder's own account in exchange for outstanding notes, the
outstanding notes to be so exchanged were acquired by the holder as a
result of market-making or other trading activities and the holder
will deliver a prospectus meeting the requirements of the Securities
Act in connection with any resale of such new notes received in the
exchange offer. However, by so representing and acknowledging and by
delivering a prospectus, the holder will not be deemed to admit that
it is an underwriter within the meaning of the Securities Act.

Under the registration rights agreement, Citadel Broadcasting is required
to allow Participating Broker-Dealers to use this prospectus in connection with
the resale of new notes received in the exchange offer. See "Plan of
Distribution."

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SHELF REGISTRATION STATEMENT

In the event that:

(1) applicable law or interpretations of the staff of the SEC do not permit
Citadel Broadcasting to effect the exchange offer,

(2) the exchange offer is not consummated within 210 days after November
19, 1998,

(3) any holder of outstanding notes (other than Prudential Securities
Incorporated and BT Alex. Brown Incorporated, the initial purchasers of the
outstanding notes) is not eligible to participate in the exchange offer, or

(4) Prudential Securities Incorporated or BT Alex. Brown Incorporated so
requests (with respect to any outstanding notes which it acquired directly from
Citadel Broadcasting) following the consummation of the exchange offer if
certain circumstances are met,

Citadel Broadcasting will, at its cost:

-- file, as promptly as practicable and, in any event, within 90
days after the obligation arises, a shelf registration
statement covering resales of the outstanding notes,

-- use its best efforts to cause the shelf registration statement
to be declared effective under the Securities Act within 45
days after the filing occurs, and

-- use its best efforts to keep effective the shelf registration
statement until the earlier of two years after its effective
date, the time when all of the applicable outstanding notes
have been sold thereunder and the time when all of the
applicable outstanding notes become eligible for resale
pursuant to Rule 144 under the Securities Act without volume
restrictions.

Citadel Broadcasting will, in the event of the filing of the shelf
registration statement, provide to each holder of the outstanding notes copies
of the prospectus which is a part of the shelf registration statement, notify
each holder when the shelf registration statement has become effective and take
other actions as are required to permit unrestricted resales of the outstanding
notes. A holder that sells outstanding notes pursuant to the shelf registration
statement generally will be required to be named as a selling security-holder in
the related prospectus and to deliver a prospectus to purchasers, will be
subject to civil liability provisions under the Securities Act in connection
with these sales and will be bound by the provisions of the registration rights
agreement which are applicable to the holder (including indemnification
obligations). In addition, each holder of outstanding notes will be required to
deliver information to be used in connection with the shelf registration
statement in order to have its outstanding notes included in the shelf
registration statement.

INCREASE IN INTEREST RATE

In the event that (1) the exchange offer is not completed a shelf
registration statement is not declared effective on or prior to the 210th
calendar day following November 19, 1998 or (2) either (a) the exchange offer
registration statement ceases to be effective at any time prior to the time that
the exchange offer is completed or (b) if applicable, the shelf registration
statement has been declared effective and such shelf registration statement
ceases to be

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effective at any time prior to the second anniversary of its effective date, the
interest rate borne by the outstanding notes will be increased in accordance
with the following table:

<TABLE>
<CAPTION>
INITIAL INCREASE SUBSEQUENT INCREASES
EVENT IN INTEREST RATE IN INTEREST RATE
- -------------------------- -------------------------- --------------------------
<S> <C> <C>
1. Exchange offer not 0.25% per annum following Additional 0.25% per annum
consummated or shelf this 210-day period for each 90-day period
registration statement that additional interest
not declared effective continues to accrue
on or prior to 210th day
following November 19,
1998

2. Exchange offer 0.25% per annum Additional 0.25% per annum
registration statement immediately after this for each 90-day period
ceases to be effective type of occurrence that additional interest
prior to completion of continues to accrue
exchange offer or shelf
registration statement
ceases to be effective
at any time prior to the
second anniversary of
its effective date
</TABLE>

However, in no event will the interest rate borne by the outstanding notes be
increased by an aggregate of more than 1.5%.

Upon the completion of the exchange offer or the effectiveness of a shelf
registration statement, as the case may be, after the 210-day period described
in clause (1) in the prior paragraph, or the effectiveness of the registration
statement or the shelf registration statement following an event described in
clause (2) in the prior paragraph, the interest rate borne by the outstanding
notes from the date of such completion or effectiveness, as the case may be,
will be reduced to the original interest rate if Citadel Broadcasting is
otherwise in compliance with the above. However, if after any such reduction in
interest rate, a different event specified in clause (1) or (2) in the prior
paragraph occurs, the interest rate may again be increased under the provisions
described above.

If applicable, in the event that the shelf registration statement ceases to
be usable for a period in excess of 30 days, whether or not consecutive, in any
given year, then the interest rate borne by the outstanding notes will be
increased by 0.25% per annum on the 31st day in the applicable year the shelf
registration statement ceases to be usable. Such interest rate will increase by
an additional 0.25% per annum for each additional 90 days that the shelf
registration statement is not usable, subject to the same aggregate maximum
increase in the interest rate of 1.5% per annum referred to above. Upon Citadel
Broadcasting declaring that the shelf registration statement is usable after the
interest rate has been so increased, the interest rate borne by the outstanding
notes will be reduced to the original interest rate if Citadel Broadcasting is
otherwise in compliance with the above. However, if after any such reduction in
interest rate, the shelf registration statement again ceases to be usable beyond
the period permitted above, the interest rate may again be increased and
thereafter reduced pursuant to the provisions described above.

Any amounts of additional interest due as described above will be payable
in cash on the same interest payments dates as the outstanding notes.

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TERMS OF THE EXCHANGE OFFER

Upon the exchange offer registration statement being declared effective,
Citadel Broadcasting will offer the new notes in exchange for surrender of the
outstanding notes. Citadel Broadcasting will keep the exchange offer open for
not less than 30 days and not more than 45 days, or longer if required by
applicable law, after the date notice of the exchange offer is mailed to the
holders of the outstanding notes.

Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal which accompanies this prospectus, Citadel
Broadcasting will accept any and all outstanding notes validly tendered and not
withdrawn prior to 5:00 p.m., New York City time, on the expiration date of the
exchange offer. Citadel Broadcasting will issue an equal principal amount of new
notes in exchange for such principal amount of outstanding notes accepted in the
exchange offer. Holders may tender some or all of their outstanding notes under
the exchange offer. Outstanding notes may be tendered only in integral multiples
of $1,000.

The form and terms of the new notes will be the same as the form and terms
of the outstanding notes except that:

(1) the new notes will bear a different CUSIP number from the outstanding
notes,

(2) the new notes will have been registered under the Securities Act and
therefore will not bear legends restricting the transfer thereof, and

(3) the holders of the new notes will not be entitled to certain rights
under the registration rights agreement, which rights will terminate when the
exchange offer is completed.

The new notes will evidence the same debt as the outstanding notes and will be
entitled to the benefits of the indenture governing the outstanding notes.

In connection with the exchange offer, holders of outstanding notes do not
have any appraisal or dissenters' rights under the indenture governing the
outstanding notes or the General Corporation Law of Nevada. Citadel Broadcasting
intends to conduct the exchange offer in accordance with the applicable
requirements of the Exchange Act and the rules and regulations of the SEC
thereunder.

Citadel Broadcasting shall be deemed to have accepted validly tendered
outstanding notes when, as and if Citadel Broadcasting has given oral or written
notice of acceptance to The Bank of New York, exchange agent for the exchange
offer. The Bank of New York will act as agent for the tendering holders for the
purpose of receiving the new notes from Citadel Broadcasting.

If any tendered outstanding notes are not accepted for exchange because of
an invalid tender, the occurrence of certain other events set forth in this
prospectus or otherwise, the certificates for the unaccepted outstanding notes
will be returned, without expense, to the tendering holder as promptly as
practicable after the expiration date of the exchange offer.

Holders who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes with respect to the exchange of
outstanding notes in the exchange offer. Citadel Broadcasting will pay all
charges and expenses, other than transfer taxes in certain circumstances, in
connection with the exchange offer. See "--Fees and Expenses."

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EXPIRATION DATE; EXTENSIONS; AMENDMENTS

The expiration date of the exchange offer is 5:00 p.m., New York City time,
on March 22, 1999, unless Citadel Broadcasting, in its sole discretion, extends
the exchange offer, in which case the expiration date shall be the latest date
and time to which the exchange offer is extended.

In order to extend the exchange offer, Citadel Broadcasting will notify The
Bank of New York of any extension by written notice and will mail to the
registered holders an announcement of the extension, each prior to 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
expiration date.

Citadel Broadcasting reserves the right, in its sole discretion, (1) to
delay accepting any outstanding notes, to extend the exchange offer or to
terminate the exchange offer if any of the conditions set forth below under
"--Conditions" shall not have been satisfied, by giving written notice of the
delay, extension or termination to The Bank of New York or (2) to amend the
terms of the exchange offer in any manner. Any such delay in acceptance,
extension, termination or amendment will be followed as promptly as practicable
by written notice of the delay to the registered holders.

INTEREST ON THE NEW NOTES

Interest on the new notes will accrue from and including their issuance
date. Additionally, interest on the new notes will accrue from the last interest
payment date on which interest was paid on the outstanding notes surrendered in
exchange for new notes. Alternatively, if no interest has been paid on the
outstanding notes, interest on the new notes will accrue from November 19, 1998,
the date of original issuance of the outstanding notes to but not including the
issuance date of the new notes. Holders whose outstanding notes are accepted for
exchange will be deemed to have waived the right to receive interest accrued on
such outstanding notes. Accordingly, holders who exchange their outstanding
notes will receive the same interest payment on the next interest payment date
following the expiration date of the exchange offer that they would have
received had they not accepted the exchange offer. Interest on the new notes is
payable semi-annually on each May 15 and November 15 commencing on May 15, 1999.

PROCEDURES FOR TENDERING

Only a holder of outstanding notes may tender the holder's outstanding
notes in the exchange offer. To tender in the exchange offer, a holder must do
the following:

-- complete, sign and date the letter of transmittal, or a facsimile of
the letter of transmittal,

-- have the signatures thereon guaranteed if required by the letter of
transmittal, and

-- except as discussed in "--Guaranteed Delivery Procedures," mail or
otherwise deliver the letter of transmittal, or facsimile, together
with the outstanding notes and any other required documents, to The
Bank of New York prior to 5:00 p.m., New York City time, on the
expiration date of the exchange offer.

To be tendered effectively, the outstanding notes, letter of transmittal
and other required documents must be completed and received by The Bank of New
York at the address set forth below under "--Exchange Agent" prior to 5:00 p.m.,
New York City time, on the

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expiration date. Delivery of the outstanding notes may be made by book-entry
transfer in accordance with the procedures described below. Confirmation of any
book-entry transfer must be received by The Bank of New York prior to the
expiration date.

By executing a letter of transmittal, each holder will make to Citadel
Broadcasting the representations set forth above in the fourth paragraph under
the heading "--Resale of the New Notes."

The tender by a holder and the acceptance of the tender by Citadel
Broadcasting will constitute the agreement between the holder and Citadel
Broadcasting in accordance with the terms and subject to the conditions set
forth in this prospectus and in the letter of transmittal.

THE METHOD OF DELIVERY OF OUTSTANDING NOTES AND THE LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRES DOCUMENTS TO THE BANK OF NEW YORK IS AT THE ELECTION AND
SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH
TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, HOLDERS SHOULD
ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO THE BANK OF NEW YORK BEFORE THE
EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE SENT TO
CITADEL BROADCASTING. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS
ON THEIR BEHALF.

Any beneficial owner whose outstanding notes are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct it to
tender on the beneficial owner's behalf. See "Instructions to Registered Holder
and/or Book-Entry Transfer Facility Participant from Beneficial Owner" included
with the letter of transmittal.

Signatures on a letter of transmittal or a notice of withdrawal must be
guaranteed by a member firm of a recognized Medallion Program approved by the
Securities Transfer Association Inc. unless the outstanding notes tendered
pursuant thereto are tendered (1) by a registered holder who has not completed
the box entitled Special Delivery Instructions on the letter of transmittal or
(2) for the account of a member firm of a recognized Medallion Program approved
by the Securities Transfer Association Inc. In the event that signatures on a
letter of transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, the guarantee must be by a member firm of a
recognized Medallion Program approved by the Securities Transfer Association
Inc.

If a letter of transmittal is signed by a person other than the registered
holder of any outstanding notes listed in the letter of transmittal, the
outstanding notes must be endorsed or accompanied by a properly completed bond
power, signed by the registered holder as the registered holder's name appears
on the outstanding notes with the signature on the notes or bond power, as the
case may be, guaranteed by a member firm of a recognized Medallion Program
approved by the Securities Transfer Association Inc.

If a letter of transmittal or any outstanding notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and evidence
satisfactory to Citadel Broadcasting of their authority to so act must be
submitted with the letter of transmittal.

Citadel Broadcasting understands that The Bank of New York will make a
request promptly after the date of this prospectus to establish accounts with
respect to the outstanding notes at the book-entry transfer facility, The
Depository Trust Company, for the

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purpose of facilitating the exchange offer, and subject to the establishment of
the accounts, any financial institution that is a participant in the book-entry
transfer facility's system may make book-entry delivery of outstanding notes by
causing the book-entry transfer facility to transfer the outstanding notes into
The Bank of New York's account with respect to the outstanding notes in
accordance with the book-entry transfer facility's procedures for such transfer.
Although delivery of the outstanding notes may be effected through book-entry
transfer into The Bank of New York's account at the book-entry transfer
facility, an appropriate letter of transmittal properly completed and duly
executed with any required signature guarantee and all other required documents
must in each case be transmitted to and received or confirmed by The Bank of New
York at its address set forth below on or prior to the expiration date of the
exchange offer, or, if the guaranteed delivery procedures described below are
complied with, within the time period provided under such procedures. Delivery
of documents to the book-entry transfer facility does not constitute delivery to
The Bank of New York.

All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tendered outstanding notes and withdrawal of tendered
outstanding notes will be determined by Citadel Broadcasting in its sole
discretion, which determination will be final and binding. Citadel Broadcasting
reserves the absolute right to reject any and all outstanding notes not properly
tendered or any outstanding notes Citadel Broadcasting's acceptance of which
would, in the opinion of counsel for Citadel Broadcasting, be unlawful. Citadel
Broadcasting also reserves the right in its sole discretion to waive any
defects, irregularities or conditions of tender as to particular outstanding
notes. Citadel Broadcasting's interpretation of the terms and conditions of the
exchange offer, including the instructions in the letter of transmittal, will be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of outstanding notes must be cured within a period of
time that Citadel Broadcasting shall determine. Although Citadel Broadcasting
intends to notify holders of defects or irregularities with respect to tenders
of outstanding notes, neither Citadel Broadcasting, The Bank of New York nor any
other person shall incur any liability for failure to give such notification.
Tenders of outstanding notes will not be deemed to have been made until such
defects or irregularities have been cured or waived. Any outstanding notes
received by The Bank of New York that are not properly tendered and as to which
the defects or irregularities have not been cured or waived will be returned by
The Bank of New York to the tendering holders, unless otherwise provided in the
letter of transmittal, as soon as practicable following the expiration date of
the exchange offer.

GUARANTEED DELIVERY PROCEDURES

A holder who wishes to tender its outstanding notes and:

(1) whose outstanding notes are not immediately available,

(2) who cannot deliver the holder's outstanding notes, the letter of
transmittal or any other required documents to The Bank of New York, or

(3) who cannot complete the procedures for book-entry transfer, prior to
the expiration date,

may effect a tender if:

-- the tender is made through a member firm of a recognized Medallion
Program approved by the Securities Transfer Association Inc.

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-- prior to the expiration date, The Bank of New York receives from the
member firm of a recognized Medallion Program approved by the
Securities Transfer Association Inc. a properly completed and duly
executed notice of guaranteed delivery (by facsimile transmission,
mail or hand delivery) setting forth the name and address of the
holder, the certificate number(s) of the outstanding notes and the
principal amount of outstanding notes tendered, stating that the
tender is being made thereby and guaranteeing that, within five New
York Stock Exchange trading days after the expiration date, the letter
of transmittal (or facsimiles thereof) together with the
certificate(s) representing the outstanding notes (or a confirmation
of book-entry transfer of the outstanding notes into The Bank of New
York's account at the book-entry transfer facility), and any other
documents required by the letter of transmittal will be deposited by
the member firm of a recognized Medallion Program approved by the
Securities Transfer Association Inc. with The Bank of New York, and

-- The Bank of New York receives, within five New York Stock Exchange
trading days after the expiration date, a properly completed and
executed letter of transmittal (or facsimile thereof), as well as the
certificate(s) representing all tendered outstanding notes in proper
form for transfer (or a confirmation of book-entry transfer of such
outstanding notes into The Bank of New York's account at the
book-entry transfer facility), and all other documents required by the
letter of transmittal.

Upon request to The Bank of New York, a notice of guaranteed delivery will
be sent to holders who wish to tender their outstanding notes according to the
guaranteed delivery procedures set forth above.

WITHDRAWAL OF TENDERS

Except as otherwise provided in this prospectus, tenders of outstanding
notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on
the expiration date of the exchange offer.

To withdraw a tender of outstanding notes in the exchange offer, a letter
or facsimile transmission notice of withdrawal must be received by The Bank of
New York at its address set forth below prior to 5:00 p.m., New York City time,
on the expiration date. Any notice of withdrawal must:

-- specify the name of the person having deposited the
outstanding notes to be withdrawn,

-- identify the outstanding notes to be withdrawn (including the
certificate number(s) and principal amount of such outstanding
notes or, in the case of outstanding notes transferred by
book-entry transfer, the name and number of the account at the
book-entry transfer facility to be credited),

-- be signed by the holder in the same manner as the original
signature on the letter of transmittal by which the
outstanding notes were tendered (including any required
signature guarantees) or be accompanied by documents of
transfer sufficient to have the trustee under the indenture
governing the outstanding notes register the transfer of the
outstanding notes into the name of the person withdrawing the
tender, and

-- specify the name in which any such outstanding notes are to be
registered, if different from that of the person who deposited
the notes.

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All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by Citadel Broadcasting, whose
determination shall be final and binding on all parties. Any outstanding notes
so withdrawn will be deemed not to have been validly tendered for purposes of
the exchange offer, and no new notes will be issued with respect thereto unless
the outstanding notes so withdrawn are validly retendered. Any outstanding notes
which have been tendered but which are not accepted for exchange will be
returned to the holder of the notes without cost to the holder as soon as
practicable after withdrawal, rejection of tender or termination of the exchange
offer. Properly withdrawn outstanding notes may be retendered by following one
of the procedures described above under "--Procedures for Tendering" at any time
prior to the expiration date.

CONDITIONS

Notwithstanding any other term of the exchange offer, Citadel Broadcasting
shall not be required to accept for exchange, or exchange new notes for, any
outstanding notes and may terminate or amend the exchange offer as provided in
this prospectus before the acceptance of the outstanding notes, if the exchange
offer, or the making of any exchange by a holder of outstanding notes, violates
applicable law or any applicable interpretation of the staff of the SEC.

EXCHANGE AGENT

The Bank of New York has been appointed as exchange agent for the exchange
offer. Questions and requests for assistance, requests for additional copies of
this prospectus or of the letter of transmittal and requests for notice of
guaranteed delivery should be directed to The Bank of New York addressed as
follows:

For Information by Telephone:
(212) 815-6335

<TABLE>
<S> <C>
By Registered or Certified Mail: By Hand or Overnight Delivery Service:
The Bank of New York The Bank of New York
101 Barclay Street 101 Barclay Street
(7 East) Corporate Trust Services Window
New York, New York 10286 Ground Level
Attention: Reorganization Section New York, New York 10286
Attention: Reorganization Section, 7 East
</TABLE>

By Facsimile Transmission:
(212) 815-6339 or (212) 815-4699

(Facsimile Confirmation)
(212) 815-6335

Originals of all documents sent by facsimile should be sent promptly by
registered or certified mail, by hand, or by overnight delivery service.
Delivery to an address or transmission of instructions via facsimile other than
as set forth above will not constitute a valid delivery.

The Bank of New York also acts as trustee under the indenture governing the
notes.

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FEES AND EXPENSES

Citadel Broadcasting will bear the expenses of soliciting tenders. The
principal solicitation is being made by mail. However, additional solicitation
may be made by telegraph, telecopy, telephone or in person by officers and
regular employees of Citadel Broadcasting and its affiliates.

Citadel Broadcasting has not retained any dealer-manager in connection with
the exchange offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the exchange offer. Citadel Broadcasting, however,
will pay The Bank of New York reasonable and customary fees for its services and
will reimburse it for its reasonable out-of-pocket expenses in connection with
providing the services.

The cash expenses to be incurred in connection with the exchange offer will
be paid by Citadel Broadcasting. Such expenses includes fees and expenses of The
Bank of New York as exchange agent and as trustee under the indenture governing
the notes, accounting and legal fees and printing costs, among others.

ACCOUNTING TREATMENT

The new notes will be recorded at the same carrying value as the
outstanding notes as reflected in Citadel Broadcasting's accounting records on
the date of exchange. Accordingly, no gain or loss for accounting purposes will
be recognized by Citadel Broadcasting. The expenses of the exchange offer will
be amortized over the term of the notes.

CONSEQUENCES OF FAILURE TO EXCHANGE

Holders of outstanding notes who are eligible to participate in the
exchange offer but who do not tender their outstanding notes will not have any
further registration rights, and their outstanding notes will continue to be
subject to restrictions on transfer. Accordingly, such outstanding notes may be
resold only:

-- to Citadel Broadcasting, upon redemption thereof or otherwise,

-- so long as the outstanding notes are eligible for resale pursuant to
Rule 144A under the Securities Act, to a person inside the United
States whom the seller reasonably believes is a qualified
institutional buyer within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A,

-- in accordance with Rule 144 under the Securities Act, or pursuant to
another exemption from the registration requirements of the Securities
Act, and based upon an opinion of counsel reasonably acceptable to
Citadel Broadcasting,

-- outside the United States to a foreign person in a transaction meeting
the requirements of Rule 904 under the Securities Act, or

-- pursuant to an effective registration statement under the Securities
Act,

in each case in accordance with any applicable securities laws of any state of
the United States.

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DESCRIPTION OF THE NOTES

INTRODUCTION TO THE INDENTURE

The outstanding notes were, and the new notes will be, issued under an
Indenture dated as of November 19, 1998 between Citadel Broadcasting, Citadel
License and The Bank of New York, as trustee, a copy of which is available from
Citadel Broadcasting. Upon the effectiveness of the registration statement, of
which this prospectus is a part, the indenture will be subject to and governed
by the Trust Indenture Act of 1939, as this Act may have been amended. The
summary of the material provisions of the indenture in this "Description of the
Notes" section includes all material information with regard to those
provisions. FOR DEFINITIONS OF CERTAIN CAPITALIZED TERMS USED IN THIS
"DESCRIPTION OF THE NOTES" SECTION, SEE THE DISCUSSION UNDER THE "CERTAIN
DEFINITIONS" HEADING BELOW.

GENERAL TERMS OF THE NOTES

The notes will mature on November 15, 2008, will be initially limited to
$115.0 million aggregate principal amount and will be subordinate and junior in
right of payment to all existing and future Senior Debt of Citadel Broadcasting.
Each note will bear interest at the rate of 9-1/4% per annum. Interest on the
new notes will accrue from and including their issuance date.

Additionally, interest on the new notes will accrue from the last interest
payment date on which interest was paid on the outstanding notes surrendered in
exchange therefor. Alternatively, if no interest has been paid on the
outstanding notes, interest on the new notes will accrue from November 19, 1998,
the date of original issuance of the outstanding notes, to but not including the
issuance date of the new notes. Holders whose outstanding notes are accepted for
exchange will be deemed to have waived the right to receive interest accrued on
such outstanding notes. Accordingly, holders who exchange their outstanding
notes will receive the same interest payment on the next interest payment date
following the expiration date of the exchange offer that they would have
received had they not accepted the exchange offer.

Interest is payable semi-annually on May 15 and November 15 of each year,
commencing May 15, 1999, until the principal thereof is paid or duly provided
for, to the person in whose name the note (or any predecessor note) is
registered at the close of business on the May 1 or November 1 next preceding
such interest payment date. Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months.

The principal of and premium, if any, and interest on the notes will be
payable, and the notes will be exchangeable and transferable, at the office or
agency of Citadel Broadcasting in the City of New York maintained for such
purposes. This office will initially be the office of The Bank of New York
located at 101 Barclay Street, New York, New York 10286. At the option of
Citadel Broadcasting, however, interest may be paid by check mailed to the
address of the person entitled thereto as such address appears in the security
register for the notes. The new notes will be issued only in registered form
without coupons and only in denominations of $1,000 and integral multiples
thereof. No service charge will be made for any registration of transfer or
exchange or redemption of notes, but Citadel Broadcasting may require payment in
certain circumstances of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.

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<PAGE> 121

Subject to the covenants described below under "--Certain Covenants" and
applicable laws, Citadel Broadcasting may, from time to time, issue additional
senior subordinated notes under the indenture. The notes will, and any
additional senior subordinated notes would, be treated as a single class for all
purposes under the indenture.

As of the date hereof, Citadel Broadcasting's only Subsidiary is a
Restricted Subsidiary and a Subsidiary Notes Guarantor. However, under certain
circumstances, Citadel Broadcasting will be able to designate future
Subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries will not be
subject to any of the restrictive covenants set forth in the indenture. The
circumstances in which Citadel Broadcasting may designate a Subsidiary as an
Unrestricted Subsidiary are described below under the "Unrestricted
Subsidiaries" covenant.

Any outstanding notes that remain outstanding after completion of the
exchange offer and new notes issued in connection with the exchange offer will
be treated as a single class of securities under the indenture.

The notes will not be entitled to the benefit of any sinking fund.

GUARANTEES
- --------------------------------------------------------------------------------

Summary: The notes will be jointly and severally and unconditionally
guaranteed on a senior subordinated basis by Citadel License and each of Citadel
Broadcasting's future Subsidiaries that issues a Subsidiary Notes Guarantee. The
guarantee obligation of each Subsidiary is limited to help prevent its being
held unenforceable as a fraudulent conveyance. See "Risk Factors--Potential
Unenforceability of Subsidiary Guarantees."
- --------------------------------------------------------------------------------

Payment of the principal of (and premium, if any, on) and interest on the
notes, when and as the same become due and payable, is unconditionally
guaranteed, jointly and severally, on a senior subordinated basis by the
Subsidiary Notes Guarantors.

In applying either federal or state statutes that are intended to protect
creditors, frequently referred to as fraudulent conveyance laws, a court may
void or hold unenforceable a Subsidiary Notes Guarantee. Although fraudulent
conveyance laws differ among jurisdictions, in general a court could subordinate
or void a Subsidiary Notes Guarantee if it finds that:

-- the debt under the Subsidiary Notes Guarantee was incurred with
intent to hinder, delay or defraud creditors, or

-- the Subsidiary Notes Guarantor did not receive fair consideration
or reasonably equivalent value for its Subsidiary Notes Guarantee
and it:

-- was insolvent when the Subsidiary Notes Guarantee was made,

-- was rendered insolvent as a result of its Subsidiary Notes
Guarantee,

-- was engaged in a business or transaction for which its
remaining assets constituted unreasonably small capital, or

-- intended to incur, or believed that it would incur, debts
beyond its ability to pay upon maturity.

The obligations of each Subsidiary Notes Guarantor under its Subsidiary
Notes Guarantee are limited so as not to constitute a fraudulent conveyance
under applicable law.

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<PAGE> 122

However, a court may not give effect to this limitation on liability. See "Risk
Factors--Potential Unenforceability of Subsidiary Guarantees."

The indenture requires that each Wholly Owned Restricted Subsidiary be a
Subsidiary Notes Guarantor, as well as each other Restricted Subsidiary that
guarantees any other Debt of Citadel Broadcasting.

The indenture provides that no Subsidiary Notes Guarantor may consolidate
with or merge with or into any other person (other than Citadel Broadcasting or
another Subsidiary Notes Guarantor) or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets in one or more
related transactions to another person unless: (a) subject to the provisions of
the following paragraph, the person formed by or surviving such consolidation or
merger or to which all or substantially all of such assets are disposed (if
other than Citadel Broadcasting or a Subsidiary Notes Guarantor) assumes all of
the obligations of such Subsidiary Notes Guarantor under the indenture and its
Subsidiary Notes Guarantee, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the trustee under the indenture and (b)
immediately after giving effect to such transaction, no Default or Event of
Default has occurred and is continuing. For a list of occurrences that
constitute an Event of Default under the indenture, see "--Events of Default."

The indenture provides that, in the event of

(a) a sale, transfer or other disposition of all of the Capital Stock of a
Subsidiary Notes Guarantor to a person that is not an Affiliate of Citadel
Broadcasting,

(b) a sale, transfer or other disposition of all or substantially all of
the assets of a Subsidiary Notes Guarantor to a person that is not an Affiliate
of Citadel Broadcasting, or

in any such case in compliance with the terms of the indenture, then such
Subsidiary Notes Guarantor will be deemed automatically and unconditionally
released and discharged from all of its obligations under the indenture and its
Subsidiary Notes Guarantee without any further action on the part of the trustee
under the indenture or any holder of the notes; provided that the Net Cash
Proceeds of any such sale, transfer or other disposition are applied in
accordance with the "Limitation on Certain Asset Sales" covenant.

SUBORDINATION
- --------------------------------------------------------------------------------

Summary: Citadel Broadcasting's and the Subsidiary Notes Guarantors'
obligation to repay the notes is subordinated to all Senior Debt which at
September 30, 1998, on a pro forma basis, after giving effect to the
transactions described in "Pro Forma Financial Information," would have been
$36.8 million. Citadel Broadcasting may from time to time incur additional
Senior Debt subject to the "Limitation on Debt" covenant described below.
- --------------------------------------------------------------------------------

The notes are, to the extent set forth in the indenture, subordinate in
right of payment to the prior payment in full of all Senior Debt. Upon any
payment or distribution of assets of Citadel Broadcasting to creditors upon any
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency or similar
proceedings of Citadel Broadcasting (except in connection with the consolidation
or merger of Citadel Broadcasting or its liquidation or dissolution following
the

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<PAGE> 123

conveyance, transfer or lease of its properties and assets substantially as an
entirety, upon the terms and conditions described under "--Consolidation, Merger
and Sale of Assets"), the holders of Senior Debt will first be entitled to
receive payment in full, in cash or cash equivalents, of all amounts due or to
become due on or in respect of such Senior Debt before the holders of notes are
entitled to receive any payment of principal of (or premium, if any) or interest
on the notes or on account of the purchase or redemption or other acquisition of
notes by Citadel Broadcasting or any Subsidiary of Citadel Broadcasting. In the
event that, notwithstanding the foregoing, the trustee under the indenture or
the holder of any note receives any payment or distribution of assets of Citadel
Broadcasting of any kind or character (excluding equity or subordinated
securities of Citadel Broadcasting provided for in a plan of reorganization or
readjustment that, in the case of subordinated securities, are subordinated in
right of payment to all Senior Debt to at least the same extent as the notes are
so subordinated), before all the Senior Debt is paid in full, then such payment
or distribution will be held in trust for the holders of Senior Debt and will be
required to be paid over or delivered forthwith to the trustee in bankruptcy or
other person making payment or distribution of assets of Citadel Broadcasting
for application to the payment of all Senior Debt remaining unpaid, to the
extent necessary to pay the Senior Debt in full.

Citadel Broadcasting may not make any payments on account of the notes or
on account of the purchase or redemption or other acquisition of notes if a
default in the payment when due of principal of (or premium, if any) or interest
on Specified Senior Debt (as defined below under this "Subordination" heading)
has occurred and is continuing or a default in the payment when due of
commitment, facility or other fees, letter of credit fees or agency fees under
the Credit Facility, or a default in payments when due with respect to letter of
credit reimbursement arrangements with the agent under the Credit Facility has
occurred and is continuing (a "Senior Payment Default"). In addition, if any
default (other than a Senior Payment Default) with respect to any Specified
Senior Debt permitting the holders thereof (or a trustee or agent on behalf
thereof) to accelerate the maturity thereof (a "Senior Nonmonetary Default") has
occurred and is continuing and Citadel Broadcasting and the trustee under the
indenture have received written notice thereof from the agent under the Credit
Facility or from an authorized person on behalf of any holder of Specified
Senior Debt, then Citadel Broadcasting may not make any payments on account of
the notes or on account of the purchase or redemption or other acquisition of
notes for a period (a "blockage period") commencing on the date Citadel
Broadcasting and the trustee under the indenture receive such written notice of
default and ending on the earliest of:

(a) 179 days after such date,

(b) the date, if any, on which the Specified Senior Debt to which such
default relates is discharged or such default is waived or otherwise cured, and

(c) the date, if any, on which such blockage period has been terminated by
written notice to Citadel Broadcasting or the trustee under the indenture from
the agent under the Credit Facility or from the person who gave the written
notice of default.

Any number of additional payment blockage periods may be commenced during
the period commencing on the date Citadel Broadcasting and the trustee under the
indenture receive the written notice of default and ending 179 days after that
date this period; provided, however, that no such additional payment blockage
periods shall extend beyond this period. After the expiration of that period, no
payment blockage period may be commenced until at least 181 consecutive days
shall have elapsed from the last day of the period. No Senior

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Nonmonetary Default that existed or was continuing on the date of the
commencement of any blockage period with respect to the Specified Senior Debt
initiating such blockage period will be, or can be, made the basis for the
commencement of a subsequent blockage period, unless such default has been cured
or waived for a period of not less than 90 consecutive days. In the event that,
notwithstanding the foregoing, Citadel Broadcasting makes any payment to the
trustee under the indenture or the holder of any note prohibited by these
blockage provisions, then such payment will be held in trust for the holders of
Senior Debt and will be required to be paid over and delivered forthwith to the
holders of the Senior Debt remaining unpaid, to the extent necessary to pay in
full all the Senior Debt.

The Subsidiary Notes Guarantees are, to the extent set forth in the
indenture, subordinated in right of payment to the prior payment in full of all
senior debt of the Subsidiary Notes Guarantors, upon terms substantially
comparable to the subordination of the notes to all Senior Debt.

By reason of such subordination, in the event of insolvency, creditors of
Citadel Broadcasting or a Subsidiary Notes Guarantor who are not holders of
Senior Debt or the notes may recover less, ratably, than holders of Senior Debt
and may recover more, ratably, than the holders of the notes.

The subordination provisions described above will cease to be applicable to
the notes and the Subsidiary Notes Guarantees upon any defeasance or covenant
defeasance of the notes as described under "--Defeasance or Covenant Defeasance
of Indenture."

As used in this "Description of the Notes" section, the term Specified
Senior Debt means (a) all Senior Debt under the Credit Facility and (b) any
other issue of Senior Debt having a principal amount of at least $10.0 million.

At September 30, 1998, on a pro forma basis, after giving effect to the
transactions described in the "Pro Forma Financial Information" section, the
notes:

-- would have been subordinate to $36.8 million of senior debt, and

-- would have ranked equally with the $101.0 million principal amount of
Citadel Broadcasting's 10-1/4% notes.

Citadel Broadcasting may from time to time hereafter incur additional Debt
constituting Senior Debt under the Credit Facility or otherwise, subject to the
"Limitation on Debt" covenant described below.

OPTIONAL REDEMPTION
- --------------------------------------------------------------------------------

Summary: At any time on or after November 15, 2003, Citadel Broadcasting
may redeem all or part of the notes at redemption prices that decline over time
until 2006. In addition, at any time and from time to time prior to November 15,
2001, Citadel Broadcasting may redeem notes with the proceeds of one or more
Public Equity Offerings at a redemption price equal to 109.25% of the principal
amount thereof plus accrued interest to the date of redemption, provided that at
least 75% of the aggregate principal amount of the notes remains outstanding
after giving effect to any such redemption.
- --------------------------------------------------------------------------------

Citadel Broadcasting may, at its election, redeem the notes (subject to
contractual and other restrictions with respect thereto and to the legal
availability of funds therefore), as a whole or from time to time in part, at
any time on or after November 15, 2003 on not less
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than 30 nor more than 60 days' prior notice, at the redemption prices (expressed
as percentages of the principal amount thereof) set forth below, together with
accrued and unpaid interest, if any, to the redemption date, if redeemed during
the 12-month period beginning on November 15 of the years indicated below
(subject to the right of holders of record on the relevant record date to
receive interest due on an interest payment date):

<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- -----------
<S> <C>
2003................................... 104.625%
2004................................... 103.083
2005................................... 101.541
2006................................... 100.000
</TABLE>

In addition, at any time and from time to time prior to November 15, 2001,
Citadel Broadcasting may at its option redeem notes with the net proceeds of one
or more Public Equity Offerings at a redemption price equal to 109.25% of the
principal amount thereof, together with accrued and unpaid interest, if any, to
the redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on an interest payment date); provided that,
immediately after giving effect to any such redemption, at least 75% of the
aggregate principal amount of the notes remains outstanding. Citadel
Broadcasting must make any such redemption within 90 days of the related Public
Equity Offering.

If less than all the notes are to be redeemed, the trustee under the
indenture shall select the particular notes to be redeemed not more than 60 days
prior to the redemption date by such method as the trustee under the indenture
deems fair and appropriate.

CERTAIN DEFINITIONS

Set forth below is a summary of certain of the defined terms used in the
indenture. Reference is made to the full definition of all such terms as well as
any other capitalized terms used in this "Description of the Notes" section for
which no definition is provided.

"Acquired Debt" means Debt of a person (a) existing at the time such person
is merged with or into Citadel Broadcasting or becomes a Subsidiary, (b) assumed
in connection with the acquisition of assets from such person or (c) secured by
a Lien encumbering assets acquired from such person.

"Affiliate" means, with respect to any specified person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control," when used with respect to any specified person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other
disposition (including, without limitation, by way of merger, consolidation or
sale and leaseback transaction) (collectively, a "transfer") by Citadel
Broadcasting or a Restricted Subsidiary, directly or indirectly, in one or a
series of related transactions, to any person other than Citadel Broadcasting or
a Restricted Subsidiary of:

(a) any Capital Stock of any of its Restricted Subsidiaries,

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(b) all or substantially all of the properties and assets of Citadel
Broadcasting and its Restricted Subsidiaries representing a division or line of
business, or

(c) any other properties or assets of Citadel Broadcasting or any of its
Restricted Subsidiaries, other than in the ordinary course of business.

For the purposes of this definition, the term "Asset Sale" does not include
any transfer of properties or assets:

(a) that is governed by the provisions of the indenture described under (1)
"--Consolidation, Merger and Sale of Assets" or (2) the "Limitation on Asset
Swaps" covenant,

(b) between or among Citadel Broadcasting and any of its Restricted
Subsidiaries pursuant to transactions that do not violate any other provision of
the indenture,

(d) representing obsolete or permanently retired equipment,

(e) the gross proceeds of which (exclusive of indemnities) do not exceed
$100,000 for any particular item or $500,000 in the aggregate for any fiscal
year, or

(f) having a value of up to $500,000, including cash, to a joint venture in
which Citadel Broadcasting or a Restricted Subsidiary has an equity interest,
which joint venture is engaged in the Internet service provider business.

"Asset Swap" means the execution of one or more definitive agreements,
subject only to FCC approval, if applicable, and other customary closing
conditions, which Citadel Broadcasting in good faith believes will be satisfied,
for a substantially concurrent purchase and sale, or exchange, or "deferred
exchange" (for no more than 180 days) under section 1031(a)(3) of the Internal
Revenue Code of 1986, as amended, of assets used in the broadcast or related
businesses between Citadel Broadcasting or any of its Restricted Subsidiaries
and one or more other persons or groups of affiliated persons; provided that any
amendment to or waiver of any closing conditions that individually or in the
aggregate are material to the Asset Swap will be deemed to be a new Asset Swap.

"Banks" means the banks and other financial institutions that from time to
time are lenders under the Credit Facility.

"Capital Stock" of any person means any and all shares, interests,
partnership interests, participations, rights in or other equivalents (however
designated) of such person's equity (however designated).

"Capitalized Lease Obligation" means, with respect to any person, an
obligation incurred or assumed under or in connection with any capital lease of
real or personal property that, in accordance with GAAP, has been recorded as a
capitalized lease on the balance sheet of such person.

"Change of Control" means the occurrence of any of the following events:

(a) Any person or group (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), other than Lawrence R. Wilson, Scott E. Smith, John E. von
Schlegell, Baker, Fentress & Company, ABRY Broadcast Partners II, L.P., ABRY
Citadel Investment Partners, L.P., The Endeavour Capital Fund Limited
Partnership and any trustee, in its

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capacity as trustee under the Amended and Restated Voting Trust Agreement dated
October 15, 1997 ("Permitted Holders") or Citadel Communications, is or becomes
the beneficial owner, directly or indirectly, of more than a majority of the
voting power of all classes of Voting Stock of Citadel Broadcasting. The term
beneficial ownership, as used in the prior sentence, has the meaning given to
that term in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
will be deemed to have beneficial ownership of all securities that such person
has the right to acquire, whether such right is exercisable immediately or only
after the passage of time;

(b) During any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of Citadel
Broadcasting (together with any new directors whose election to such Board of
Directors, or whose nomination for election by the stockholders of Citadel
Broadcasting, was approved by a vote of at least 66-2/3% of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors of Citadel
Broadcasting then in office; or

"Consolidated Adjusted Net Income" means, for any period, the net income
(or net loss) of Citadel Broadcasting and its Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP, adjusted
to the extent included in calculating such net income or loss by excluding:

(a) any net after-tax extraordinary gains or losses (less all fees and
expenses relating thereto),

(b) any net after-tax gains or losses (less all fees and expenses relating
thereto) attributable to Asset Sales,

(c) the portion of net income (or loss) of any person (other than Citadel
Broadcasting or a Restricted Subsidiary), including Unrestricted Subsidiaries,
in which Citadel Broadcasting or any of its Restricted Subsidiaries has an
ownership interest, except to the extent of the amount of dividends or other
distributions actually paid to Citadel Broadcasting or any of its Restricted
Subsidiaries in cash during such period,

(d) the net income (or loss) of any person combined with Citadel
Broadcasting or any of its Restricted Subsidiaries on a pooling of interests
basis attributable to any period prior to the date of combination, and

(e) the net income (but not the net loss) of any Restricted Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
by such Restricted Subsidiary is at the date of determination restricted,
directly or indirectly, except to the extent that such net income could be paid
to Citadel Broadcasting or a Restricted Subsidiary thereof;

provided that, if any Restricted Subsidiary is not a Wholly Owned Restricted
Subsidiary, Consolidated Adjusted Net Income will be reduced (to the extent not
otherwise reduced in accordance with GAAP) by an amount equal to:

(A) the amount of the Consolidated Adjusted Net Income otherwise
attributable to such Restricted Subsidiary, multiplied by

(B) the quotient of:

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(1) the number of shares of outstanding common stock of such
Restricted Subsidiary not owned on the last day of such period by Citadel
Broadcasting or any of its Restricted Subsidiaries, divided by

(2) the total number of shares of outstanding common stock of such
Restricted Subsidiary on the last day of such period.

"Consolidated Cash Flow" means, for any period, the sum of, without
duplication, Consolidated Adjusted Net Income for such period, plus (or, in the
case of clause (d) below, plus or minus) the following items to the extent
included in computing Consolidated Adjusted Net Income for such period:

(a) the aggregate interest expense and preferred stock dividends of Citadel
Broadcasting and its Restricted Subsidiaries for such period, plus

(b) the provision for federal, state, local and foreign income taxes of
Citadel Broadcasting and its Restricted Subsidiaries for such period, plus

(c) the aggregate depreciation and amortization expense of Citadel
Broadcasting and any of its Restricted Subsidiaries for such period, plus

(d) any other non-cash charges for such period, and minus non-cash credits
for such period, other than non-cash charges or credits resulting from changes
in prepaid assets or accrued liabilities in the ordinary course of business;

provided that income tax expense, interest expense and preferred stock
dividends, depreciation and amortization expense, and non-cash charges and
credits of a Restricted Subsidiary will be included in Consolidated Cash Flow
only to the extent (and in the same proportion) that the net income of such
Restricted Subsidiary was included in calculating Consolidated Adjusted Net
Income for such period. Solely for purposes of determining whether Citadel
Broadcasting could incur Debt pursuant to the first paragraph of the description
of the "Limitation on Debt" covenant, if Citadel Broadcasting is permitted to
give pro forma effect to an In-Market Acquisition of a radio station pursuant to
clause (a) (3) of the description of such covenant, such calculation may also
give pro forma effect to projected quantifiable improvements in operating
results of such radio station due to cost reductions calculated in good faith by
Citadel Broadcasting and certified by an officers' certificate filed with the
trustee under the indenture. As used in the preceding sentence, the term
"In-Market Acquisition" means the acquisition of a radio station or group of
radio stations serving a metropolitan statistical area in which Citadel
Broadcasting or its Subsidiaries has owned, or has operated under a local
marketing agreement, one or more radio stations for at least the preceding six
months.

"Consolidated Cash Flow Ratio" means, at any date, the ratio of (a) the
aggregate amount of Debt of Citadel Broadcasting and its Restricted Subsidiaries
on a consolidated basis as of the end of the period constituting the immediately
preceding four fiscal quarters for which internal financial statements of
Citadel Broadcasting are available to (b) the aggregate amount of Consolidated
Cash Flow for such period.

"Consolidated Fixed Charges" means, for any period, without duplication,
the sum of:

(a) the amount which, in conformity with GAAP, would be set forth opposite
the caption "interest expense" (or any like caption) on a consolidated statement
of operations of Citadel Broadcasting and its Restricted Subsidiaries for such
period, including, without limitation:

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(1) amortization of debt discount,

(2) the net cost of interest rate contracts (including amortization of
discounts),

(3) the interest portion of any deferred payment obligation,

(4) amortization of debt issuance costs,

(5) the interest component of Capitalized Lease Obligations of Citadel
Broadcasting and any of its Restricted Subsidiaries, and

(6) the portion of any rental obligation of Citadel Broadcasting and
any of its Restricted Subsidiaries in respect of any sale and leaseback
transaction allocable during such period to interest expense (determined as
if it were treated as a Capitalized Lease Obligation), plus

(b) all interest on any Debt of any other person guaranteed by Citadel
Broadcasting or any of its Restricted Subsidiaries;

provided, however, that Consolidated Fixed Charges will not include any gain or
loss from extinguishment of debt, including any write-off of debt issuance
costs.

"Credit Facility" means the loan agreement dated October 9, 1996 as it has
been amended, among Citadel Broadcasting, the Banks and the agent under the
Credit Facility, and as such agreement may be amended, restated, supplemented,
replaced or refinanced or otherwise modified from time to time.

"Debt" means (without duplication), with respect to any person, whether
recourse is to all or a portion of the assets of such person and whether or not
contingent:

(a) every obligation of such person for money borrowed,

(b) every obligation of such person evidenced by bonds, debentures, notes
or other similar instruments,

(c) every reimbursement obligation of such person with respect to letters
of credit, bankers' acceptances or similar facilities issued for the account of
such person,

(d) every obligation of such person issued or assumed as the deferred
purchase price of property or services,

(e) every Capitalized Lease Obligation of such person,

(f) all Disqualified Stock of such person valued at its maximum fixed
repurchase price, plus accumulated and unpaid dividends,

(g) all Hedging Obligations of such person, and

(h) every obligation of the types referred to in clauses (a) through (g) of
another person and all dividends of another person (1) the payment of which, in
either case, such person has guaranteed or (2) which is secured by any Lien on
any property or asset of such person, the amount of such Debt being deemed to be
the lesser of the actual amount of the guarantee or the value of such property
or asset subject to such Lien, as the case may be, and the amount of the Debt so
guaranteed or secured, as the case may be. For purposes of this definition, the
"maximum fixed repurchase price" of any Disqualified Stock that does not have a
fixed repurchase price will be calculated in accordance with the terms of such
Disqualified Stock as if such Disqualified Stock were repurchased on any date on
which Debt is required to be determined pursuant to the indenture, and if such
price is based upon, or measured by, the
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fair market value of such Disqualified Stock, such fair market value will be
determined reasonably and in good faith by the board of directors of the issuer
of such Disqualified Stock. Notwithstanding the foregoing, trade accounts
payable and accrued liabilities arising in the ordinary course of business, any
liability for federal, state or local taxes or other taxes owed by such person
and the exchangeable preferred stock will not be considered Debt for purposes of
this definition. The amount outstanding at any time of any Debt issued with
original issue discount is the aggregate principal amount at maturity of such
Debt, less the remaining unamortized portion of the original issue discount of
such Debt at such time, as determined in accordance with GAAP.

"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.

"Disinterested Director" means, with respect to any transaction or series
of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors, to make a finding or otherwise
take action under the indenture, a member of the Board of Directors who does not
have any material direct or indirect financial interest in or with respect to
such transaction or series of transactions.

"Disqualified Stock" means any class or series of Capital Stock that,
either by its terms or by the terms of any security into which it is convertible
or exchangeable or by contract or otherwise:

(a) is, or upon the happening of an event or passage of time would be,
required to be redeemed prior to one year after the final Stated Maturity of the
notes,

(b) is redeemable at the option of the holder thereof at any time prior to
one year after such final Stated Maturity, or

(c) at the option of the holder thereof, is convertible into or
exchangeable for debt securities at any time prior to one year after such final
Stated Maturity;

provided that any Capital Stock that would not constitute Disqualified Stock but
for provisions thereof giving holders thereof the right to cause the issuer
thereof to repurchase or redeem such Capital Stock upon the occurrence of an
asset sale or change of control occurring prior to one year after the Stated
Maturity of the notes will not constitute Disqualified Stock if the asset sale
or change of control provisions applicable to such Capital Stock are no more
favorable to the holders of such Capital Stock than the provisions contained in
the "Limitation on Certain Asset Sales" and "Purchase of Notes upon a Change of
Control" covenants described below and such Capital Stock specifically provides
that the issuer will not repurchase or redeem any such Capital Stock pursuant to
such provision prior to Citadel Broadcasting's repurchase of such notes as are
required to be repurchased pursuant to the "Limitation on Certain Asset Sales"
and "Purchase of Notes upon a Change of Control" covenants described below.

"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, that
were in effect on November 19, 1998.

"Guarantee" means, as applied to any obligation, (a) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any

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way the payment or performance (or payment of damages in the event of
non-performance) of all or any part of such obligation, including, without
limitation, the payment of amounts drawn down under letters of credit.

"Hedging Obligations" means the obligations of any person under (a)
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements and (b) other agreements or arrangements designed to protect
such person against fluctuations in interest rates or the value of foreign
currencies.

"Investment" (in any person) means:

(a) directly or indirectly, any advance, loan or other extension of credit
(including, without limitation, by way of guarantee or similar arrangement) or
capital contribution to any person, the purchase or other acquisition of any
stock, bonds, notes, debentures or other securities issued by such person or the
acquisition (by purchase or otherwise) of all or substantially all of the
business or assets of such person or the making of any investment in such
person,

(b) the designation of any Restricted Subsidiary as an Unrestricted
Subsidiary, and

(c) the transfer of any assets or properties from Citadel Broadcasting or a
Restricted Subsidiary to any Unrestricted Subsidiary, other than the transfer of
assets or properties made in the ordinary course of business.

Investments will exclude extensions of trade credit on commercially reasonable
terms in accordance with normal trade practices.

"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
privilege, security interest, hypothecation, assignment for security, claim,
preference, priority or other encumbrance upon or with respect to any property
of any kind, real or personal, movable or immovable, now owned or hereafter
acquired. A person will be deemed to own subject to a Lien any property that
such person has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement.

"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or cash equivalents, including payments in respect
of deferred payment obligations when received in the form of, or stock or other
assets when disposed of for, cash or cash equivalents (except to the extent that
such obligations are financed or sold with recourse to Citadel Broadcasting or
any of its Restricted Subsidiaries), net of:

(a) brokerage commissions and other fees and expenses (including fees and
expenses of legal counsel and investment banks) related to such Asset Sale,

(b) provisions for all taxes payable as a result of such Asset Sale,

(c) payments made to retire Debt where payment of such Debt is secured by
the assets that are the subject of such Asset Sale,

(d) amounts required to be paid to any person (other than Citadel
Broadcasting or any of its Restricted Subsidiaries) owning a beneficial interest
in the assets that are subject to the Asset Sale, and

(e) appropriate amounts to be provided by Citadel Broadcasting or any of
its Restricted Subsidiaries, as the case may be, as a reserve required in
accordance with GAAP against any

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liabilities associated with such Asset Sale and retained by the seller after
such Asset Sale, including pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale.

"Pari Passu Debt" means Debt of Citadel Broadcasting that ranks pari passu
in right of payment with the Notes.

"Permitted Investments" means any of the following:

(a) Investments in:

(1) securities with a maturity of one year or less issued or directly
and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof),

(2) certificates of deposit, time deposits, overnight bank deposits or
bankers' acceptances with a maturity of 270 days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus of not less than $500.0 million and

(3) commercial paper with a maturity of 270 days or less issued by a
corporation that is not an Affiliate of Citadel Broadcasting and is
organized under the laws of any state of the United States or the District
of Columbia and having the highest rating obtainable from Moody's Investors
Service, Inc. or Standard & Poor's Ratings Services.

(b) Investments by Citadel Broadcasting or any of its Restricted
Subsidiaries in another person, if as a result of such Investment (1) such other
person becomes a Restricted Subsidiary that is a Subsidiary Notes Guarantor or
(2) such other person is merged or consolidated with or into, or transfers or
conveys all or substantially all of its assets to, Citadel Broadcasting or a
Restricted Subsidiary that is a Subsidiary Notes Guarantor.

(c) Investments by Citadel Broadcasting or any of its Restricted
Subsidiaries in a Subsidiary Notes Guarantor and Investments by any Restricted
Subsidiary in Citadel Broadcasting.

(d) Investments in assets owned or used in the ordinary course of business.

(e) Investments in existence on November 19, 1998.

(f) Promissory notes received as a result of Asset Sales permitted under
the "Limitation on Certain Asset Sales" covenant.

(g) Direct or indirect loans to employees, or to a trustee for the benefit
of such employees, of Citadel Broadcasting or any of its Restricted Subsidiaries
in an aggregate amount outstanding at any time not exceeding $1.0 million.

(h) Investments by Citadel Broadcasting or any of its Restricted
Subsidiaries in a joint venture that is engaged in the internet service provider
business in an aggregate amount outstanding at any time not exceeding $0.5
million.

(i) Other Investments that do not exceed $2.0 million at any one time
outstanding.

"Public Equity Offering" means an underwritten public offering of Qualified
Equity Interests of either (a) Citadel Broadcasting or (b) Citadel
Communications the net proceeds from which (after deducting any underwriting
discounts and commissions) are used by
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Citadel Communications to purchase Qualified Equity Interests of Citadel
Broadcasting; provided that, in either case, such net proceeds exceed $10.0
million.

"Qualified Equity Interest" means any Qualified Stock and all warrants,
options or other rights to acquire Qualified Stock (but excluding any debt
security that is convertible into or exchangeable for Capital Stock).

"Qualified Stock" of any person means any and all Capital Stock of such
person, other than Disqualified Stock.

"Restricted Subsidiary" means any Subsidiary other than an Unrestricted
Subsidiary.

"Senior Debt" means the principal of and premium, if any, and interest on
(including interest accruing after the filing of a petition initiating any
proceeding pursuant to any bankruptcy law, whether or not allowed) and other
amounts due on or in connection with any Debt of Citadel Broadcasting (other
than the notes or Pari Passu Debt), whether outstanding on November 19, 1998 or
thereafter incurred, unless, in the case of any particular Debt, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Debt will be subordinate in right of payment to any
Debt or other general unsecured obligations of Citadel Broadcasting. Without
limiting the generality of the foregoing, "Senior Debt" includes the principal
of and premium, if any, fees and interest (including interest accruing after the
occurrence of an event of default or after the filing of a petition initiating
any proceeding pursuant to any bankruptcy law, whether or not allowed) on all
obligations of every nature of Citadel Broadcasting from time to time owed to
the Banks under the Credit Facility. Notwithstanding the foregoing, "Senior
Debt" will not include:

(a) Debt that is Disqualified Stock,

(b) Debt consisting of trade payables,

(c) Debt of Citadel Broadcasting to a Subsidiary or any other Affiliate of
Citadel Broadcasting or any of such Affiliate's Subsidiaries, and

(d) that portion of any Debt that, at the time of the incurrence, is
incurred by Citadel Broadcasting in violation of the indenture other than any
Debt incurred under the Credit Facility not in excess of $150.0 million (less
any amounts applied to the permanent reduction of such Debt pursuant to the
"Limitation on Certain Asset Sales" covenant under the indenture) if Citadel
Broadcasting has certified to the agent under the Credit Facility, at the time
such Debt is incurred, that Citadel Broadcasting is permitted to incur such Debt
under the indenture.

"Significant Subsidiary" means any Restricted Subsidiary of Citadel
Broadcasting that, together with its Subsidiaries:

(a) for the most recent fiscal year of Citadel Broadcasting, accounted for
more than 10% of the consolidated net sales of Citadel Broadcasting and its
Restricted Subsidiaries,

(b) as of the end of such fiscal year, was the owner of more than 10% of
the consolidated assets of Citadel Broadcasting and its Restricted Subsidiaries,
in the case of either (a) or (b), as set forth on the most recently available
consolidated financial statements of Citadel Broadcasting for such fiscal year,

(c) was organized or acquired after the beginning of such fiscal year and
would have been a Significant Subsidiary if it had been owned during the entire
fiscal year, or

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(d) holds one or more licenses material to Citadel Broadcasting's business.

"Stated Maturity" means, when used with respect to any note or any
installment of interest thereon, the date specified in such note as the fixed
date on which the principal of such note or such installment of interest is due
and payable, and, when used with respect to any other Debt, means the date
specified in the instrument governing such Debt as the fixed date on which the
principal of such Debt or any installment of interest thereon is due and
payable.

"Subordinated Debt" means Debt of Citadel Broadcasting that is subordinated
in right of payment to the notes.

"Subsidiary" means any person a majority of the equity ownership or Voting
Stock of which is at the time owned, directly or indirectly, by Citadel
Broadcasting and/or one or more other Subsidiaries of Citadel Broadcasting.

"Subsidiary Notes Guarantee" means a guarantee of the notes by a Restricted
Subsidiary in accordance with the provisions of the indenture.

"Subsidiary Notes Guarantor" means Citadel License, Inc. and each other
Restricted Subsidiary that issues a Subsidiary Notes Guarantee as described
under the "Subsidiary Notes Guarantees" covenant.

"Unrestricted Subsidiary" means (a) any Subsidiary that is designated by
the Board of Directors of Citadel Broadcasting as an Unrestricted Subsidiary in
accordance with the "Unrestricted Subsidiaries" covenant and (b) any Subsidiary
of an Unrestricted Subsidiary.

"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any person (irrespective of whether or not, at the time, stock of
any other class or classes has, or might have, voting power by reason of the
happening of any contingency).

"Weighted Average Life" means, as of the date of determination with respect
to any Debt or Disqualified Stock, the quotient obtained by dividing (a) the sum
of the products of (1) the number of years from the date of determination to the
date or dates of each successive scheduled principal or liquidation value
payment of such Debt or Disqualified Stock, respectively, multiplied by (2) the
amount of each such principal or liquidation value payment by (b) the sum of all
such principal or liquidation value payments.

"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary, all
of the outstanding voting securities (other than directors' qualifying shares or
an immaterial number of shares required to be owned by other persons pursuant to
applicable law) of which are owned, directly or indirectly, by Citadel
Broadcasting.

CERTAIN COVENANTS
- --------------------------------------------------------------------------------

Summary: In the indenture, Citadel Broadcasting agreed to certain
restrictions that limit its and its Subsidiaries' ability, among other things,
to:

-- incur additional indebtedness or issue Disqualified Capital Stock;

-- pay dividends, acquire shares of Capital Stock, make payments on
Subordinated Debt or make investments;

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-- sell or exchange assets;

-- enter into transactions with Affiliates;

-- create liens; and

-- effect mergers.

In addition, if a Change of Control occurs, each holder of notes will have
the right to require Citadel Broadcasting to repurchase all or part of such
holder's notes at a price equal to 101% of the principal amount of those notes
plus accrued and unpaid dividends to the date of purchase.
- --------------------------------------------------------------------------------

The indenture contains, among others, the following covenants:

LIMITATION ON DEBT. (a) Citadel Broadcasting will not, and will not permit
any of its Restricted Subsidiaries to, create, issue, assume, guarantee or in
any manner become directly or indirectly liable for the payment of, or otherwise
incur (collectively, "incur"), any Debt (including Acquired Debt and the
issuance of Disqualified Stock), except that Citadel Broadcasting or a
Subsidiary Notes Guarantor may incur Debt or issue Disqualified Stock if, at the
time of such event, the Consolidated Cash Flow Ratio would have been less than
7.0 to 1.0.

In making the foregoing calculation, pro forma effect will be given to:

(1) the incurrence of such Debt and (if applicable) the application of the
net proceeds therefrom, including to refinance other Debt, as if such Debt had
been incurred and the application of proceeds therefrom occurred on the first
day of the four-fiscal quarter period used to calculate the Consolidated Cash
Flow Ratio,

(2) the incurrence, repayment or retirement of any other Debt by Citadel
Broadcasting or any of its Restricted Subsidiaries since the first day of such
four-quarter period as if such Debt was incurred, repaid or retired at the
beginning of such four-quarter period, and

(3) the acquisition (whether by purchase, merger or otherwise) or
disposition (whether by sale, merger or otherwise) of any company, entity or
business acquired or disposed of by Citadel Broadcasting or any of its
Restricted Subsidiaries, as the case may be, since the first day of such
four-quarter period, as if such acquisition or disposition occurred at the
beginning of such four-quarter period.

In making a computation under the foregoing clause (1) or (2), the amount of
Debt under a revolving credit facility will be computed based upon the average
daily balance of such Debt during such four-quarter period.

(b) Notwithstanding the foregoing, Citadel Broadcasting may, and may, to
the extent expressly permitted below, permit any of its Restricted Subsidiaries
to, incur any of the following permitted Debt:

(1) Debt of Citadel Broadcasting or any Subsidiary Notes Guarantor under
the Credit Facility (including guarantees thereof by the Subsidiaries) in an
aggregate principal amount at any one time outstanding not to exceed $110.0
million less any amounts applied to the permanent reduction of such Debt
pursuant to the "Limitation on Certain Asset Sales" covenant.

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(2) Debt of Citadel Broadcasting or any of its Restricted Subsidiaries
outstanding on November 19, 1998, other than Debt described under clause (1)
above.

(3) Debt owed by Citadel Broadcasting to any of its Restricted Subsidiaries
or owed by any Subsidiary to Citadel Broadcasting or a Restricted Subsidiary
(provided that such Debt is Subordinated Debt and is held by Citadel
Broadcasting or such Restricted Subsidiary) or owed to Citadel Broadcasting or a
Subsidiary Notes Guarantor by a Restricted Subsidiary that is not a Subsidiary
Notes Guarantor, provided the incurrence of such Debt did not violate the
"Limitation on Restricted Payments" covenant.

(4) Debt represented by the notes (other than any additional senior
subordinated Notes that may be issued under the indenture) and the Subsidiary
Notes Guarantees.

(5) Hedging Obligations of Citadel Broadcasting or any of its Restricted
Subsidiaries incurred in the ordinary course of business.

(6) Capitalized Lease Obligations of Citadel Broadcasting or any of its
Restricted Subsidiaries in an aggregate amount not exceeding $3.0 million at any
one time outstanding.

(7) Debt under purchase money mortgages or secured by purchase money
security interests so long as (x) such Debt is not secured by any property or
assets of Citadel Broadcasting or any of its Restricted Subsidiaries other than
the property or assets so acquired and (y) such Debt is created within 60 days
of the acquisition of the related property; provided that the aggregate
principal amount of Debt under this clause (7) does not exceed $2.0 million at
any one time outstanding.

(8) Debt of Citadel Broadcasting or any Subsidiary Notes Guarantor, not
permitted by any other clause of this definition, in an aggregate principal
amount not to exceed $5.0 million at any one time outstanding.

(9) Debt of Citadel Broadcasting or any of its Restricted Subsidiaries
consisting of guarantees, indemnities or obligations in respect of purchase
price adjustments in connection with the acquisition or disposition of assets,
including, without limitation, shares of Capital Stock.

(10) Acquired Debt of a person, other than Debt incurred in connection
with, or in contemplation of, such person becoming a Restricted Subsidiary or
the acquisition of assets from such person, as the case may be, provided that
Citadel Broadcasting on a pro forma basis could incur $1.00 of additional Debt
(other than permitted Debt) pursuant to the first paragraph of this covenant.

(11) Any renewals, extensions, substitutions, refinancings or replacements
(each, for purposes of this clause, a refinancing) by Citadel Broadcasting or
any Restricted Subsidiary of any outstanding Debt of Citadel Broadcasting or
such Restricted Subsidiary, other than Debt incurred pursuant to clause (1),
(5), (6), (7), (8) or (9) of this definition, including any successive
refinancings thereof, so long as:

(A) any such new Debt is in a principal amount that does not exceed
the principal amount so refinanced, plus the amount of any premium required
to be paid in connection with such refinancing pursuant to the terms of the
Debt refinanced or the amount of any premium reasonably determined by
Citadel Broadcasting as necessary to accomplish such refinancing, plus the
amount of expenses of Citadel Broadcasting incurred in connection with such
refinancing,

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(B) in the case of any refinancing of Subordinated Debt, such new Debt
is made subordinate to the notes at least to the same extent as the Debt
being refinanced,

(C) in the case of any refinancing of the notes or any Pari Passu
Debt, such Debt is Pari Passu Debt or Subordinated Debt, and

(D) such refinancing Debt does not have a Weighted Average Life less
than the Weighted Average Life of the Debt being refinanced and does not
have a final scheduled maturity earlier than the final scheduled maturity,
or permit redemption at the option of the holder earlier than the earliest
date of redemption at the option of the holder, of the Debt being
refinanced.

LIMITATION ON RESTRICTED PAYMENTS. Citadel Broadcasting will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly, take
any of the following actions:

(a) declare or pay any dividend on, or make any distribution to holders of,
any shares of the Capital Stock of Citadel Broadcasting or any of its Restricted
Subsidiaries, other than:

(1) dividends or distributions payable solely in Qualified Equity
Interests of the issuer of such shares of Capital Stock,

(2) dividends or distributions by a Restricted Subsidiary payable to
Citadel Broadcasting or another Restricted Subsidiary, or

(3) pro rata dividends or distributions on common stock of a
Restricted Subsidiary held by minority stockholders, provided that such
dividends do not in the aggregate exceed the minority stockholders' pro
rata share of such Restricted Subsidiary's net income from the first day of
the fourth quarter of 1998;

(b) purchase, redeem or otherwise acquire or retire for value, directly or
indirectly, any shares of Capital Stock (or any options, warrants or other
rights to acquire shares of Capital Stock) of (1) Citadel Broadcasting or any of
its Unrestricted Subsidiaries or (2) any Restricted Subsidiary that are held by
any Affiliate of Citadel Broadcasting (other than, in either case, any such
Capital Stock owned by Citadel Broadcasting or any of its Restricted
Subsidiaries);

(c) make any principal payment on, or repurchase, redeem, defease or
otherwise acquire or retire for value, prior to any scheduled principal payment,
sinking fund payment or maturity, any Subordinated Debt; and

(d) make any Investment (other than a Permitted Investment) in any person

(such payments or other actions described in (but not excluded from) clauses (a)
through (d) being referred to as restricted payments), unless at the time of,
and immediately after giving effect to, the proposed restricted payment:

(1) no Default or Event of Default has occurred and is continuing,

(2) Citadel Broadcasting could incur at least $1.00 of additional Debt
(other than permitted Debt) pursuant to the first paragraph of the
"Limitation on Debt" covenant, and

(3) the aggregate amount of all restricted payments declared or made
after November 19, 1998 does not exceed the sum of:

(A) the remainder of:

(x) 100% of the aggregate Consolidated Cash Flow for the
period beginning on the first day of the fourth quarter of
1998 and ending on

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the last day of Citadel Broadcasting's most recent fiscal
quarter for which internal financial statements are
available ending prior to the date of such proposed
restricted payment, minus

(y) the product of 1.4 times the sum of:

(1) Consolidated Fixed Charges for the period described
in clause (x) above, and

(2) all dividends or other distributions paid in cash by
Citadel Broadcasting or any of its Restricted
Subsidiaries on any Disqualified Stock of Citadel
Broadcasting or any of its Restricted Subsidiaries
for the period described in clause (x) above; plus

(B) the aggregate net proceeds received by Citadel Broadcasting
after November 19, 1998 (including the fair market value of property
other than cash as determined by Citadel Broadcasting's Board of
Directors, whose good faith determination will be conclusive) from the
issuance or sale (other than to a Subsidiary) of Qualified Equity
Interests of Citadel Broadcasting (excluding from this computation any
net proceeds of a Public Equity Offering received by Citadel
Broadcasting that are used by it to redeem the notes, as discussed
above); plus

(C) the aggregate net proceeds received by Citadel Broadcasting
after November 19, 1998 (including the fair market value of property
other than cash as determined by Citadel Broadcasting's Board of
Directors, whose good faith determination will be conclusive) from the
issuance or sale (other than to a Subsidiary) of debt securities or
Disqualified Stock that have been converted into or exchanged for
Qualified Stock of Citadel Broadcasting, together with the aggregate net
cash proceeds received by Citadel Broadcasting at the time of such
conversion or exchange; plus

(D) without duplication, the Net Cash Proceeds received by Citadel
Broadcasting or a Wholly Owned Restricted Subsidiary upon the sale of
any of its Unrestricted Subsidiaries; plus

(E) $5.0 million.

Notwithstanding the foregoing, Citadel Broadcasting and any of its
Restricted Subsidiaries may take any of the following actions, so long as (with
respect to clauses (f) and (g) below) no Default or Event of Default has
occurred and is continuing or would occur:

(a) The payment of any dividend within 60 days after the date of
declaration thereof, if at the declaration date such payment would not have been
prohibited by the foregoing provision.

(b) The repurchase, redemption or other acquisition or retirement for value
of any shares of Capital Stock of Citadel Broadcasting, in exchange for, or out
of the net cash proceeds of a substantially concurrent issuance and sale (other
than to a Subsidiary) of, Qualified Equity Interests of Citadel Broadcasting.

(c) The purchase, redemption, defeasance or other acquisition or retirement
for value of Subordinated Debt in exchange for, or out of the net cash proceeds
of a substantially concurrent issuance and sale (other than to a Restricted
Subsidiary) of shares of, Qualified Stock of Citadel Broadcasting.

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(d) The purchase, redemption, defeasance or other acquisition or retirement
for value of Subordinated Debt in exchange for, or out of the net cash proceeds
of a substantially concurrent issuance or sale (other than to a Subsidiary) of,
Subordinated Debt, so long as Citadel Broadcasting or a Restricted Subsidiary
would be permitted to refinance such original Subordinated Debt with such new
Subordinated Debt pursuant to clause (11) of the definition of permitted Debt in
the "Limitation on Debt" covenant.

(e) The repurchase of any Subordinated Debt at a purchase price not greater
than 101% of the principal amount of such Subordinated Debt in the event of a
change of control in accordance with provisions similar to the "Purchase of
Notes upon a Change of Control" covenant; provided that, prior to such
repurchase, Citadel Broadcasting has made the Change of Control Offer as
provided in such covenant with respect to the notes and has repurchased all
notes validly tendered for payment in connection with such Change of Control
Offer.

(f) The payment by Citadel Broadcasting to Citadel Communications for the
purpose of the purchase, redemption, acquisition, cancellation or other
retirement for value of shares of Capital Stock of Citadel Communications,
options on any such shares or related stock appreciation rights or similar
securities held by officers or employees or former officers or employees (or
their estates or beneficiaries under their estates) or by any employee benefit
plan, upon death, disability, retirement or termination of employment or
pursuant to the terms of any employee benefit plan or any other agreement under
which such shares of stock or related rights were issued; provided that the
aggregate cash consideration paid for such purchase, redemption, acquisition,
cancellation or other retirement of such shares of Capital Stock after November
19, 1998 does not exceed $1.0 million in any fiscal year.

(g) Loans or advances to officers, directors and employees of Citadel
Communications, Citadel Broadcasting or any of its Restricted Subsidiaries made
in the ordinary course of business after November 19, 1998 in an aggregate
principal amount not to exceed $1.0 million at any one time outstanding.

(h) Payments to or on behalf of Citadel Communications to pay its operating
and administrative expenses attributable to Citadel Broadcasting including,
without limitation, legal and audit expenses, directors' fees, fees payable in
respect of the trustee and back-up trustees under the Amended and Restated
Voting Trust Agreement dated October 15, 1997, and Commission compliance
expenses, in an amount not to exceed the greater of $1.0 million per fiscal year
and 1% of the net revenues of Citadel Broadcasting for the preceding fiscal
year.

The payments described in clauses (b), (c), (e), (f) and (g) of this paragraph
will be restricted payments that will be permitted to be taken in accordance
with this paragraph but will reduce the amount that would otherwise be available
for restricted payments under the foregoing clause (3), and the payments
described in clauses (a), (d) and (h) of this paragraph will be restricted
payments that will be permitted to be taken in accordance with this paragraph
and will not reduce the amount that would otherwise be available for restricted
payments under the foregoing clause (3).

For the purpose of making any calculations under the indenture:

(a) if a Restricted Subsidiary is designated an Unrestricted Subsidiary,
Citadel Broadcasting will be deemed to have made an Investment in an amount
equal to the fair market value of the net assets of such Restricted Subsidiary
at the time of such designation

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as determined by the Board of Directors of Citadel Broadcasting, whose good
faith determination will be conclusive,

(b) any property transferred to or from an Unrestricted Subsidiary will be
valued at fair market value at the time of such transfer, as determined by the
Board of Directors of Citadel Broadcasting, whose good faith determination will
be conclusive, and

(c) subject to the foregoing, the amount of any restricted payment, if
other than cash, will be determined by the Board of Directors of Citadel
Broadcasting, whose good faith determination will be conclusive.

If the aggregate amount of all restricted payments calculated under the
foregoing provision includes an Investment in an Unrestricted Subsidiary or
other person that thereafter becomes a Restricted Subsidiary, such Investment
will no longer be counted as a restricted payment for purposes of calculating
the aggregate amount of restricted payments.

If an Investment resulted in the making of a restricted payment, the
aggregate amount of all restricted payments calculated under the foregoing
provision will be reduced by the amount of any net reduction in such Investment
(resulting from the payment of interest or dividends, loan repayment, transfer
of assets or otherwise), to the extent such net reduction is not included in
Consolidated Adjusted Net Income; provided that the total amount by which the
aggregate amount of all restricted payments may be reduced may not exceed the
lesser of (x) the cash proceeds received by Citadel Broadcasting and any of its
Restricted Subsidiaries in connection with such net reduction and (y) the
initial amount of such Investment.

In computing Consolidated Adjusted Net Income for purposes of the foregoing
clause (3)(A), (1) Citadel Broadcasting may use audited financial statements for
the portions of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based on the books and records of Citadel
Broadcasting for the remaining portion of such period and (2) Citadel
Broadcasting will be permitted to rely in good faith on the financial statements
and other financial data derived from the books and records of Citadel
Broadcasting that are available on the date of determination. If Citadel
Broadcasting makes a restricted payment that, at the time of the making of such
restricted payment, would in the good faith determination of Citadel
Broadcasting be permitted under the requirements of the indenture, such
restricted payment will be deemed to have been made in compliance with the
indenture notwithstanding any subsequent adjustments made in good faith to
Citadel Broadcasting's financial statements affecting Consolidated Adjusted Net
Income of Citadel Broadcasting for any period.

PURCHASE OF NOTES UPON A CHANGE OF CONTROL. If a Change of Control occurs
at any time, then each holder of notes will have the right to require that
Citadel Broadcasting purchase such holder's notes, in whole or in part in
integral multiples of $1,000, at a purchase price in cash equal to 101% of the
principal amount of such notes, plus accrued and unpaid interest, if any, to the
date of purchase, pursuant to the offer described below (the "Change of Control
Offer") and the other procedures set forth in the indenture.

Within 30 days following any Change of Control, Citadel Broadcasting will
notify the trustee under the indenture thereof and give written notice of such
Change of Control to each holder of notes by first-class mail, postage prepaid,
at its address appearing in the security register, stating, among other things:

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(1) the purchase price and the purchase date, which will be a Business Day
no earlier than 30 days nor later than 60 days from the date such notice is
mailed or such later date as is necessary to comply with requirements under the
Exchange Act. A Business Day is defined under the indenture as each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in the City of New York are authorized or obligated by law or
executive order to close,

(2) that any notes not tendered will continue to accrue interest,

(3) that, unless Citadel Broadcasting defaults in the payment of the
purchase price, any notes accepted for payment pursuant to the Change of Control
Offer will cease to accrue interest after the Change of Control purchase date,
and

(4) certain other procedures that a holder of notes must follow to accept a
Change of Control Offer or to withdraw such acceptance.

If a Change of Control Offer is made, there can be no assurance that
Citadel Broadcasting will have available funds sufficient to pay the purchase
price for all of the notes that might be tendered by holders of the notes
seeking to accept the Change of Control Offer. The Credit Facility prohibits the
purchase of notes by Citadel Broadcasting prior to full repayment of
indebtedness under the Credit Facility and, upon a Change of Control, all
amounts outstanding under the Credit Facility become due and payable. There can
be no assurance that in the event of a Change of Control Citadel Broadcasting
will be able to obtain the necessary consents from the lenders under the Credit
Facility to consummate a Change of Control Offer. The failure of Citadel
Broadcasting to make or consummate the Change of Control Offer or pay the
applicable Change of Control purchase price when due would result in an Event of
Default and would give the trustee under the indenture and the holders of the
notes the rights described under "--Events of Default."

In addition to the obligations of Citadel Broadcasting under the indenture
with respect to the notes in the event of a Change of Control, the Credit
Facility contains a provision designating a change of control as described in
the Credit Facility as an event of default, which would obligate Citadel
Broadcasting to repay amounts outstanding under the Credit Facility upon an
acceleration of the indebtedness outstanding thereunder.

The existence of a holder's right to require Citadel Broadcasting to
purchase such holder's notes upon a Change of Control may deter a third party
from acquiring Citadel Broadcasting in a transaction that constitutes a Change
of Control.

The definition of Change of Control in the indenture is limited in scope.
The provisions of the indenture may not afford holders of notes the right to
require Citadel Broadcasting to repurchase such notes in the event of a highly
leveraged transaction or certain transactions with Citadel Broadcasting's
management or its affiliates, including a reorganization, restructuring, merger
or similar transaction involving Citadel Broadcasting (including, in certain
circumstances, an acquisition of Citadel Broadcasting by management or its
affiliates) that may adversely affect holders of the notes, if such transaction
is not a transaction defined as a Change of Control. See "--Certain Definitions"
above for the definition of Change of Control. A transaction involving Citadel
Broadcasting's management or its affiliates, or a transaction involving a
recapitalization of Citadel Broadcasting, would result in a Change of Control if
it is the type of transaction specified in such definition.

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Citadel Broadcasting will comply with the applicable tender offer rules
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws and regulations in connection with a Change of Control Offer.

Citadel Broadcasting will not, and will not permit any of its Restricted
Subsidiaries to, create any restriction (other than restrictions existing under
Debt as in effect on November 19, 1998 or in refinancings or replacements of
such Debt) that would materially impair the ability of Citadel Broadcasting to
make a Change of Control Offer to purchase the notes or, if such Change of
Control Offer is made, to pay for the notes tendered for purchase.

LIMITATION ON CERTAIN ASSET SALES.

(a) Citadel Broadcasting will not, and will not permit any of its
Restricted Subsidiaries to, engage in any Asset Sale unless:

(1) the consideration received by Citadel Broadcasting or such
Restricted Subsidiary for such Asset Sale is not less than the fair market
value of the assets sold (as determined by the Board of Directors of
Citadel Broadcasting, whose good faith determination will be conclusive)
and

(2) the consideration received by Citadel Broadcasting or the relevant
Restricted Subsidiary in respect of such Asset Sale consists of at least
80%:

(A) cash or cash equivalents and/or

(B) the assumption by the transferee of Debt of Citadel
Broadcasting or a Restricted Subsidiary ranked senior to or pari passu
with the notes and release of Citadel Broadcasting or such Restricted
Subsidiary from all liability on such Debt.

(b) If Citadel Broadcasting or any of its Restricted Subsidiaries engages
in an Asset Sale, Citadel Broadcasting may, at its option, within 12 months
after such Asset Sale,

(1) apply all or a portion of such Net Cash Proceeds to the permanent
reduction of amounts outstanding under the Credit Facility or to the
repayment of other Senior Debt of Citadel Broadcasting or a Subsidiary
Notes Guarantor or

(2) invest (or enter into one or more legally binding agreements to
invest) all or a portion of such Net Cash Proceeds in properties and assets
to replace the properties and assets that were the subject of the Asset
Sale or in properties and assets that will be used in the broadcast
business or businesses reasonably related thereto.

If any such legally binding agreement to invest such Net Cash Proceeds is
terminated, Citadel Broadcasting may, within 90 days of such termination or
within 12 months of such Asset Sale, whichever is later, invest such Net Cash
Proceeds as provided in clause (1) or (2) (without regard to the parenthetical
contained in such clause (2)) above. The amount of such Net Cash Proceeds not so
used as set forth above in this paragraph (b) constitutes excess proceeds.

(c) When the aggregate amount of excess proceeds exceeds $5.0 million,
Citadel Broadcasting will, within 30 days thereafter, make an offer to purchase
from all holders of notes, on a pro rata basis, in accordance with the
procedures set forth in the indenture, the maximum principal amount (expressed
as a multiple of $1,000) of notes that may be purchased with the excess
proceeds, at a purchase price in cash equal to 100% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date such offer to
purchase is consummated. To the extent that the aggregate principal amount of
the notes tendered pursuant to such offer to purchase is less than the excess
proceeds, Citadel Broadcasting may use such deficiency for general corporate
purposes. If the aggregate
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principal amount of the notes validly tendered and not withdrawn by holders
thereof exceeds the excess proceeds, the notes to be purchased will be selected
on a pro rata basis. Upon completion of such offer to purchase, the amount of
excess proceeds will be reset to zero.

Citadel Broadcasting will comply with the requirements of Rule 14e-1 under
the Exchange Act to the extent applicable in connection with the repurchase of
notes pursuant to an offer to purchase notes.

LIMITATION ON ASSET SWAPS. Citadel Broadcasting will not, and will not
permit any of its Restricted Subsidiaries to, engage in any Asset Swap, unless:

(a) at the time of entering into the Asset Swap and immediately after
giving effect to the proposed Asset Swap, no Default or Event of Default has
occurred and is continuing or would occur as a consequence thereof,

(b) Citadel Broadcasting would, at the time of entering into the Asset Swap
and after giving pro forma effect to the proposed Asset Swap, as if such Asset
Swap had occurred at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Debt (other than permitted
Debt) pursuant to the first paragraph of the "Limitation on Debt" covenant,

(c) the respective aggregate fair market values of the assets being
purchased and sold by Citadel Broadcasting or any of its Restricted Subsidiaries
are substantially the same at the time of entering into the Asset Swap (or any
difference in such aggregate fair market values is substantially compensated for
by an equalizing (1) payment of cash, (2) assumption of liabilities or (3)
taking of assets subject to liabilities), and

(d) at the time of the consummation of the first to occur of the
relinquishment or the replacement of assets constituting part of the proposed
Asset Swap, the percentage of any decline in the fair market value of the asset
or assets being acquired by Citadel Broadcasting and its Restricted Subsidiaries
shall not be significantly greater than the percentage of any decline in the
fair market value of the assets being disposed of by Citadel Broadcasting,
calculated from the time the last agreement constituting part of the Asset Swap
was entered into.

LIMITATION ON TRANSACTIONS WITH AFFILIATES. Citadel Broadcasting will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or suffer to exist any transaction with, or for the
benefit of, any Affiliate of Citadel Broadcasting unless (a) such transaction is
on terms that are no less favorable to Citadel Broadcasting or such Restricted
Subsidiary, as the case may be, than those that could have been obtained in an
arm's length transaction with third parties who are not Affiliates and (b)
either (1) with respect to any transaction or series of transactions involving
aggregate payments in excess of $1.0 million, but less than $5.0 million,
Citadel Broadcasting delivers an officers' certificate to the trustee under the
indenture certifying that such transaction or transactions comply with clause
(a) above or (2) with respect to a transaction or series of transactions
involving aggregate payments equal to or greater than $5.0 million, such
transaction or transactions have been approved by the Board of Directors
(including a majority of the Disinterested Directors) of Citadel Broadcasting or
Citadel Broadcasting has obtained a written opinion from a nationally recognized
investment banking firm to the effect that such transaction or transactions are
fair to Citadel Broadcasting or such Restricted Subsidiary from a financial
point of view.

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The foregoing covenant does not restrict any of the following:

(A) Transactions among Citadel Broadcasting and/or any of its Restricted
Subsidiaries.

(B) Citadel Broadcasting from paying reasonable and customary regular
compensation, fees, indemnification and similar arrangements and payments
thereunder to directors of Citadel Broadcasting or any of its Restricted
Subsidiaries who are not employees of Citadel Broadcasting or any of its
Restricted Subsidiaries.

(C) Employment agreements or compensation or employee benefits arrangements
with any officer, director or employee of Citadel Broadcasting or its Restricted
Subsidiaries entered into in the ordinary course of business, including
customary benefits thereunder (it being understood that benefits of the nature
in place as of November 19, 1998 shall be deemed permissible hereunder).

(D) The performance of Citadel Broadcasting's obligations under:

(a) that certain lease agreement effective December 29, 1995 with Wilson
Aviation, L.L.C. relating to the lease of an airplane,

(b) that certain agreement not to compete dated December 31, 1996 with DVS
Management, Inc., and

(c) that certain Voting Trust Agreement dated March 17, 1997 among Citadel
Communications, ABRY Broadcast Partners II, L.P., ABRY Citadel Investment
Partners, L.P. and others and the related letter agreement dated March 17, 1997
among Citadel Communications, ABRY Broadcast Partners II, L.P., ABRY Citadel
Investment Partners, L.P. and others;

provided that any amendments or modifications to the terms of the agreements
listed in clauses (a) through (c) above (1) are no less favorable to Citadel
Broadcasting than those that could have been obtained in an arm's length
transaction with third parties who are not Affiliates and (2) are approved by
the Board of Directors (including a majority of the Disinterested Directors) of
Citadel Broadcasting.

(E) Citadel Broadcasting from making payments to Citadel Communications to
pay its operating and administrative expenses attributable to Citadel
Broadcasting including, without limitation, legal and audit expenses, directors'
fees and Commission compliance expenses, in an amount not to exceed the greater
of $1.0 million per fiscal year and 1% of the net revenues of Citadel
Broadcasting for the preceding fiscal year.

(F) Citadel Broadcasting or a Restricted Subsidiary from transferring up to
$0.5 million of properties and assets, including cash, to a joint venture in
which Citadel Broadcasting or a Restricted Subsidiary has an equity interest and
in which one or more directors or officers of Citadel Broadcasting or Citadel
Communications has an equity interest, which joint venture is engaged in the
internet service provider business.

LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES. Citadel Broadcasting will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any of its Restricted Subsidiaries to:

(a) pay dividends, in cash or otherwise, or make any other distributions on
or in respect of its Capital Stock,

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(b) pay any Debt owed to Citadel Broadcasting or any other Restricted
Subsidiary,

(d) transfer any of its properties or assets to Citadel Broadcasting or any
other Restricted Subsidiary,

except for such encumbrances or restrictions existing under or by reason of any
of the following:

(1) The Credit Facility and any agreement in effect on November 19, 1998
and listed on a schedule attached to the indenture.

(2) Customary non-assignment provisions of any lease governing a leasehold
interest of Citadel Broadcasting or any of its Restricted Subsidiaries.

(3) The refinancing or successive refinancings of Debt referred to in
clause (1) or (4), so long as such encumbrances or restrictions are no less
favorable to Citadel Broadcasting or any of its Restricted Subsidiaries than
those contained in such original agreement.

(4) Any agreement or other instrument of a person acquired by Citadel
Broadcasting or any of its Restricted Subsidiaries in existence at the time of
such acquisition (but not created in contemplation thereof), which encumbrance
or restriction is not applicable to any person, or the properties or assets of
any person, other than the person, or the property or assets of the person, so
acquired.

(5) Any agreement providing for the incurrence of Debt by a Restricted
Subsidiary pursuant to paragraph (b) of the "Limitation on Debt" covenant,
provided that such Restricted Subsidiary becomes a Subsidiary Notes Guarantor.

LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES. Citadel Broadcasting will not sell, and will not permit any of its
Restricted Subsidiaries, directly or indirectly, to issue or sell, any shares of
Capital Stock of a Restricted Subsidiary (including options, warrants, or other
rights to purchase shares of such Capital Stock) except:

(a) to Citadel Broadcasting or a Wholly Owned Restricted Subsidiary,

(b) issuances or sales to foreign nationals of shares of Capital Stock of
foreign Restricted Subsidiaries, to the extent required by applicable law, or
issuances or sales to directors of directors' qualifying shares,

(c) if, immediately after giving effect to such issuance or sale, neither
Citadel Broadcasting nor any Subsidiary owns any shares of Capital Stock of such
Restricted Subsidiary (including options, warrants or other rights to purchase
shares of such Capital Stock), or

(d) if, immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary and any
Investment in such person remaining after giving effect to such issuance or sale
would have been permitted to be made under the "Limitation on Restricted
Payments" covenant if made on the date of such issuance or sale.

In addition, Citadel Broadcasting will not, and will not permit any of its
Restricted Subsidiaries to, sell, transfer or otherwise dispose of any of its
properties or assets to an Unrestricted Subsidiary other than in the ordinary
course of business.

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UNRESTRICTED SUBSIDIARIES. (a) The Board of Directors of Citadel
Broadcasting may designate any Subsidiary (including any newly acquired or newly
formed Subsidiary) to be an Unrestricted Subsidiary so long as:

(1) neither Citadel Broadcasting nor any of its Restricted
Subsidiaries is directly or indirectly liable for any Debt of such
Subsidiary,

(2) no default with respect to any Debt of such Subsidiary would
permit (upon notice, lapse of time or otherwise) any holder of any other
Debt of Citadel Broadcasting or any of its Restricted Subsidiaries to
declare a default on such other Debt or cause the payment thereof to be
accelerated or payable prior to its stated maturity,

(3) any Investment in such Subsidiary made as a result of designating
such Subsidiary an Unrestricted Subsidiary will not violate the provisions
of the "Limitation on Restricted Payments" covenant,

(4) neither Citadel Broadcasting nor any of its Restricted
Subsidiaries has a contract, agreement, arrangement, understanding or
obligation of any kind, whether written or oral, with such Subsidiary other
than those that might be obtained at the time from persons who are not
Affiliates of Citadel Broadcasting, and

(5) neither Citadel Broadcasting nor any of its Restricted
Subsidiaries has any obligation to subscribe for additional shares of
Capital Stock or other equity interest in such Subsidiary, or to maintain
or preserve such Subsidiary's financial condition or to cause such
Subsidiary to achieve certain levels of operating results.

Notwithstanding the foregoing, Citadel Broadcasting may not designate
Citadel License, or any Subsidiary to which any properties or assets (other than
current assets) owned by Citadel Broadcasting or Citadel License on November 19,
1998 have been transferred, as an Unrestricted Subsidiary.

(b) The Board of Directors of Citadel Broadcasting may designate any of its
Unrestricted Subsidiaries as a Restricted Subsidiary; provided that such
designation will be deemed to be an incurrence of Debt by a Restricted
Subsidiary of any outstanding Debt of such Unrestricted Subsidiary and such
designation will only be permitted if (1) such Debt is permitted under the
"Limitation on Debt" covenant and (2) no Default or Event of Default will have
occurred and be continuing following such designation.

LIMITATION ON OTHER SENIOR SUBORDINATED DEBT. Citadel Broadcasting and
each Subsidiary Notes Guarantor will not, directly or indirectly, incur or
otherwise permit to exist any Debt that is subordinate in right of payment to
any Debt of Citadel Broadcasting or such Subsidiary Notes Guarantor, as the case
may be, unless such Debt is also pari passu with the notes or the Subsidiary
Notes Guarantee by such Subsidiary Notes Guarantor, as the case may be, or
subordinate in right of payment to the notes or such Subsidiary Notes Guarantee,
as the case may be, to at least the same extent as the notes or such Subsidiary
Notes Guarantee are subordinate in right of payment to Senior Debt or all senior
debt of the Subsidiary Notes Guarantors, as the case may be, as set forth in the
indenture.

SUBSIDIARY NOTES GUARANTEES. The Subsidiary Notes Guarantors will, jointly
and severally, unconditionally guarantee the due and punctual payment of the
principal of, premium, if any, and interest on the notes on a senior
subordinated basis pursuant to the Subsidiary Notes Guarantees as described
under "--Subordination." The Subsidiary Notes Guarantors may be released from
their obligations under the Subsidiary Notes Guarantees as

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described under "--Defeasance and Covenant Defeasance of the Indenture" and a
Subsidiary Notes Guarantor may be released from its obligations under its
Subsidiary Notes Guarantee as described under "--Guarantees."

Citadel Broadcasting will (a) cause each person that, after November 19,
1998, becomes a Wholly Owned Restricted Subsidiary of Citadel Broadcasting, as
well as each other Restricted Subsidiary that guarantees any other Debt of
Citadel Broadcasting, to execute and deliver a supplemental indenture and
thereby become a Subsidiary Notes Guarantor bound by the Subsidiary Notes
Guarantee of the notes in the form set forth in the indenture (without such
Subsidiary Notes Guarantor being required to execute and deliver its Subsidiary
Notes Guarantee endorsed on the notes) and (b) deliver to the trustee under the
indenture an opinion of counsel, in form and substance reasonably satisfactory
to the trustee under the indenture, that the Subsidiary Notes Guarantee of such
Subsidiary Notes Guarantor is a valid and legally binding obligation of such
Subsidiary Notes Guarantor.

GUARANTEES OF DEBT BY RESTRICTED SUBSIDIARIES. Citadel Broadcasting will
not permit any of its Restricted Subsidiaries that is not a Subsidiary Notes
Guarantor, directly or indirectly, to guarantee, assume or in any other manner
become liable for the payment of any Debt of Citadel Broadcasting or any Debt of
any other Restricted Subsidiary, unless (a) such Restricted Subsidiary
simultaneously executes and delivers a Subsidiary Notes Guarantee and (b) with
respect to any guarantee of Subordinated Debt by a Restricted Subsidiary, any
such guarantee is subordinated to such Restricted Subsidiary's Subsidiary Notes
Guarantee at least to the same extent as such Subordinated Debt is subordinated
to the notes, provided that the foregoing provision will not be applicable to
any guarantee by any such Restricted Subsidiary that existed at the time such
person became a Restricted Subsidiary and was not incurred in connection with,
or in contemplation of, such person becoming a Restricted Subsidiary.

LIMITATION ON LIENS. Citadel Broadcasting will not, and will not permit
any of its Restricted Subsidiaries to, create, incur, affirm or suffer to exist
any Lien of any kind securing any Pari Passu Debt or Subordinated Debt,
including any assumption, guarantee or other liability with respect thereto by
any Restricted Subsidiary, upon any property or assets, including any
intercompany notes, of Citadel Broadcasting or any of its Restricted
Subsidiaries now owned or acquired after November 19, 1998, or any income or
profits therefrom, unless the notes are directly secured equally and ratably
with (or prior to in the case of Subordinated Debt) the obligation or liability
secured by such Lien; provided that the foregoing will not apply to Liens
securing Debt of a person acquired by Citadel Broadcasting or any of its
Restricted Subsidiaries in existence at the time of such acquisition (but not
created in contemplation thereof), which Lien is not applicable to any person,
or the properties or assets of any person, other than the person, or the
property or assets of the person, so acquired.

REPORTS. At all times from and after the earlier of (a) the date of the
commencement of the exchange offer or the effectiveness of a shelf registration
statement relating to the notes and (b) the date 180 days after November 19,
1998, in either case, whether or not Citadel Broadcasting is then required to
file reports with the SEC, Citadel Broadcasting will file with the SEC all such
reports and other information as it would be required to file with the SEC by
Sections 13(a) or 15(d) under the Exchange Act if it were subject thereto.
Citadel Broadcasting will supply the trustee under the indenture and each
holder, or will supply to the trustee under the indenture for forwarding to each
such holder, without cost to such holder, copies of such reports and other
information. In addition, at all times prior to the earlier of the date of the
date of commencement of the exchange offer or the
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effectiveness of a shelf registration relating to the notes and May 18, 1999,
Citadel Broadcasting will, at its cost, deliver to each holder of the notes
quarterly and annual reports substantially equivalent to those that would be
required by the Exchange Act. In addition, at all times prior to the date of
commencement of the exchange offer or the effectiveness of a shelf registration
relating to the notes, upon the request of any holder or any prospective
purchaser of the notes designated by a holder, Citadel Broadcasting will supply
to such holder or such prospective purchaser the information required under Rule
144A under the Securities Act.

CONSOLIDATION, MERGER AND SALE OF ASSETS
- --------------------------------------------------------------------------------

Summary: The indenture restricts Citadel Broadcasting's ability to, among
other things:

-- consolidate,

-- merge, or

-- transfer or lease substantially all of its assets.
- --------------------------------------------------------------------------------

Citadel Broadcasting will not consolidate with or merge with or into any
other person or, directly or indirectly, convey, transfer or lease its
properties and assets substantially as an entirety to any person or persons,
unless:

(a) Either (1) Citadel Broadcasting is the surviving corporation or (2) the
person (if other than Citadel Broadcasting) formed by such consolidation or into
which Citadel Broadcasting is merged or the person that acquires by sale,
assignment, transfer, lease or other disposition the properties and assets of
Citadel Broadcasting substantially as an entirety (A) is a corporation,
partnership or trust organized and validly existing under the laws of the United
States, any state thereof or the District of Columbia and (B) expressly assumes,
by a supplemental indenture in form satisfactory to the trustee under the
indenture, all of Citadel Broadcasting's obligations under the indenture and the
notes.

(b) Immediately after giving effect to such transaction and treating any
obligation of Citadel Broadcasting or a Restricted Subsidiary in connection with
or as a result of such transaction as having been incurred at the time of such
transaction, no Default or Event of Default has occurred and is continuing.

(c) Immediately after giving effect to such transaction on a pro forma
basis (on the assumption that the transaction occurred at the beginning of the
most recently ended four full fiscal quarter period for which internal financial
statements are available), Citadel Broadcasting (or the surviving entity if
Citadel Broadcasting is not the continuing obligor under the indenture) could
incur at least $1.00 of additional Debt (other than permitted Debt) pursuant to
the first paragraph of the "Limitation on Debt" covenant.

(d) If Citadel Broadcasting is not the continuing obligor under the
indenture, each Subsidiary Notes Guarantor, unless it is the other party to the
transaction described above, has by supplemental indenture confirmed that its
Subsidiary Notes Guarantee applies to the surviving entity's obligations under
the indenture and the notes.

(e) If any of the property or assets of Citadel Broadcasting or any of its
Restricted Subsidiaries would thereupon become subject to any Lien, the
provisions of the "Limitation on Liens" covenant are complied with.

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(f) Citadel Broadcasting delivers, or causes to be delivered, to the
trustee under the indenture, in form and substance reasonably satisfactory to
the trustee under the indenture, an officers' certificate and an opinion of
counsel, each stating that such transaction complies with the requirements of
the indenture.

In the event of any transaction described in and complying with the
conditions listed in the first paragraph of this covenant in which Citadel
Broadcasting is not the continuing obligor under the indenture, the surviving
entity will succeed to, and be substituted for, and may exercise every right and
power of, Citadel Broadcasting under the indenture, and thereafter Citadel
Broadcasting will, except in the case of a lease, be discharged from all its
obligations and covenants under the indenture and notes.

EVENTS OF DEFAULT

Each of the following will be "Events of Default" under the indenture:

(a) Default in the payment of any interest on any note when it becomes due
and payable, and continuance of such default for a period of 30 days.

(b) Default in the payment of the principal of (or premium, if any, on) any
note when due.

(c) Failure to perform or comply with the indenture provisions described
under "--Consolidation, Merger and Sale of Assets."

(d) Default in the performance, or breach, of any covenant or agreement of
Citadel Broadcasting or any Subsidiary Notes Guarantor contained in the
indenture or any Subsidiary Notes Guarantee (other than a default in the
performance, or breach, of a covenant or agreement that is specifically dealt
with elsewhere in the indenture), and continuance of such default or breach for
a period of 60 days after written notice has been given to Citadel Broadcasting
by the trustee under the indenture or to Citadel Broadcasting and the trustee
under the indenture by the holders of at least 25% in aggregate principal amount
of the notes then outstanding.

(e) (1) An event of default has occurred under any mortgage, bond,
indenture, loan agreement or other document evidencing an issue of Debt of
Citadel Broadcasting or any Significant Subsidiary, which issue has an aggregate
outstanding principal amount of not less than $5.0 million, and such default has
resulted in such Debt becoming, whether by declaration or otherwise, due and
payable prior to the date on which it would otherwise become due and payable or
(2) a default in any payment when due at final maturity of any such Debt.

(f) Failure by Citadel Broadcasting or any of its Restricted Subsidiaries
to pay one or more final judgments the uninsured portion of which exceeds in the
aggregate $5.0 million, which judgment or judgments are not paid, discharged or
stayed for a period of 60 days.

(g) Any Subsidiary Notes Guarantee ceases to be in full force and effect or
is declared null and void or any Subsidiary Notes Guarantor denies that it has
any further liability under any Subsidiary Notes Guarantee, or gives notice to
such effect (other than by reason of the termination of the indenture or the
release of any Subsidiary Notes Guarantee in accordance with the indenture), and
such condition has continued for a period of 30 days after written notice of
such failure requiring the Subsidiary Notes Guarantor and Citadel Broadcasting
to remedy the same has been given (1) to Citadel Broadcasting by the trustee
under the

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indenture or (2) to Citadel Broadcasting and the trustee under the indenture by
the holders of 25% in the aggregate principal amount of the notes then
outstanding.

(h) The occurrence of certain events of bankruptcy, insolvency or
reorganization with respect to Citadel Broadcasting or any Significant
Subsidiary.

If an Event of Default (other than as specified in clause (h) above) occurs
and is continuing, the trustee under the indenture or the holders of not less
than 25% in aggregate principal amount of the notes then outstanding may, and
the trustee under the indenture at the request of such holders shall, declare
the principal of all of the outstanding notes immediately due and payable, by a
notice in writing to Citadel Broadcasting (and to the trustee under the
indenture if given by the Holders) and, if the Credit Facility is in effect, to
the agent under the Credit Facility, and, upon any such declaration, such
principal will become due and payable immediately. If an Event of Default
specified in clause (h) above occurs and is continuing, then such principal will
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the trustee under the indenture or any holder of notes.

At any time after a declaration of acceleration under the indenture, but
before a judgment or decree for payment of the money due has been obtained by
the trustee under the indenture, the holders of a majority in aggregate
principal amount of the outstanding notes, by written notice to Citadel
Broadcasting and the trustee under the indenture, may rescind such declaration
and its consequences if:

(1) Citadel Broadcasting has paid or deposited with the trustee under the
indenture a sum sufficient to pay:

(A) all overdue interest on all notes,

(B) all unpaid principal of (and premium, if any, on) any outstanding
notes that has become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the notes,

(C) to the extent that payment of such interest is lawful, interest
upon overdue interest and overdue principal amount at the rate borne by the
notes, and

(D) all sums paid or advanced by the trustee under the indenture and
the reasonable compensation, expenses, disbursements and advances of the
trustee under the indenture, its agents and counsel, and

(2) all Events of Default, other than the non-payment of principal of (or
premium, if any, on) or interest on the notes that have become due solely by
such declaration of acceleration, have been cured or waived.

No such rescission will affect any subsequent default or impair any right
consequent thereon.

The holders of not less than a majority in aggregate principal amount of
the outstanding notes may, on behalf of the holders of all of the notes, waive
any past defaults under the indenture, except a default in the payment of the
principal of (and premium, if any) or interest on any note, or in respect of a
covenant or provision that under the indenture cannot be modified or amended
without the consent of the holder of each note outstanding.

If a Default or an Event of Default occurs and is continuing and is known
to the trustee under the indenture, the trustee under the indenture will mail to
each holder of the notes notice of the Default or Event of Default within 90
days after the occurrence thereof. Except

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in the case of a Default or an Event of Default in payment of principal of (and
premium, if any, on) or interest on any notes, the trustee under the indenture
may withhold the notice to the holders of the notes if a committee of its trust
officers in good faith determines that withholding such notice is in the
interests of the holders of the notes.

Citadel Broadcasting is required to furnish to the trustee under the
indenture annual statements as to the performance by Citadel Broadcasting and
the Subsidiary Notes Guarantors of their respective obligations under the
indenture and as to any default in such performance. Citadel Broadcasting is
also required to notify the trustee under the indenture within five days of any
officer of Citadel Broadcasting having knowledge of any Default.

DEFEASANCE OR COVENANT DEFEASANCE OF INDENTURE
- --------------------------------------------------------------------------------

Summary: Citadel Broadcasting may terminate its and any Subsidiary Notes
Guarantors' obligations with respect to the notes and some of the covenants in
the indenture, subject to the exceptions set forth below.
- --------------------------------------------------------------------------------

Citadel Broadcasting may, at its option and at any time, terminate the
obligations of Citadel Broadcasting and any Subsidiary Notes Guarantors with
respect to the then outstanding notes ("defeasance"). Such defeasance means that
Citadel Broadcasting will be deemed to have paid and discharged the entire Debt
represented by the then outstanding notes, except for:

(a) the rights of holders of then outstanding notes to receive payments in
respect of the principal of (and premium, if any, on) and interest on the notes
when such payments are due,

(b) Citadel Broadcasting's obligations to issue temporary notes, register
the transfer or exchange of any notes, replace mutilated, destroyed, lost or
stolen notes, maintain an office or agency for payments in respect of the notes
and segregate and hold such payments in trust,

(d) the defeasance provisions of the indenture.

In addition, Citadel Broadcasting may, at its option and at any time, elect
to terminate the obligations of Citadel Broadcasting and any Subsidiary Notes
Guarantor with respect to certain covenants set forth in the indenture and
described under "--Certain Covenants" above, and any omission to comply with
such obligations would not constitute a Default or an Event of Default with
respect to the notes ("covenant defeasance").

In order to exercise either defeasance or covenant defeasance,

(a) Citadel Broadcasting must irrevocably deposit or cause to be deposited
with the trustee under the indenture, as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the holders of
the notes, money in an amount, or U.S. government securities that through the
scheduled payment of principal and interest thereon will provide money in an
amount, or a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay and discharge the
principal of (and premium, if any, on) and interest on the then outstanding
notes at maturity (or upon redemption, if applicable) of such principal or
installment of interest,

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(b) no Default or Event of Default has occurred and is continuing on the
date of such deposit or, insofar as an event of bankruptcy under clause (h) of
"--Events of Default" above is concerned, at any time during the period ending
on the 91st day after the date of such deposit,

(c) such defeasance or covenant defeasance must not result in a breach or
violation of, or constitute a default under, the indenture or any material
agreement or instrument to which Citadel Broadcasting or any Subsidiary Notes
Guarantor is a party or by which it is bound or cause the trustee under the
indenture or the trust so created to be subject to the Investment Company Act of
1940, as amended,

(d) in the case of defeasance, Citadel Broadcasting must deliver to the
trustee under the indenture an opinion of counsel stating that Citadel
Broadcasting has received from, or there has been published by, the Internal
Revenue Service a ruling, or since the date hereof, there has been a change in
applicable federal income tax law, to the effect, and based thereon such opinion
must confirm that, the holders of the outstanding notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
had not occurred,

(e) in the case of covenant defeasance, Citadel Broadcasting must have
delivered to the trustee under the indenture an opinion of counsel to the effect
that the holders of the notes outstanding will not recognize income, gain or
loss for federal income tax purposes as a result of such covenant defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such covenant defeasance
had not occurred, and

(f) Citadel Broadcasting must have delivered to the trustee under the
indenture an officers' certificate and an opinion of counsel, each stating that
all conditions precedent provided for relating to either the defeasance or the
covenant defeasance, as the case may be, have been complied with.

SATISFACTION AND DISCHARGE

The indenture will cease to be of further effect (except as to surviving
rights of registration of transfer or exchange of the notes, as expressly
provided for in the indenture) and, upon the request of Citadel Broadcasting,
the trustee under the indenture, at the expense of Citadel Broadcasting, will
execute proper instruments acknowledging satisfaction and discharge of the
indenture when (a) either:

(1) all the notes theretofore authenticated and delivered (other than
destroyed, lost or stolen notes that have been replaced or paid and notes
that have been subject to defeasance as described under "--Defeasance or
Covenant Defeasance of Indenture") have been delivered to the trustee under
the indenture for cancellation or

(2) all notes not theretofore delivered to the trustee under the
indenture for cancellation:

(A) have become due and payable,

(B) will become due and payable at Stated Maturity within one year,
or

(C) are to be called for redemption within one year under
arrangements satisfactory to the trustee under the indenture for the
giving of notice of redemption

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by the trustee under the indenture in the name, and at the expense, of
Citadel Broadcasting,

and Citadel Broadcasting has irrevocably deposited or caused to be
deposited with the trustee under the indenture funds in trust for the
purpose in an amount sufficient to pay and discharge the entire Debt on
such notes not theretofore delivered to the trustee under the indenture for
cancellation, for principal (and premium, if any, on) and interest to the
date of such deposit (in the case of notes that have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be,

(b) Citadel Broadcasting has paid or caused to be paid all sums payable
under the indenture by Citadel Broadcasting, and

(c) Citadel Broadcasting has delivered to the trustee under the indenture
an officers' certificate and an opinion of counsel, each stating that all
conditions precedent provided in the indenture relating to the satisfaction and
discharge of the indenture have been complied with.

AMENDMENTS AND WAIVERS

Modifications and amendments of the indenture and any Subsidiary Notes
Guarantee may be made by Citadel Broadcasting, any affected Subsidiary Notes
Guarantor and the trustee under the indenture with the consent of the holders of
a majority in aggregate outstanding principal amount of the notes; provided,
however, that no such modification or amendment may, without the consent of the
holder of each outstanding note affected thereby,

(a) change the Stated Maturity of the principal of, or any installment of
interest on, any note, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof, or change
the place of payment where or change the coin or currency in which, any note or
any premium or interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date),

(b) reduce the percentage in principal amount of outstanding notes, the
consent of whose holders is required for any such amendment or for any waiver of
compliance with certain provisions of, or certain defaults and their
consequences provided for under, the indenture,

(c) modify any of the provisions of the indenture relating to the
subordination of the notes or the Subsidiary Notes Guarantees in a manner
materially adverse to the holders, or

(d) waive a default in the payment of principal of, or premium, if any, or
interest on the notes or reduce the percentage or aggregate principal amount of
outstanding notes the consent of whose holders is necessary for waiver of
compliance with certain provisions of the indenture or for waiver of certain
defaults.

The holders of a majority in aggregate principal amount of the notes
outstanding may waive compliance with certain restrictive covenants and
provisions of the indenture.

Without the consent of any holders, Citadel Broadcasting and the trustee
under the indenture, at any time and from time to time, may enter into one or
more indentures supplemental to the indenture governing the notes for any of the
following purposes:

(a) to evidence the succession of another person to Citadel Broadcasting
and the assumption by any such successor of the covenants of Citadel
Broadcasting in the indenture and in the notes, or

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(b) to add to the covenants of Citadel Broadcasting for the benefit of the
holders, or to surrender any right or power conferred upon Citadel Broadcasting
under the indenture, or

(d) to provide for uncertificated notes in addition to or in place of the
certificated notes, or

(e) to evidence and provide for the acceptance of appointment under the
indenture by a successor trustee under the indenture; or

(f) to secure the notes; or

(g) to cure any ambiguity, to correct or supplement any provision in the
indenture that may be defective or inconsistent with any other provision in the
indenture, or to make any other provisions with respect to matters or questions
arising under the indenture, provided that such actions pursuant to this clause
do not adversely affect the interests of the holders in any material respect; or

(h) to comply with any requirements of the SEC in order to effect and
maintain the qualification of the indenture under the Trust Indenture Act.

THE TRUSTEE

The Bank of New York, the trustee under the indenture, is the initial
paying agent and registrar for the notes. The Bank of New York is a lender under
the Credit Facility.

The indenture provides that, except during the continuance of an Event of
Default, the trustee under the indenture will perform only such duties as are
specifically set forth in the indenture. Under the indenture, the holders of a
majority in outstanding principal amount of the notes will have the right to
direct the time, method and place of conducting any proceeding or exercising any
remedy available to the trustee under the indenture, subject to certain
exceptions. If an Event of Default has occurred and is continuing, the trustee
under the indenture will exercise such rights and powers vested in it under the
indenture and use the same degree of care and skill in its exercise as a prudent
person would exercise under the circumstances in the conduct of such person's
own affairs.

The indenture and provisions of the Trust Indenture Act incorporated by
reference in the indenture, contain limitations on the rights of the trustee
under the indenture, should it become a creditor of Citadel Broadcasting, to
obtain payment of claims in certain cases or to realize on certain property
received by it in respect of any such claims, as security or otherwise. The
trustee under the indenture is permitted to engage in other transactions.
However, if the trustee under the indenture acquires any prohibited conflicting
interest, it must eliminate the conflict or resign.

GOVERNING LAW

The indenture, the notes and the Subsidiary Notes Guarantees are governed
by, and construed in accordance with, the laws of the State of New York.

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CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of certain U.S. federal income tax consequences
associated with the acquisition, ownership and disposition of the notes by
holders who hold such notes as capital assets. The following summary does not
discuss all of the aspects of federal income taxation that may be relevant to a
holder of the notes in light of his or her particular circumstances, or to
certain types of holders, including:

-- dealers in securities,

-- insurance companies,

-- tax-exempt organizations,

-- financial institutions,

-- broker-dealers,

-- S corporations,

and except as discussed below:

-- foreign corporations,

-- persons who are not citizens or residents of the United States, and

-- persons who hold the notes as part of a hedge, straddle, synthetic
security or other integrated investment

which are subject to special treatment under the federal income tax laws. This
discussion also does not address the tax consequences to nonresident aliens or
foreign corporations that are subject to United States federal income tax on a
net basis on income with respect to a note because such income is effectively
connected with the conduct of a U.S. trade or business. Such holders generally
are taxed in a similar manner to U.S. Holders (as defined below); however,
certain special rules may apply. In addition, this discussion is limited to
holders who hold the notes as capital assets within the meaning of Section 1221
of the Internal Revenue Code of 1986, as amended. This summary also does not
describe any tax consequences under state, local or foreign tax laws.

The discussion is based upon the Internal Revenue Code of 1986, Treasury
Regulations, IRS rulings and pronouncements and judicial decisions all in effect
as of the date hereof, all of which are subject to change at any time by
legislative, judicial or administrative action. Any such changes may be applied
retroactively in a manner that could adversely affect a holder of the notes.
Citadel Broadcasting has not sought and will not seek any rulings or opinions
from the IRS or counsel with respect to the matters discussed below. There can
be no assurance that the IRS will not take positions concerning the tax
consequences of the purchase, ownership or disposition of the notes that are
different from those discussed herein.

HOLDERS OF NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE
U.S. FEDERAL INCOME TAX CONSEQUENCES THAT MAY APPLY TO THEM, AS WELL AS THE
APPLICATION OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.

THE EXCHANGE OFFER

The exchange of the new notes for outstanding notes pursuant to the
exchange offer will not be treated as an exchange for U.S. federal income tax
purposes because the new notes will not be considered to differ materially in
kind or extent from the outstanding notes.

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<PAGE> 156

Rather, the new notes received by a holder will be treated as a continuation of
the outstanding notes in the hands of such holder. Therefore, the same U.S.
federal income tax consequences apply to the new notes as are applicable to the
outstanding notes; and a holder should have the same adjusted tax basis and
holding period in the new notes as the holder had in the outstanding notes
immediately before the exchange.

CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES TO U.S. HOLDERS

A U.S. Holder is any holder who or which is:

-- a citizen or individual resident of the United States for U.S.
federal income tax purposes,

-- a corporation, partnership or other business entity created or
organized under the laws of the United States or of any political
subdivision thereof,

-- an estate other than a foreign estate, as defined in Section
7701(a)(31) of the Internal Revenue Code of 1986, or

-- a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or
more United States persons have the authority to control all
substantial decisions of the trust.

Taxation of Stated Interest. In general, U.S. Holders of the notes will be
required to include interest received thereon in taxable income as ordinary
income at the time it accrues or is received, in accordance with the holder's
regular method of accounting for U.S. federal income tax purposes.

Effect of Optional Redemption, Repurchase and Registration Rights. Under
certain circumstances Citadel Broadcasting may be entitled to redeem a portion
of the notes. In addition, under certain circumstances, each holder of notes may
require Citadel Broadcasting to repurchase all or any part of such holder's
notes. Further, the outstanding notes provide for additional interest if Citadel
Broadcasting fails to comply with certain obligations under the registration
rights agreement entered into in connection with the offering of the outstanding
9-1/4% notes. Treasury Regulations contain special rules for determining the
yield to maturity and maturity on a debt instrument in the event the debt
instrument provides for a contingency that could result in the acceleration or
deferral of one or more payments or in additional interest. Citadel Broadcasting
does not believe that these rules are likely to apply to either Citadel
Broadcasting's rights to redeem the notes or to the holders' rights to require
Citadel Broadcasting to repurchase the notes or to the provision for additional
interest upon such failure. Therefore, Citadel Broadcasting does not intend to
treat such provisions of the notes as affecting the computation of the yield to
maturity or maturity date of the notes.

Sale or Other Taxable Disposition of the Notes. The sale, exchange,
redemption, retirement or other taxable disposition of a note will result in the
recognition of gain or loss to a U.S. Holder in an amount equal to the
difference between:

-- the amount of cash and fair market value of property received in
exchange for the note, except to the extent attributable to the
payment of accrued but unpaid stated interest not previously
included in income, and

-- the holder's adjusted tax basis in such note.

A holder's initial tax basis in a note purchased by such holder will be
equal to the price paid for the note.

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<PAGE> 157

Any gain or loss on the sale or other taxable disposition of a note
generally will be capital gain or loss. Payments on such disposition for accrued
interest not previously included in income will be treated as ordinary interest
income.

Backup Withholding. The backup withholding rules require a payor to deduct
and withhold a tax if:

-- the payee fails to furnish a taxpayer identification number in the
prescribed manner,

-- the IRS notifies the payor that the taxpayer identification number
furnished by the payee is incorrect,

-- the payee has failed to report properly the receipt of reportable
payments and the IRS has notified the payor that withholding is
required, or

-- the payee fails to certify under the penalty of perjury that such
payee is not subject to backup withholding.

If any one of the events discussed above occurs with respect to a holder of
notes, Citadel Broadcasting, its paying agent or other withholding agent will be
required to withhold a tax equal to 31% of any reportable payment made in
connection with the notes of such holder. A reportable payment includes, among
other things, amounts paid in respect of interest on a note. Any amounts
withheld from a payment to a holder under the backup withholding rules will be
allowed as a refund or credit against the holder's federal income tax, as long
as the required information is furnished to the IRS. Certain holders, including,
among others, corporations and certain tax-exempt organizations, are not subject
to backup withholding.

CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES FOR NON-U.S. HOLDERS

This section discusses rules applicable to a Non-U.S. Holder (as defined
below) of notes. This summary does not address the tax consequences to
stockholders, partners or beneficiaries in a Non-U.S. Holder. For purposes
hereof, a Non-U.S. Holder is any person who is not a U.S. Holder and is not
subject to U.S. federal income tax on a net basis on income with respect to a
note because such income is effectively connected with the conduct of a U.S.
trade or business.

Interest. Payments of interest to a Non-U.S. Holder that do not qualify for
the portfolio interest exception discussed below will be subject to withholding
of U.S. federal income tax at a rate of 30% unless a U.S. income tax treaty
applies to reduce, or eliminate, the rate of withholding. To claim a treaty
reduced rate, the Non-U.S. Holder must provide a properly executed IRS Form 1001
or applicable successor form.

Subject to the discussion below concerning backup withholding, interest
that is paid to a Non-U.S. Holder on a note will not be subject to U.S. income
or withholding tax if the interest qualifies as portfolio interest. Generally,
interest on the notes that is paid by Citadel Broadcasting will qualify as a
portfolio interest if:

(1) the Non-U.S. Holder does not own, actually or constructively, 10% or
more of the total combined voting power of all classes of stock of Citadel
Broadcasting entitled to vote,

(2) the Non-U.S. Holder is not a controlled foreign corporation that is
related to Citadel Broadcasting actually or constructively through stock
ownership for U.S. federal income tax purposes,

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<PAGE> 158

(3) the Non-U.S. Holder is not a bank receiving interest on a loan entered
into in the ordinary course of business, and

(4) either:

-- the beneficial owner of the note provides Citadel Broadcasting or
its paying agent with a properly executed certification on IRS Form
W-8, or a suitable substitute form, signed under penalties of
perjury, that the beneficial owner is not a U.S. person for U.S.
federal income tax purposes and that provides the beneficial
owner's name and address, or

-- a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course
of its business holds the note and certifies to Citadel
Broadcasting or its agent under penalties of perjury that the IRS
Form W-8, or a suitable substitute, has been received by it from
the beneficial owner of the note or a qualifying intermediary and
furnishes the payor a copy thereof.

Treasury Regulations that will be effective with respect to payments made
after December 31, 1999 provide alternative methods for satisfying the
certification requirements described in clause (4) above. These Treasury
Regulations also will require, in the case of notes held by a foreign
partnership, that:

(a) the certification described in clause (4) above be provided by each
partner, and

(b) the partnership provide information, including its taxpayer
identification number.

A look-through rule will apply in the case of tiered partnerships.

Sale, Exchange or Retirement of Notes. Any gain realized by a Non-U.S.
Holder on the sale, exchange or retirement of the notes, will generally not be
subject to U.S. federal income tax or withholding unless:

(1) the Non-U.S. Holder is an individual who was present in the U.S. for
183 days or more in the taxable year of the disposition and meets other
requirements, or

(2) the Non-U.S. Holder is subject to tax pursuant to certain provisions of
the Internal Revenue Code of 1986 applicable to certain individuals who renounce
their U.S. citizenship or terminate long-term U.S. residency.

If a Non-U.S. Holder falls under (2) above, the holder will be taxed on the
net gain derived from the sale under the graduated U.S. federal income tax rates
that are applicable to U.S. citizens and resident aliens, and may be subject to
withholding under certain circumstances. If a Non-U.S. Holder falls under (1)
above, the holder generally will be subject to U.S. federal income tax at a rate
of 30%, or reduced treaty rate, on the gain derived from the sale and may be
subject to withholding in certain circumstances.

U.S. Information Reporting and Backup Withholding Tax. Back-up withholding
generally will not apply to payments on a note issued in registered form that is
beneficially owned by a Non-U.S. Holder if the certification of Non-U.S. Holder
status is provided to Citadel Broadcasting or its agent as described above in
"--Certain U.S. Federal Income Tax Consequences for Non-U.S. Holders--Interest,"
as long as the payor does not have actual knowledge that the holder is a U.S.
person. Citadel Broadcasting may be required to report annually to the IRS and
to each Non-U.S. Holder the amount of interest paid to, and the tax withheld, if
any, with respect to each Non-U.S. Holder.

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<PAGE> 159

If payments of principal and interest are made to the beneficial owner of a
note by or through the foreign office of a custodian, nominee or other agent of
such beneficial owner, or if the proceeds of the sale, exchange or other
disposition of a note are paid to the beneficial owner of a note through a
foreign office of a broker, as defined in the pertinent Treasury Regulations,
the proceeds will not be subject to backup withholding, absent actual knowledge
that the payee is a U.S. person. Information reporting, but not backup
withholding, will apply, however, to a payment by a foreign office of a
custodian, nominee, agent or broker that is:

(1) a U.S. person,

(2) a controlled foreign corporation for U.S. federal income tax purposes,
or

(3) a foreign person that derives 50% or more of its gross income from the
conduct of a U.S. trade or business for a specified three-year period

or, effective for payments after December 31, 1999, by a foreign partnership
with certain U.S. connections, unless the broker has in its records documentary
evidence that the holder is a Non-U.S. Holder and certain conditions are met,
including that the broker has no actual knowledge that the holder is a U.S.
person, or the holder otherwise establishes an exemption. Payment through the
U.S. office of a custodian, nominee, agent or broker is subject to both backup
withholding at a rate of 31% and information reporting, unless the holder
certifies that it is a Non-U.S. Holder under penalties of perjury or otherwise
establishes an exemption.

Any amount withheld under the backup withholding rules from a payment to a
Non-U.S. Holder will be allowed as a credit against, or refund of, such holder's
U.S. federal income tax liability, as long as certain information is provided by
the holder to the IRS.

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PLAN OF DISTRIBUTION

Each Participating Broker-Dealer that receives new notes for its own
account pursuant to the exchange offer must deliver a prospectus in connection
with any resale of such new notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating Broker-Dealer in
connection with resales of new notes received in exchange for outstanding notes
where such outstanding notes were acquired as a result of market-making
activities or other trading activities. Citadel Broadcasting has agreed that,
for a period of 120 days after the date of this prospectus, it will make this
prospectus, as amended or supplemented, available to any Participating
Broker-Dealer for use in connection with any such resale. For the definition of
Participating Broker-Dealer, see "The Exchange Offer" section under the heading
"Resale of the New Notes."

Citadel Broadcasting will not receive any proceeds from any sales of new
notes by Participating Broker-Dealers. New notes received by Participating
Broker-Dealers for their own account pursuant to the exchange offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the new notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such Participating Broker-Dealer and/or the purchasers of
any such new notes. Any Participating Broker-Dealer that resells the new notes
that were received by it for its own account pursuant to the exchange offer and
any broker or dealer that participates in a distribution of such new notes may
be deemed to be an underwriter within the meaning of the Securities Act, and any
profit on any such resale of new notes and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The letter of transmittal states that, by acknowledging that
it will deliver and by delivering a prospectus, a Participating Broker-Dealer
will not be deemed to admit that it is an underwriter within the meaning of the
Securities Act.

For a period of 120 days after the expiration date of the exchange offer,
Citadel Broadcasting will promptly send additional copies of this prospectus and
any amendment or supplement to this prospectus to any Participating
Broker-Dealer that requests such documents in the letter of transmittal.

LEGAL MATTERS

Certain legal matters with respect to the new notes, including federal
income tax consequences, will be passed upon for Citadel Broadcasting by Eckert
Seamans Cherin & Mellott, LLC, Pittsburgh, Pennsylvania.

INDEPENDENT AUDITORS

The consolidated financial statements of Citadel Broadcasting Company as of
December 31, 1996 and 1997, and for each of the years in the three-year period
ended December 31, 1997, have been included in this prospectus in reliance upon
the report of KPMG LLP, independent certified public accountants, appearing
elsewhere in this prospectus, and upon the authority of said firm as experts in
accounting and auditing.

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The consolidated financial statements of Deschutes River Broadcasting, Inc.
and Subsidiaries as of December 31, 1995 and 1996, and for each of the years in
the two-year period ended December 31, 1996, have been included in this
prospectus in reliance upon the report of KPMG LLP, independent certified public
accountants, appearing elsewhere in this prospectus, and upon the authority of
said firm as experts in accounting and auditing.

The consolidated financial statements of Maranatha Broadcasting Company,
Inc.'s Radio Broadcasting Division, as of December 31, 1996, and for the year
then ended, have been included in this prospectus in reliance upon the report of
KPMG LLP, independent certified public accountants, appearing elsewhere in this
prospectus, and upon the authority of said firm as experts in accounting and
auditing.

The consolidated financial statements of Tele-Media Broadcasting Company
and its partnership interests as of December 31, 1995 and 1996 and for each of
the years in the three-year period ended December 31, 1996 included in this
prospectus have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report appearing in this prospectus, and have been included in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.

The financial statements of Snider Corporation and Snider Broadcasting
Corporation and Subsidiary and CDB Broadcasting Corporation as of December 31,
1995 and 1996 and for each of the years in the two-year period ended December
31, 1996 have been included in this prospectus in reliance upon the reports of
Erwin & Company, independent certified public accountants, appearing elsewhere
in this prospectus, and upon the authority of said firm as experts in accounting
and auditing.

The combined financial statements of Pacific Northwest Broadcasting
Corporation and Affiliates as of December 31, 1996 and for the year ended
December 31, 1996 have been included in this prospectus in reliance upon the
report of Balukoff, Lindstrom & Co., P.A., independent certified public
accountants, appearing elsewhere in this prospectus, and upon the authority of
said firm as experts in accounting and auditing.

The financial statements of Wicks Radio Group (a division of Wicks
Broadcast Group Limited Partnership) as of December 31, 1997 and for the year
then ended have been included in this prospectus in reliance upon the report of
KPMG LLP, independent certified public accountants, appearing elsewhere in this
prospectus, and upon the authority of said firm as experts in accounting and
auditing.

AVAILABLE INFORMATION

Citadel Broadcasting has filed with the SEC a Registration Statement on
Form S-4 under the Securities Act concerning the new notes being offered. This
prospectus does not contain all the information set forth in the registration
statement, parts of which are omitted in accordance with the rules and
regulations of the SEC. For further information concerning Citadel Broadcasting
and the notes being offered, Citadel Broadcasting refers you to the registration
statement and the documents filed as exhibits to the registration statement.

Citadel Broadcasting also files annual, quarterly and special reports and
other information with the SEC.

The registration statement and any document Citadel Broadcasting files with
the SEC can be read and copied at the Public Reference Section of the SEC, 450
Fifth Street, N.W.,

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Washington, D.C. 20549. Copies of the registration statement and any document
Citadel Broadcasting files with the SEC can be obtained from the Public
Reference Section of the SEC at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20459, at prescribed rates. The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

Citadel Broadcasting files its reports and has filed the registration
statement with the SEC electronically. The SEC maintains a web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. The address of that
web site is http://www.sec.gov.

Citadel Broadcasting intends, and is required by the terms of the indenture
governing the notes, to furnish the holders of the new notes with annual reports
containing consolidated financial statements audited by its independent
certified public accountants and with quarterly reports containing unaudited
condensed consolidated financial statements for each of the first three quarters
of each fiscal year.

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INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
CITADEL BROADCASTING COMPANY AND SUBSIDIARY
Independent Auditors' Report................................ F-4
Consolidated Balance Sheets as of December 31, 1996 and
1997...................................................... F-5
Consolidated Statements of Operations for the years ended
December 31, 1995, 1996 and 1997.......................... F-6
Consolidated Statements of Shareholder's Equity for the
years ended December 31, 1994, 1995, 1996 and 1997........ F-7
Consolidated Statements of Cash Flows for the years ended
December 31, 1995, 1996 and 1997.......................... F-8
Notes to Consolidated Financial Statements.................. F-10
Consolidated Balance Sheets as of December 31, 1997 and
September 30, 1998 (unaudited)............................ F-27
Consolidated Statements of Operations for the nine months
ended September 30, 1997 and 1998 (unaudited)............. F-28
Consolidated Statements of Comprehensive Income for the nine
months ended September 30, 1997 and 1998 (unaudited)...... F-29
Consolidated Statements of Cash Flows for the nine months
ended September 30, 1997 and 1998 (unaudited)............. F-30
Notes to Unaudited Consolidated Financial Statements........ F-31

DESCHUTES RIVER BROADCASTING, INC. AND SUBSIDIARIES
Independent Auditors' Report................................ F-34
Consolidated Balance Sheets as of December 31, 1995 and
1996...................................................... F-35
Consolidated Statements of Operations for the years ended
December 31, 1995 and 1996................................ F-36
Consolidated Statements of Stockholders' Equity for the
years ended December 31, 1995 and 1996.................... F-37
Consolidated Statements of Cash Flows for the years ended
December 31, 1995 and 1996................................ F-38
Notes to Consolidated Financial Statements.................. F-39

TELE-MEDIA BROADCASTING COMPANY AND ITS PARTNERSHIP
INTERESTS
Independent Auditors' Report................................ F-47
Consolidated Balance Sheets as of December 31, 1995 and
1996...................................................... F-48
Consolidated Statements of Operations for the years ended
December 31, 1994, 1995 and 1996.......................... F-49
Consolidated Statements of Deficiency in Net Assets for the
years ended December 31, 1994, 1995 and 1996.............. F-50
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1995 and 1996.......................... F-51
Notes to Consolidated Financial Statements.................. F-52
Condensed Consolidated Balance Sheet as of June 30, 1997
(unaudited)............................................... F-60
Condensed Consolidated Statements of Operations and Changes
in Deficit for the six months ended June 30, 1996 and 1997
(unaudited)............................................... F-61
Condensed Consolidated Statements of Cash Flows for the six
months ended June 30, 1996 and 1997 (unaudited)........... F-62
Notes to Unaudited Condensed Consolidated Financial
Statements................................................ F-63

SNIDER CORPORATION
Independent Auditors' Report................................ F-64
Balance Sheets as of December 31, 1995 and 1996............. F-65
Statements of Income for the years ended December 31, 1995
and 1996.................................................. F-66
Statements of Stockholders' Equity for the years ended
December 31, 1995 and 1996................................ F-67
</TABLE>

F-1
<PAGE> 164

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Statements of Cash Flows for the years ended December 31,
1995 and 1996............................................. F-68
Notes to Financial Statements............................... F-69
Schedule of Combining Operating Income, Excluding
Depreciation and Amortization for Broadcasting Units for
the year ended December 31, 1996.......................... F-72
Balance Sheet as of May 31, 1997 (unaudited)................ F-73
Statement of Income for the five months ended May 31, 1997
(unaudited)............................................... F-74
Statement of Stockholders' Equity for the five months ended
May 31, 1997 (unaudited).................................. F-75
Statement of Cash Flows for the five months ended May 31,
1997 (unaudited).......................................... F-76
Note to Financial Statements (unaudited).................... F-77
Balance Sheet as of June 30, 1996 (unaudited)............... F-78
Statement of Income for the six months ended June 30, 1996
(unaudited)............................................... F-79
Statement of Stockholders' Equity for the six months ended
June 30, 1996 (unaudited)................................. F-80
Statement of Cash Flows for the six months ended June 30,
1996 (unaudited).......................................... F-81

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY AND
CDB BROADCASTING CORPORATION
Independent Auditors' Report................................ F-82
Combined Balance Sheets as of December 31, 1995 and 1996.... F-83
Combined Statements of Operations for the years ended
December 31, 1995 and 1996................................ F-84
Combined Statements of Stockholders' Deficit for the years
ended December 31, 1995 and 1996.......................... F-85
Combined Statements of Cash Flows for the years ended
December 31, 1995 and 1996................................ F-86
Notes to Combined Financial Statements...................... F-87
Combined Balance Sheet as of May 31, 1997 (unaudited)....... F-93
Combined Statement of Operations for the five months ended
May 31, 1997 (unaudited).................................. F-94
Combined Statement of Stockholders' Deficit for the five
months ended May 31, 1997 (unaudited)..................... F-95
Combined Statement of Cash Flows for the five months ended
May 31, 1997 (unaudited).................................. F-96
Note to Combined Financial Statements (unaudited)........... F-97
Combined Balance Sheet as of June 30, 1996 (unaudited)...... F-98
Combined Statement of Operations for the six months ended
June 30, 1996 (unaudited)................................. F-99
Combined Statement of Stockholders' Deficit for the six
months ended June 30, 1996 (unaudited).................... F-100
Combined Statement of Cash Flows for the six months ended
June 30, 1996 (unaudited)................................. F-101

MARANATHA BROADCASTING COMPANY, INC.'S RADIO BROADCASTING
DIVISION
Independent Auditors' Report................................ F-102
Balance Sheet as of December 31, 1996 and September 15, 1997
(unaudited)............................................... F-103
Statement of Operations and Division Equity for the year
ended December 31, 1996 and the eight and one-half-month
period ended September 15, 1997 (unaudited)............... F-104
Statement of Cash Flows for the year ended December 31, 1996
and the eight and one-half-month period ended September
15, 1997 (unaudited)...................................... F-105
Notes to Financial Statements............................... F-106

PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES
Independent Auditors' Report................................ F-109
Combined Balance Sheet as of December 31, 1996.............. F-110
Combined Statement of Operations for the year ended December
31, 1996.................................................. F-111
Combined Statement of Changes in Owners' Equity for the year
ended December 31, 1996................................... F-112
</TABLE>

F-2
<PAGE> 165

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Combined Statement of Cash Flows for the year ended December
31, 1996.................................................. F-113
Notes to Combined Financial Statements...................... F-114
Unaudited Combined Balance Sheet as of October 31, 1997..... F-122
Unaudited Combined Statement of Operations for the ten
months ended October 31, 1997............................. F-123
Unaudited Combined Statement of Changes in Owners' Equity
for the ten months ended October 31, 1997................. F-124
Unaudited Combined Statement of Cash Flows for the ten
months ended October 31, 1997............................. F-125
Notes to Unaudited Combined Financial Statements............ F-126

WICKS RADIO GROUP (A DIVISION OF WICKS BROADCAST GROUP
LIMITED PARTNERSHIP)
Independent Auditors' Report................................ F-127
Balance Sheets as of December 31, 1997 and September 30,
1998 (unaudited).......................................... F-128
Statements of Operations and Changes in Division Equity for
the year ended December 31, 1997 and the nine months ended
September 30, 1998 (unaudited)............................ F-129
Statements of Cash Flows for the year ended December 31,
1997 and for the nine months ended September 30, 1998
(unaudited)............................................... F-130
Notes to Financial Statements............................... F-131
</TABLE>

F-3
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INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholder
Citadel Broadcasting Company:

We have audited the accompanying consolidated balance sheets of Citadel
Broadcasting Company (a wholly-owned subsidiary of Citadel Communications
Corporation) and subsidiary as of December 31, 1996 and 1997 and the related
consolidated statements of operations, shareholder's equity and cash flows for
each of the years in the three-year period ended December 31, 1997. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Citadel
Broadcasting Company and subsidiary as of December 31, 1996 and 1997 and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1997, in conformity with generally accepted
accounting principles.

/s/ KPMG PEAT MARWICK LLP

Phoenix, Arizona
March 26, 1998

F-4
<PAGE> 167

CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1996 1997
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................ $ 1,588,366 $ 7,684,991
Cash held in escrow.................................. -- 718,561
Accounts receivable, less allowance for doubtful
accounts of $621,054 in 1996, and $808,942 in
1997.............................................. 12,199,973 25,744,137
Notes receivable from related parties................ 118,646 246,455
Prepaid expenses..................................... 595,755 1,532,227
------------ ------------
Total current assets.............................. 14,502,740 35,926,371
Property and equipment, net............................ 15,208,569 35,242,284
Note receivable........................................ 18,251,402 --
Intangible assets, net................................. 51,801,835 268,689,516
Deposits for pending acquisitions...................... 300,000 650,000
Other assets........................................... 2,179,039 3,664,123
------------ ------------
$102,243,585 $344,172,294
============ ============

LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable..................................... $ 1,286,019 $ 4,001,194
Accrued liabilities.................................. 2,301,716 9,060,129
Current maturities of notes payable.................. 2,500,000 --
Note payable to parent company....................... 12,174,416 --
Current maturities of other long-term obligations.... 435,791 271,352
------------ ------------
Total current liabilities......................... 18,697,942 13,332,675
Notes payable, less current maturities................. 75,084,060 90,084,059
Senior subordinated notes payable...................... -- 98,331,117
Other long-term obligations, less current maturities... 877,600 1,012,649
Deferred tax liability................................. 1,585,333 23,270,338
Exchangeable preferred stock........................... -- 102,009,531
Commitments and contingencies
Shareholder's equity:
Common stock, $.001 par value; authorized 136,300
shares, issued and outstanding 40,000 shares...... 40 40
Additional paid-in capital........................... 27,472,380 42,296,316
Accumulated deficit.................................. (21,473,770) (26,164,431)
------------ ------------
Total shareholder's equity........................ 5,998,650 16,131,925
------------ ------------
$102,243,585 $344,172,294
============ ============
</TABLE>

See accompanying notes to consolidated financial statements.
F-5
<PAGE> 168

CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1995 1996 1997
----------- ----------- ------------
<S> <C> <C> <C>
Gross broadcasting revenue.................. $38,047,879 $50,824,384 $ 99,469,550
Less agency commissions................... 3,936,169 5,411,578 9,666,280
----------- ----------- ------------
Net broadcasting revenue............... 34,111,710 45,412,806 89,803,270
----------- ----------- ------------
Operating expenses:
Station operating expenses................ 26,832,123 33,232,485 65,245,095
Depreciation and amortization............. 4,890,517 5,158,206 14,635,534
Corporate general and administrative...... 2,273,744 3,247,579 3,530,067
----------- ----------- ------------
Operating expenses..................... 33,996,384 41,638,270 83,410,696
----------- ----------- ------------
Operating income............................ 115,326 3,774,536 6,392,574
----------- ----------- ------------
Nonoperating expenses (income):
Interest expense.......................... 5,241,760 6,155,472 12,303,981
Interest income........................... (70,503) (407,581) (439,229)
Loss (gain) on sale of property and
equipment.............................. (707,286) 1,749 --
Other (income) expense, net............... (3,221) (8,124) (11,944)
----------- ----------- ------------
Nonoperating expenses, net............. 4,460,750 5,741,516 11,852,808
----------- ----------- ------------
Loss before income taxes and extraordinary
item...................................... (4,345,424) (1,966,980) (5,460,234)
Deferred income tax (benefit)............... -- -- (769,573)
----------- ----------- ------------
Loss before extraordinary item.............. (4,345,424) (1,966,980) (4,690,661)
Extraordinary loss on extinguishment of
debt...................................... -- (1,769,000) --
----------- ----------- ------------
Net loss.................................... (4,345,424) (3,735,980) (4,690,661)
Dividend requirement for exchangeable
preferred stock........................... -- -- 6,632,939
----------- ----------- ------------
Net loss applicable to common shares........ $(4,345,424) $(3,735,980) $(11,323,600)
=========== =========== ============
Basic and diluted net loss per common
share..................................... $ (109) $ (93) $ (283)
=========== =========== ============
Weighted average common shares
outstanding............................... 40,000 40,000 40,000
=========== =========== ============
</TABLE>

See accompanying notes to consolidated financial statements.
F-6
<PAGE> 169

CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY

<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN ACCUMULATED SHAREHOLDER'S
STOCK CAPITAL DEFICIT EQUITY
------ ----------- ------------ -------------
<S> <C> <C> <C> <C>
Balances, December 31, 1994....... $40 $ 8,569,684 $(13,392,366) $ (4,822,642)
Net loss.......................... -- -- (4,345,424) (4,345,424)
Capital contribution to
parent(1)....................... -- (81,127) -- (81,127)
--- ----------- ------------ ------------
Balances, December 31, 1995....... 40 8,488,557 (17,737,790) (9,249,193)
Net loss.......................... -- -- (3,735,980) (3,735,980)
Capital contribution from
parent(2)....................... -- 18,983,823 -- 18,983,823
--- ----------- ------------ ------------
Balances, December 31, 1996....... 40 27,472,380 (21,473,770) 5,998,650
Net loss.......................... -- -- (4,690,661) (4,690,661)
Exchangeable preferred stock
dividend requirement............ -- (6,632,939) -- (6,632,939)
Capital contribution from
parent(3)....................... -- 21,456,875 -- 21,456,875
--- ----------- ------------ ------------
Balances, December 31, 1997....... $40 $42,296,316 $(26,164,431) $ 16,131,925
=== =========== ============ ============
</TABLE>

- ---------------

(1) Represents the payment of preferred stock dividends on behalf of the parent
company.

(2) Represents the net capital contribution from the parent company for the
issuance and redemption of preferred stock, the redemption of warrants, the
cost of the equity issuance, as well as the payment of preferred stock
dividends.

(3) Represents the net capital contribution from the parent company for the
issuance of preferred stock and the exercise of common stock options.

See accompanying notes to consolidated financial statements.
F-7
<PAGE> 170

CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------
1995 1996 1997
----------- ------------ -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss................................. $(4,345,424) $ (3,735,980) $ (4,690,661)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Extraordinary loss.................... -- 1,769,000 --
Depreciation and amortization......... 4,890,517 5,158,206 14,635,534
Deferred tax benefit.................. -- -- (769,573)
Amortization of debt issuance costs
and debt discounts.................. 131,752 370,652 441,334
Bad debt expense...................... 484,702 421,378 1,016,375
Loss/(gain) on sale of property and
equipment........................... (707,286) 1,749 --
Changes in assets and liabilities, net of
acquisitions:
Increase in accounts receivable and
notes receivable from related
parties............................. (1,069,681) (5,257,849) (10,214,907)
(Increase) decrease in prepaid
expenses............................ 55,531 (175,058) (230,070)
(Increase) decrease in other assets... 75,432 41,303 (676,946)
Increase in accounts payable.......... 651,247 94,017 707,945
Increase (decrease) in accrued
liabilities......................... (600,847) (81,801) 5,323,678
----------- ------------ -------------
Net cash provided by (used in)
operating activities............. (434,057) (1,394,383) 5,542,709
Cash flows from investing activities:
Capital expenditures..................... (1,690,950) (2,037,840) (2,070,223)
Capitalized acquisition costs............ (33,480) (1,144,699) (2,928,956)
Cash paid to acquire stations............ -- (38,805,036) (205,973,171)
Deposits for pending acquisitions........ (150,000) (930,000) (650,000)
Increase in note receivable.............. -- (18,251,402) --
Proceeds from sales of property and
equipment............................. 6,684,479 1,115 --
----------- ------------ -------------
Net cash provided by (used in)
investing activities............. $ 4,810,049 $(61,167,862) $(211,622,350)
----------- ------------ -------------
</TABLE>

See accompanying notes to consolidated financial statements.
F-8
<PAGE> 171

CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------
1995 1996 1997
----------- ------------ ------------
<S> <C> <C> <C>
Cash flows from financing activities:
Principal payments on notes payable....... $(6,866,198) $(50,970,385) $(39,000,000)
Proceeds from notes payable............... 2,400,000 86,244,059 52,499,999
Proceeds from senior subordinated notes
payable................................ -- -- 97,250,000
Proceeds from issuance of exchangeable
preferred stock........................ -- -- 95,376,592
Payment of debt issuance costs............ (30,000) (2,283,124) (1,855,123)
Principal payments on other long-term
obligations............................ (412,066) (776,107) (735,077)
Prepayment premium........................ -- (420,000) --
Advances from (payments to) parent
company................................ -- 12,367,070 (12,817,000)
Capital contribution from parent
company................................ -- 18,983,823 21,456,875
----------- ------------ ------------
Net cash provided by (used in)
financing activities................. (4,908,264) 63,145,336 212,176,266
----------- ------------ ------------
Net increase (decrease) in cash and cash
equivalents............................... (532,272) 583,091 6,096,625
Cash and cash equivalents, beginning of
year...................................... 1,537,547 1,005,275 1,588,366
----------- ------------ ------------
Cash and cash equivalents, end of year...... $ 1,005,275 $ 1,588,366 $ 7,684,991
=========== ============ ============
</TABLE>

See accompanying notes to consolidated financial statements.
F-9
<PAGE> 172

CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description Of Business

Citadel Broadcasting Company was formed August 21, 1991 as a Nevada
corporation and is a wholly-owned subsidiary of Citadel Communications
Corporation ("Citadel Communications"). Citadel License Inc. ("Citadel License")
is a wholly-owned subsidiary of Citadel Broadcasting Company. Citadel
Broadcasting Company and its subsidiary own and operate radio stations and hold
Federal Communications Commission ("FCC") licenses in Arkansas, California,
Colorado, Illinois, Montana, Nevada, New Mexico, Oregon, Pennsylvania, Rhode
Island, Utah and Washington.

Principles of Consolidation And Presentation

The accompanying consolidated financial statements include Citadel
Broadcasting Company and its wholly-owned subsidiary ("Company"). All
significant intercompany balances and transactions have been eliminated in
consolidation.

Use of Estimates

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of
three months or less at the time of purchase to be cash equivalents.

Derivative Financial Instruments

The Company uses an interest rate swap agreement to hedge the effects of
fluctuations in interest rates. Amounts receivable or payable under the interest
rate swap agreement are recognized as interest expense or income.

Property and Equipment

Assets acquired in business combinations accounted for using the purchase
method of accounting are recorded at their estimated fair value upon acquisition
as determined by management or by independent appraisal. Property and equipment
additions are recorded at cost. Depreciation of property and equipment is
determined using the straight-line method over the estimated useful lives of the
related assets.

Intangible Assets

Intangible assets with determinable lives have been allocated among various
categories of customer-based or market-based intangibles at their estimated fair
value upon acquisition as determined by management or by independent appraisal.
Goodwill represents the excess of cost over the fair value of tangible assets
and intangible assets with determinable lives. Amortization is provided on the
straight-line method over the estimated useful lives of the related assets (see
note 5). The Company's policy is to write-off intangible assets once they have
become fully amortized. The useful lives and recoverability of intangible assets
are evaluated at least annually. This evaluation encompasses the undiscounted
historical broadcast cash flow of each station and

F-10
<PAGE> 173
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

existing broadcast cash flow multiples for sales of similar radio properties to
estimate the potential selling price for the station and, therefore,
recoverability of the assets.

Barter Transactions

Barter contracts are agreements entered into under which the Company
provides commercial air time in exchange for goods and services used principally
for promotional, sales and other business activities. An asset and liability are
recorded at the fair market value of the goods or services received. Revenue is
recorded and the liability is relieved when commercials are broadcast and
expense is recorded and the asset is relieved when goods or services are used.

Income Taxes

The Company utilizes the asset and liability method of accounting for
income taxes as if it were a separate taxpayer. Under the asset and liability
method, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date. The Company is included in the
consolidated tax returns of its parent company, Citadel Communications.

Income (Loss) Per Share of Common Stock

In February 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 128, "Earnings per Share" ("SFAS No. 128"). This statement establishes
standards for computing and presenting earnings per share ("EPS"), and
supersedes APB Opinion No. 15. The Statement replaces primary EPS with basic EPS
and requires dual presentation of basic and diluted EPS. All prior period EPS
data has been restated to conform to SFAS No. 128. The basic and diluted per
share effect of the extraordinary loss on extinguishment of debt in 1996 was
$(44) and $(44), respectively.

Revenue Recognition

Revenue is recognized as commercials are broadcast.

Local Marketing Agreements

Fees earned or incurred pursuant to various local marketing agreements
("LMA") are recognized as gross broadcasting revenue or station operating
expenses, respectively, in the period that the services performed or received
occur. The Company's consolidated financial statements include broadcasting
revenues and station operating expenses of stations marketed under LMA's.

Joint Sales Agreements

Fees earned or incurred pursuant to various joint sales agreements ("JSA")
are recognized pursuant to the terms in the various agreements under one of two
methods: (a) the JSA fee is recognized as a reduction to sales expense (included
in station operating expenses in the Company's consolidated statement of
operations), or (b) the Company is allocated a percentage of the JSA stations'
net revenue and operating expenses and these amounts are recognized as
broadcasting revenue and station operating expenses, respectively, in the period
earned or incurred.

F-11
<PAGE> 174
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

Business and Credit Concentrations

In the opinion of management, credit risk with respect to receivables is
limited due to the large number of customers and the geographic diversification
of the Company's customer base. The Company performs credit evaluations of its
customers and believes that adequate allowances for any uncollectible
receivables are maintained. At December 31, 1996 and 1997, no receivable from
any customer exceeded five percent of gross accounts receivable nor did any
customer's account exceed more than ten percent of net broadcasting revenue for
any of the periods presented.

Long-Lived Assets

In March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("SFAS No.
121"), which requires impairment losses to be recorded on long-lived assets used
in operations when indicators of impairment are present and the undiscounted
cash flows estimated to be generated by those assets are less than the assets'
carrying amount. SFAS No. 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. The Company adopted SFAS No. 121 in
the first quarter of the year ended December 31, 1996 and this adoption did not
have a material impact on the consolidated financial statements.

Reclassifications

Certain 1995 and 1996 balances have been reclassified to conform to the
1997 presentation.

(2) ACQUISITIONS AND DISPOSITIONS

1995 Dispositions

On February 15, 1995, the Company sold the assets of KBOZ-AM, KBOZ-FM and
KATH-FM, and KCTR-FM, KDWG-AM, and KKBR-FM in Bozeman and Billings, Montana,
respectively, for $5,400,000. A gain of approximately $800,000 was recognized on
the sale.

1996 Acquisitions

During 1996, the Company acquired the assets of five FM and one AM radio
stations from various parties as follows:

<TABLE>
<CAPTION>
PURCHASE
ACQUISITION DATE STATION MARKET SERVED PRICE
- ------------------------ --------------- --------------------- -----------
<S> <C> <C> <C>
June 28, 1996........... KHFM-FM/KHFN-AM Albuquerque, NM $ 5,500,000
June 28, 1996........... KASY-FM Albuquerque, NM 5,000,000
June 28, 1996........... KDJK-FM Modesto, CA 5,010,000
October 1, 1996......... KKLI-FM Colorado Springs, CO 3,450,000
October 9, 1996......... KRST-FM Albuquerque, NM 20,000,000
</TABLE>

F-12
<PAGE> 175
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

The acquisitions were accounted for by the purchase method of accounting
and, accordingly, the purchase price was allocated to current assets as well as
noncurrent tangible and intangible assets based on their fair values as
determined by management or by independent appraisal. The acquisitions were
funded with the proceeds from new notes payable and a securities purchase and
exchange agreement. The purchase price, including acquisition costs of $782,881,
was allocated as follows:

<TABLE>
<S> <C>
Property and equipment................................ $ 2,446,594
Intangible assets..................................... 37,135,955
Accounts receivable................................... 160,332
-----------
$39,742,881
===========
</TABLE>

F-13
<PAGE> 176
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

1997 Acquisitions and Pending Dispositions

Acquisitions

During 1997, the Company acquired the assets of 44 FM and 17 AM radio
stations from various parties as follows:

<TABLE>
<CAPTION>
MARKET PURCHASE
ACQUISITION DATE STATION SERVED PRICE
- --------------------- ---------------- --------------------- ------------
<S> <C> <C> <C>
January 1, 1997...... KCTR-FM/KDWG-AM/ Billings, MT $ 26,008,357
KKBR-FM/KBBB-FM/
KMHK-FM
KUGN-AM/KUGN-FM/ Eugene, OR
KEHK-FM
KAKT-FM/KBOY-FM/ Medford, OR
KCMX-AM/KCMX-FM/
KTMT-AM/KTMT-FM
KEYW-FM/KFLD-AM/ Tri-Cities, WA
KORD-FM/KXRX-FM
February 14, 1997.... KENZ-FM Salt Lake City, UT 5,590,119
April 10, 1997....... KBER-FM Salt Lake City, UT 7,760,000
July 3, 1997......... WPRO-AM/WPRO-FM/ Providence, RI 115,795,216
WSKO-AM/WWLI-FM
WQCY-FM/WMOS-FM/ Quincy, IL
WTAD-AM/WBRJ-FM
WQWK-FM/WIKN-FM/ State College, PA
WRSC-AM/WBLF-AM
WGLU-FM/WQKK-FM Johnstown, PA
WRKZ-FM Harrisburg, PA
WQXA-AM/WQXA-FM York, PA
WCTO-FM/WEST-AM Allentown, PA
WMGS-FM/WARM-AM/ Wilkes-Barre, PA
WZMT-FM/WAZL-AM
July 17, 1997........ KNHK-FM Reno, NV 1,300,000
September 25, 1997... KTHK-FM Tri-Cities, WA 600,500
September 29, 1997... WXEX-FM, Edgenet Providence, RI 4,250,000
October 15, 1997..... KARN-AM/KARN-FM/ Little Rock, AR 9,000,000
KKRN-FM/KRNN-AM/
KAFN-FM
October 15, 1997..... KIPR-FM Little Rock, AR 5,544,506
October 15, 1997..... Land and Little Rock, AR 3,001,537
Buildings
October 15, 1997..... KOKY-FM Little Rock, AR 7,354,860
October 21, 1997..... WLEV-FM Allentown, PA 23,000,000
October 24, 1997..... KBEE-FM/KFNZ-AM Salt Lake City, UT 2,867,092
November 4, 1997..... KLAL-FM Little Rock, AR 1,500,000
November 4, 1997..... KURB-FM/KVLO-FM/ Little Rock, AR 12,000,000
KLIH-FM
November 18, 1997.... WHKK-FM Providence, RI 3,999,310
</TABLE>

F-14
<PAGE> 177
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

<TABLE>
<S> <C>
Cash................................................. $ 877,693
Accounts receivable.................................. 4,473,441
Prepaid expenses..................................... 706,402
Property and equipment............................... 21,203,071
Intangible assets.................................... 208,964,226
Other assets......................................... 10,100
Accounts payable and accrued liabilities............. (3,084,549)
Current maturities of other long-term obligations.... (649,931)
------------
$232,500,453
============
</TABLE>

Pro Forma

The following summary, prepared on a pro forma basis, presents the results
of operations as if all the above noted radio stations had been acquired as of
January 1, 1996, after including the impact of the amortization of intangible
assets, depreciation of fixed assets and increased interest expense on the
acquisition debt since the date of acquisition.

<TABLE>
<CAPTION>
UNAUDITED
---------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1997
------------ ------------
<S> <C> <C>
Net broadcasting revenue............... $106,683,000 $117,154,000
Operating income....................... 2,212,000 6,988,000
Net loss............................... (17,395,000) (12,990,000)
</TABLE>

The pro forma results are not necessarily indicative of what actually would
have occurred if the radio stations had been owned for the entire periods
presented. In addition, they are not intended to be a projection of future
results and do not reflect any synergies that might be achieved from combined
operations.

Pending Dispositions

On September 29, 1997, the Company entered into an asset purchase agreement
to sell substantially all of the assets of radio stations WQKK-FM and WGLU-FM in
Johnstown, Pennsylvania and radio stations WRSC-AM, WQWK-FM, WBLF-AM and WIKN-FM
in State College, Pennsylvania. The disposition is pending approval by the
Federal Communications Commission.

(3) NOTE RECEIVABLE

During 1996 the Company made various advances to Deschutes, a non-related
party, to allow Deschutes to acquire various radio stations and payoff existing
debt, in conjunction with the acquisition of Deschutes by Citadel
Communications. These advances were funded through borrowings the Company made
on the Senior Credit Facility and advances from its parent

F-15
<PAGE> 178
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

company. As of December 31, 1996, $18,251,402 was due under these advances; of
this amount, approximately $8,600,000 was included in note payable to parent
company.

During 1997 the Company acquired Deschutes in a stock-based acquisition.
The note receivable at December 31, 1996 was included in the purchase price
allocation during 1997, resulting in the elimination of the note receivable in
1997.

(4) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1996 and 1997 consists of the
following:

<TABLE>
<CAPTION>
ESTIMATED
1996 1997 USEFUL LIFE
----------- ----------- -----------
<S> <C> <C> <C>
Land........................................ $ 569,638 $ 3,269,025 --
Buildings and improvements.................. 1,217,287 5,726,701 5-30 years
Transmitters, towers and equipment.......... 15,509,084 29,053,049 5-15 years
Office furniture and equipment.............. 3,268,426 5,615,833 3-5 years
Construction in progress.................... 577,289 736,620 --
----------- -----------
21,141,724 44,401,228
Less accumulated depreciation and
amortization.............................. (5,933,155) (9,158,944)
----------- -----------
$15,208,569 $35,242,284
=========== ===========
</TABLE>

(5) INTANGIBLE ASSETS

Intangible assets at December 31, 1996 and 1997 consist of the following:

<TABLE>
<CAPTION>
ESTIMATED
1996 1997 USEFUL LIFE
------------ ------------ ----------------
<S> <C> <C> <C>
Goodwill................................ $ 28,925,936 $119,226,136 15 years
Broadcast licenses...................... 26,262,983 162,626,295 15 years
Noncompetition agreements............... 5,168,854 1,858,593 3-5 years
Local marketing agreements.............. 1,909,998 -- 5 years
Presold commercials..................... 496,380 -- less than 1 year
Premium lease space..................... 161,787 161,787 1-13 years
On-air talent contracts................. 1,383,323 -- 1-3 years
Subcarrier antenna income............... 219,162 100,878 1-4 years
Programming contracts................... 503,000 3,000 3 years
------------ ------------
65,031,423 283,976,689
Less accumulated amortization........... (13,229,588) (15,287,173)
------------ ------------
$ 51,801,835 $268,689,516
============ ============
</TABLE>

F-16
<PAGE> 179
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(6) ACCRUED LIABILITIES

Accrued liabilities at December 31, 1996 and 1997 consist of the following:

<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
Interest........................................... $ -- $5,118,735
Music license fees................................. 245,715 209,734
Compensation and commissions....................... 1,237,392 2,082,492
Other.............................................. 818,609 1,649,168
---------- ----------
$2,301,716 $9,060,129
========== ==========
</TABLE>

(7) NOTES PAYABLE

Notes payable at December 31, 1996 and 1997 consist of the following:

<TABLE>
<CAPTION>
1996 1997
----------- -----------
<S> <C> <C>
Note payable to financial institution (Senior
Credit Facility), interest payable at the LIBOR
rate (5.78% at December 31, 1996 and 5.72% at
December 31, 1997) plus 2.75%, principal due
only when required by the loan agreement, in
quarterly amounts through September 30, 2003,
at which time all outstanding amounts are due
in full, subject to optional prepayments....... $77,584,060 $90,084,059
Less current maturities.......................... 2,500,000 --
----------- -----------
Long-term portion................................ $75,084,060 $90,084,059
=========== ===========
</TABLE>

On July 3, 1997, the Company entered into a revised financing agreement
(the "Senior Credit Facility") which allows for revolving loan borrowings up to
a maximum of $150,000,000. Per the agreement, this amount is subject to
reduction starting December 31, 1997 and continuing quarterly thereafter. The
maximum available loan commitment at December 31, 1997 was $147,500,000. The
Company must pay, on a quarterly basis, an unused commitment fee equal to the
maximum revolving loan commitment less the average of the outstanding principal
balance for the preceding quarter, multiplied by .125% or if the total leverage
ratio (as defined in the agreement) calculated as of the last day of the
preceding quarter was less than 4.5, the commitment fee is .09375%. Commitment
fees paid in 1996 and 1997 were $74,931 and $380,295, respectively. The
agreement requires that the Company enter into an interest rate swap agreement
for a period of at least two years. See note 21 for information on the interest
rate swap agreement. Principal payments are not scheduled to commence until the
outstanding principal balance exceeds the maximum loan commitment adjusted by
quarterly mandatory commitment reductions (as defined in the agreement).

The Senior Credit Facility is secured by a pledge of property and equipment
and the common stock of the Company. Various debt covenants place restrictions
on, among other things, indebtedness, acquisitions, dividends, capital
expenditures and the sale or transfer of assets and provide for certain minimum
operating cash flows for the Company. The debt covenant provisions also include
certain financial ratio covenants, the most restrictive in nature being; initial
total debt to adjusted operating cash flow 6.75 times, initial total senior
debt to adjusted operating cash flow 6.75 times and consolidated operating
cash flow to interest expense and cash dividends on the Exchangeable Preferred
Stock > 1.75 times. At December 31, 1997, the Company was in compliance with all
debt covenant provisions.

F-17
<PAGE> 180
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

The required aggregate principal payments as of December 31, 1997,
excluding the consideration of any payments required based upon annual excess
cash flow (as defined), are as follows:

<TABLE>
<S> <C>
2001.......................................... $23,209,059
2002.......................................... 30,500,000
Thereafter.................................... 36,375,000
-----------
$90,084,059
===========
</TABLE>

(8) SENIOR SUBORDINATED NOTES PAYABLE

On July 3, 1997, the Company completed the issuance of $101 million of
10-1/4% Senior Subordinated Notes ("Notes") due 2007. Interest is payable
semi-annually. The Notes will be redeemable at the option of the Company, in
whole or in part, at any time on or after July 1, 2002. In addition, at any time
prior to July 1, 2000, subject to certain conditions, the Company may, at its
option, redeem a portion of the Notes with the net proceeds of one or more
Public Equity Offerings (as defined in the indenture governing the Notes), at a
redemption price equal to 110.25% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date of redemption. The Notes are shown net
of unamortized discount of $2,668,883 at December 31, 1997.

The indenture governing the Notes contains certain restrictive covenants,
including limitations which restrict the ability of the Company to incur
additional debt, incur liens, pay dividends or make certain other restricted
payments, consummate certain asset sales, enter into certain transactions with
affiliates, merge or consolidate with any other person or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets. At December 31, 1997, the Company was in compliance with all debt
covenants.

(9) OTHER LONG-TERM OBLIGATIONS

Other long-term obligations at December 31, 1996 and 1997 consist of the
following:

<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
Various noncompetition and consulting agreements
with the sellers of radio stations acquired, due
at various dates through July 2003, face amount
of $486,113 and $437,503 at December 31, 1996 and
1997, respectively, non-interest bearing with
interest imputed at 8.5% to 9.0%, net of discount
of $54,540 and $29,640 in 1996 and 1997,
respectively..................................... $ 431,573 $ 407,863
Prepayment premium on extinguishment of debt (a)... 881,818 770,779
Capital leases..................................... -- 105,359
---------- ----------
1,313,391 1,284,001
Less current maturities............................ 435,791 271,352
---------- ----------
Long-term portion.................................. $ 877,600 $1,012,649
========== ==========
</TABLE>

F-18
<PAGE> 181
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

The required aggregate principal payments as of December 31, 1997,
excluding the amortization of debt discount are as follows:

<TABLE>
<S> <C>
1998........................................... $ 271,352
1999........................................... 321,843
2000........................................... 138,648
2001........................................... 132,363
2002........................................... 127,694
Thereafter..................................... 292,101
----------
$1,284,001
==========
</TABLE>

- ---------------

(a) On October 9, 1996, the Company extinguished its long-term debt of
$31,310,385, payable to a financial institution, and its note payable to a
related party of $7,000,000. The early retirement of the long-term debt
resulted in a $1,769,000 extraordinary loss due to prepayment premiums and
the write-off of debt issuance costs. The prepayment premium can be reduced
on a quarterly basis depending on the outstanding balance of the Senior
Credit Facility. The balance of the prepayment premium is due upon the
repayment of the Senior Credit Facility.

(10) LEASE COMMITMENTS

The Company leases certain tower sites, transmitters and equipment,
automobiles, office equipment and an airplane. The following is a schedule by
year of future minimum rental payments required under operating leases that have
an initial or remaining noncancelable lease term in excess of one year as of
December 31, 1997:

<TABLE>
<S> <C>
1998.......................................... $ 2,030,301
1999.......................................... 1,939,314
2000.......................................... 1,874,159
2001.......................................... 1,859,330
2002.......................................... 1,457,545
Thereafter.................................... 5,357,157
-----------
$14,517,806
===========
</TABLE>

Total rental expense was $744,395, $1,101,237 and $1,971,774 for the years
ended December 31, 1995, 1996 and 1997, respectively.

(11) INCOME TAXES

The Company is included in the consolidated tax returns of Citadel
Communications and calculates its tax provision or benefit as though it filed a
separate return. For the years ended December 31, 1995, 1996 and 1997, the
Company generated a net loss for both financial reporting and income tax
purposes; therefore, no current tax provision has been recorded. The deferred
income tax benefit in 1997 represents the reversal of deferred tax liabilities
established at the date of acquisition due to differences in the tax basis and
the financial statement carrying amounts of intangibles and fixed assets
acquired in stock-based acquisitions. At December 31, 1997, Citadel
Communications has net operating loss carryforwards for federal income tax
purposes of approximately $18,800,000 which begin to expire in 2007.

On June 28, 1996, Citadel Communications underwent an ownership change in
accordance with Section 382 of the Internal Revenue Code. Due to this change,
the net operating losses of
F-19
<PAGE> 182
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

Citadel Communications are subject to limitation in future years. The
approximate amount of the net operating loss which may be used in any one year
is $4,400,000.

The reconciliation of the expected income tax benefit calculated at the
U.S. federal statutory rate to the actual income tax benefit per the financial
statements for the years ended December 31, 1995, 1996 and 1997 is as follows:

<TABLE>
<CAPTION>
1995 1996 1997
----------- --------- -----------
<S> <C> <C> <C>
U.S. federal statutory rate applied to the loss
before income taxes and extraordinary item... $(1,487,717) $(679,046) $(1,856,480)
Amortization of goodwill....................... 16,563 186,844 425,344
Nondeductible meals and entertainment.......... 19,786 31,601 51,495
Net operating losses providing no current
benefit for federal income tax purposes...... 1,467,025 458,101 680,040
Other.......................................... (15,657) 2,500 (69,972)
----------- --------- -----------
Deferred income tax benefit.................... $ -- $ -- $ (769,573)
=========== ========= ===========
</TABLE>

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets, liabilities and the valuation allowance are
as follows:

<TABLE>
<CAPTION>
1996 1997
----------- ------------
<S> <C> <C>
Deferred tax assets:
Receivables, principally due to valuation allowances... $ 248,422 $ 323,577
Net operating loss carryforwards....................... 6,720,659 7,520,705
Accrued liabilities not deductible..................... 18,465 193,423
----------- ------------
Total deferred tax assets........................... 6,987,546 8,037,705
Valuation allowance.................................... (4,270,206) (5,109,187)
----------- ------------
Net deferred tax assets............................. 2,717,340 2,928,518
----------- ------------
Deferred tax liabilities:
Property and equipment, principally due to accelerated
depreciation........................................ (1,883,269) (2,928,218)
Intangible assets; differences in book and tax
amortization........................................ (834,071) (300)
Differences between the tax basis and fair value of
intangibles and fixed assets acquired............... (1,585,333) (23,270,338)
----------- ------------
Total deferred tax liabilities...................... (4,302,673) (26,198,856)
----------- ------------
Net deferred tax liability............................... $(1,585,333) $(23,270,338)
=========== ============
</TABLE>

The valuation allowance was decreased by $2,320,699 in 1996 and increased
by $838,981 in 1997. The Company has established a valuation allowance for the
amount of the net deferred tax asset which management has determined that it is
more likely than not will not be realized.

(12) EXCHANGEABLE PREFERRED STOCK

On July 3, 1997, the Company completed the sale of 1,000,000 shares of
Series A Exchangeable Preferred Stock (Exchangeable Preferred Stock) for $100
million. The Exchangeable Preferred Stock has a liquidation preference of $100
per share, plus accumulated and unpaid dividends. Dividends on the Exchangeable
Preferred Stock accrue at the rate of 13-1/4% per annum. All dividends will be
payable semi-annually on January 1 and July 1 of each year, commencing January
1, 1998. On or prior to July 1, 2002, dividends are payable in additional shares
of

F-20
<PAGE> 183
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

Exchangeable Preferred Stock having an aggregate liquidation preference equal to
the amount of such dividends, or, at the option of the Company, in cash.
Thereafter, all dividends will be payable only in cash. The Company will be
required to redeem the Exchangeable Preferred Stock on July 1, 2009 (subject to
the legal availability of funds therefor) at a redemption price equal to the
liquidation preference thereof, plus accumulated and unpaid dividends, if any,
to the date of redemption.

The Exchangeable Preferred Stock is presented net of unamortized issuance
costs of $4,541,858, and includes accrued dividends at December 31, 1997 of
$6,551,389, which were paid in 65,513.89 additional shares of exchangeable
preferred stock on January 1, 1998.

The Certificate of Designation for the Exchangeable Preferred Stock
contains certain covenants, which, among other things, restrict the ability of
the Company with respect to: (i) the incurrence of additional debt; (ii)
restricted payments; (iii) issuances and sales of stock of certain subsidiaries;
and (iv) consolidations, mergers or sales of assets. The Company was in
compliance with these covenants at December 31, 1997.

(13) CITADEL COMMUNICATIONS FINANCIAL DATA

The operations of Citadel Communications (the parent company) include the
issuance of convertible preferred stock and obtaining a credit facility
including a revolving line of credit of $20 million, the proceeds of which were
advanced to the Company. Interest was charged on these advances in an amount
equal to the interest costs of Citadel Communications. In conjunction with the
Company's refinancing of Notes, the revolving line of credit was terminated in
1997. There are no other costs or expenses of Citadel Communications.

Advances from Citadel Communications, other than those representing draws
on the revolving line of credit of Citadel Communications, are recorded as
capital contributions from the parent company and are presented as additional
paid-in capital in the consolidated balance sheets.

On January 1, 1997, in a non-cash transaction, the Company transferred
$9,123,310 of debt under the Senior Credit Facility to Deschutes which reduced
the corresponding note receivable. In addition, on June 20, 1997, Citadel
Communications transferred the ownership of Deschutes to the Company. Interest
paid to Citadel Communications by the Company for the year ended December 31,
1997 amounted to $568,534.

F-21
<PAGE> 184
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

The following is summary consolidated financial data for Citadel
Communications and its subsidiaries, including the Company:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1996 1997
------------ ------------
<S> <C> <C>
Consolidated Balance Sheets:
Current assets....................................... $ 14,502,740 $ 35,926,371
Property and equipment, net.......................... 15,208,569 35,242,284
Note receivable...................................... 18,251,402 --
Intangible assets, net............................... 51,801,835 268,689,516
Other assets......................................... 2,550,778 4,314,123
------------ ------------
Total assets...................................... $102,315,324 $344,172,294
============ ============
Notes payable to related parties..................... $ 11,817,000 $ --
Other current liabilities............................ 6,880,942 13,332,675
------------ ------------
Total current liabilities......................... 18,697,942 13,332,675
Notes payable, less current maturities............... 75,084,060 90,084,059
Senior subordinated notes payable.................... -- 98,331,117
Other liabilities.................................... 2,462,933 24,282,987
Exchangeable preferred stock......................... -- 102,009,531
Shareholders' equity................................. 6,070,389 16,131,925
------------ ------------
Total liabilities and shareholders' equity........ $102,315,324 $344,172,294
============ ============
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1996 1997
------------ ------------
<S> <C> <C>
Consolidated Statements of Operations:
Net broadcasting revenue............................. $ 45,412,806 $ 89,803,270
Operating income..................................... $ 3,744,323 $ 6,367,016
Interest expense..................................... 6,155,472 12,872,515
Other (income) expense, net.......................... (413,955) (451,173)
------------ ------------
Loss before income taxes and extraordinary item...... (1,997,194) (6,054,326)
Deferred income tax (benefit)........................ -- (769,573)
Extraordinary loss on extinguishment of debt......... (1,769,000) --
------------ ------------
Net loss............................................... $ (3,766,194) $ (5,284,753)
============ ============
Dividend requirement for exchangeable preferred
stock................................................ $ -- $ 6,632,939
============ ============
</TABLE>

(14) CITADEL LICENSE FINANCIAL DATA

The operations of Citadel License, a wholly-owned subsidiary of the
Company, include holding FCC licenses for all stations owned by the Company and
the amortization of these licenses. Citadel License has guaranteed the Senior
Subordinated Notes (see note 8). The guarantee is full, unconditional and joint
and several. The separate financial statements of Citadel License have not been
presented because management of the Company has determined they would not be
material to investors. There are no costs or expenses of Citadel License that
are borne by Citadel Broadcasting Company.

F-22
<PAGE> 185
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

The following is summary financial data for Citadel License:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1996 1997
----------- ------------
<S> <C> <C>
Balance Sheets:
Intangible assets, net (broadcast licenses)........... $24,035,920 $137,073,551
Other assets.......................................... 5,147 2,048
----------- ------------
Total assets....................................... $24,041,067 $137,075,599
=========== ============
Shareholder's equity.................................. 24,041,067 137,075,599
----------- ------------
Total liabilities and shareholder's equity......... $24,041,067 $137,075,599
=========== ============
Statements of Operations:
Amortization expense.................................. 991,901 5,267,872
----------- ------------
Net loss........................................... $ (991,901) $ (5,267,872)
=========== ============
</TABLE>

At present, Citadel License is the only subsidiary of the Company.

(15) DEFINED CONTRIBUTION PLAN

The Company has a defined contribution 401(k) plan for all employees who
are at least 21 years of age and have worked at least 1,000 hours in the year.
Under the 401(k) plan, employees can contribute up to 20% of their compensation,
subject to the maximum contribution allowed by the Internal Revenue Code.
Participants vest immediately in their contributions. The Company may make
discretionary contributions as approved by the Board of Directors. Participants'
rights to amounts contributed by the Company vest on a graded schedule over a
five-year period. During 1995, 1996, and 1997 the Company contributed $133,215,
$143,192 and $298,623, respectively, which represented a two percent matching of
employee contributions to the 401(k) plan.

(16) TRANSACTIONS WITH RELATED PARTIES
SALE--LEASEBACK

On December 29, 1995, the Company entered into a sale-leaseback transaction
with the principal shareholder of Citadel Communications. The Company sold an
airplane for its fair value of $1,275,000 to the shareholder resulting in a loss
of $74,327. The operating lease commenced on December 29, 1995 with monthly
payments of $17,250 due through December 31, 2001.

CONSULTING ARRANGEMENT

During the fiscal year ended December 31, 1996, a director of the Company
from 1996 to November 1997, provided financial consulting services to the
Company for which he was paid $83,520. On June 28, 1996, he was also granted an
option to purchase 12,000 shares of Common Stock at an exercise price of $5.72
per share. Such option is fully vested. The Company believes that such services
were provided to the Company on terms at least as favorable to the Company as
could have been obtained generally from unaffiliated parties.

F-23
<PAGE> 186
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

LEGAL SERVICES

During each of the fiscal years ended December 31, 1995 and 1996, the
Company retained a law firm to represent the Company on various matters. A
shareholder of such firm was also a director of the Company in such years.

CITADEL COMMUNICATIONS STOCK OPTION PLAN

On June 28, 1996, Citadel Communications adopted the 1996 Equity Incentive
Plan ("Plan") pursuant to which the Board of Directors may grant stock options
to officers, employees and related parties. The Plan, which was subsequently
amended, as of March 31, 1998, authorizes grants of options to purchase up to
1,577,646 shares of authorized but unissued common stock which excludes those
options granted prior to the adoption of the Plan. Stock options are granted
with an exercise price equal to the common stock's fair market value at the date
of grant or such other exercise price as determined by the Board of Directors.
Stock options granted generally vest ratably over a five-year period, commencing
one year after the date of grant and expire on the earlier of ten years from the
date granted or termination of employment, or they will vest immediately, as
determined by the Board of Directors at the date of grant.

(17) LOCAL MARKETING AGREEMENTS

At December 31, 1997, the Company has local marketing agreements to market
stations WBHT-FM, WKQV-FM, WEMR-AM, WEMR-FM, WSGD-FM, WDLS-FM and WCDL-AM in
Wilkes-Barre/Scranton, Pennsylvania and stations KIZN-FM, KZMG-FM, KKGL-FM,
KQFC-FM and KBOI-AM in Boise, Idaho. The agreements principally provide for the
Company to supply specified programming to the brokered stations and enable the
sales staff of the Company to sell advertising time on the stations for fixed
fees to be paid by the Company. The agreements also provide the Company with the
option to purchase the stations. The Company's financial statements include the
broadcasting revenue and station operating expenses of the brokered stations.

The local marketing agreements enable the Company to extend or terminate
the agreements at the Company's option through August 1, 2002. The fees paid
under the local marketing agreements amounted to $350,000, $1,414,527 and
$1,936,139 for the years ended December 31, 1995, 1996 and 1997, respectively.

(18) JOINT SALES AGREEMENTS

On January 15, 1996, the Company entered into a joint sales agreement (JSA)
to sell advertising for radio stations KEYF-AM/FM, KUDY-AM and KKZX-FM in
Spokane, Washington and radio stations KVOR-AM, KSPZ-FM, KTWK-AM, and KVUU-FM in
Colorado Springs, Colorado. As stated in the JSA agreement, JSA revenue is
calculated as 60% of the broadcast cash flows of these radio stations and all
Company owned radio stations in these markets, with the exception of KKLI in
Colorado Springs which is not included in the JSA calculation.

On April 22, 1996, the Company entered into a JSA for radio station KENZ-FM
in Salt Lake City, Utah. The Company's financial statements include all sales
expenses for the station as well as revenue for the JSA fee calculated at 30% of
net revenue of the station. On February 14, 1997 the Company acquired KENZ-FM.

On July 3, 1997, the Company acquired all of the issued and outstanding
capital stock of Tele-Media Broadcasting Company ("Tele-Media"). As a result of
this acquisition, the Company
F-24
<PAGE> 187
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

assumed a Tele-Media JSA for radio station WKQV-AM in Wilkes-Barre/Scranton,
Pennsylvania. As stated in the JSA agreement, JSA revenue is calculated as the
sum of (i) a base monthly payment of $5,000, and (ii) an additional monthly fee
ranging from 5% to 8% of revenues (as defined in the JSA agreement) based on
monthly revenues of WKQV-AM and of its simulcast station, WARM-AM.

(19) SUPPLEMENTAL FINANCIAL INFORMATION

The Company paid cash of $5,237,240, $7,065,546 and $6,703,052 for interest
for the years ended December 31, 1995, 1996 and 1997, respectively.

Barter revenue included in gross broadcasting revenue and barter expenses
included in station operating expenses amounted to $3,087,871, $3,335,024 and
$7,388,471, and $3,214,284, $3,029,665 and $7,062,822, for the years ended
December 31, 1995, 1996 and 1997, respectively.

A summary of additions and deductions related to the allowance for doubtful
accounts receivable for the years ended December 31, 1995, 1996 and 1997
follows:

<TABLE>
<CAPTION>
BALANCE AT
BEGINNING OF BALANCE AT
PERIOD ADDITIONS DEDUCTIONS END OF PERIOD
------------ --------- ---------- -------------
<S> <C> <C> <C> <C>
Year ended December 31, 1995... $380,531 484,702 (350,700) 514,533
Year ended December 31, 1996... 514,533 421,378 (314,857) 621,054
Year ended December 31, 1997... 621,054 1,016,375 (828,487) 808,942
</TABLE>

(20) LITIGATION

The Company is involved in certain legal actions and claims arising in the
ordinary course of business. Management believes that such litigation and claims
will be resolved without a material effect on the Company's financial position.

The Company has received two civil investigative demands ("CIDs") from the
Antitrust Division of the U.S. Department of Justice. One CID addresses the
Company's acquisition of station KRST in Albuquerque, New Mexico and the second
CID addresses the joint sales agreement for stations in Spokane, Washington and
Colorado Springs, Colorado. The Company has provided the requested information
in response to each CID, and at present has been given no indication from the
Department of Justice regarding its intended future actions.

(21) FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments," requires that the Company disclose
estimated fair values for its financial instruments. The following summary
presents a description of the methodologies and assumptions used to determine
such amounts.

Limitations

Fair value estimates are made at a specific point in time and are based on
relevant market information and information about the financial instrument; they
are subjective in nature and involve uncertainties, matters of judgment and,
therefore, cannot be determined with precision. These estimates do not reflect
any premium or discount that could result from offering for sale at one time the
Company's entire holdings of a particular instrument. Changes in assumptions
could significantly affect these estimates.

F-25
<PAGE> 188
CITADEL BROADCASTING COMPANY
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

Since the fair value is estimated as of December 31, 1996 and 1997, the
amounts that will actually be realized or paid at settlement or maturity of the
instruments could be significantly different.

Cash Equivalents and Cash Held in Escrow

The carrying amount is assumed to be the fair value because of the
liquidity of these instruments.

Accounts Receivable and Notes Receivable

The carrying amount is assumed to be the fair value because of the
short-term maturity of the portfolio. The carrying amount of the non-current
note receivable is assumed to be the fair value because the note receivable was
converted by Citadel Communications into a portion of the purchase price of
Deschutes on January 1, 1997 at the carrying value.

Accounts Payable and Accrued Liabilities

The carrying amount approximates fair value because of the short-term
maturity of these instruments.

Notes payable, senior subordinated notes, exchangeable preferred stock, notes
payable to parent company and other long-term obligations

The fair value of the Company's notes payable, senior subordinated notes,
exchangeable preferred stock, notes payable to parent company and other
long-term obligations approximate the terms in the marketplace at which they
could be replaced. Therefore, the fair value approximates the carrying value of
these financial instruments.

In 1996, the Company entered into an interest rate swap agreement with a
financial institution in accordance with the terms of its Senior Credit
Facility. The fair value of the interest rate swap as of December 31, 1996 and
1997 was $190,000 and $3,700, respectively, as determined by the financial
institution, and represents an unrealized gain. The fair value of the interest
rate swap is the estimated amount that the financial institution would receive
or pay to terminate the swap agreement at the reporting date, taking into
account current interest rates and the current creditworthiness of the swap
counterparties.

(22) SUBSEQUENT EVENTS

On January 2, 1998, the Company acquired radio stations WEMR-AM and WEMR-FM
in Wilkes-Barre/Scranton, Pennsylvania for a purchase price of $815,000. The
acquisition will be accounted for by the purchase method of accounting.

On February 12, 1998, the Company acquired radio stations KQFC-FM, KKGL-FM
and KBOI-AM and a parcel of land in Boise, Idaho for an aggregate purchase price
of $14,400,000. The acquisition will be accounted for by the purchase method of
accounting. In conjunction with the acquisition, the Company borrowed an
additional $11,000,000 on its Senior Credit Facility.

On March 26, 1998, the Company acquired radio stations WSGD-FM, WDLS-FM and
WCDL-AM in Wilkes-Barre/Scranton, Pennsylvania for a purchase price of
$6,000,000. The acquisition will be accounted for by the purchase method of
accounting. In conjunction with the acquisition, the Company borrowed an
additional $6,000,000 on its Senior Credit Facility.

F-26
<PAGE> 189

CITADEL BROADCASTING COMPANY AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
SEPTEMBER 30,
DECEMBER 31, 1998
1997 (UNAUDITED)
------------ -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................ $ 7,684,991 $ 7,406,965
Cash held in escrow.............................. 718,561 --
Accounts receivable, less allowance for doubtful
accounts of $808,942 in 1997 and $1,280,553 in
1998.......................................... 25,744,137 31,808,518
Notes receivable from related parties............ 246,455 235,906
Prepaid expenses................................. 1,532,227 3,286,852
------------ ------------
Total current assets.......................... 35,926,371 42,738,241
Property and equipment, net........................ 35,242,284 36,833,719
Intangible assets, net............................. 268,689,516 290,405,370
Deposits for pending acquisitions.................. 650,000 --
Other assets....................................... 3,664,123 3,375,942
------------ ------------
$344,172,294 $373,353,272
============ ============
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable................................. $ 4,001,194 $ 3,032,234
Accrued liabilities.............................. 9,060,129 8,367,647
Current maturities of other long-term
obligations................................... 271,352 281,617
------------ ------------
Total current liabilities..................... 13,332,675 11,681,498
Notes payable, less current maturities............. 90,084,059 18,726,126
Senior subordinated notes payable.................. 98,331,117 98,460,823
Other long-term obligations, less current
maturities....................................... 1,012,649 1,011,050
Deferred tax liability............................. 23,270,338 25,306,162
Exchangeable preferred stock....................... 102,009,531 112,964,761
Shareholder's equity:
Common stock, $.001 par value; authorized 136,300
shares, issued and outstanding 40,000
shares........................................ 40 40
Additional paid-in capital....................... 42,296,316 138,243,294
Unrealized loss on hedging contract.............. -- (595,595)
Accumulated deficit.............................. (26,164,431) (32,444,887)
------------ ------------
Total shareholder's equity.................... 16,131,925 105,202,852
------------ ------------
$344,172,294 $373,353,272
============ ============
</TABLE>

See accompanying notes to consolidated financial statements.
F-27
<PAGE> 190

CITADEL BROADCASTING COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------------
1997 1998
----------- ------------
<S> <C> <C>
Gross broadcasting revenue........................... $66,516,801 $109,240,243
Less agency commissions............................ (6,491,983) (10,418,869)
----------- ------------
Net broadcasting revenue........................ 60,024,818 98,821,374
Operating expenses:
Station operating expenses......................... 43,305,951 69,411,775
Depreciation and amortization...................... 9,563,084 20,005,073
Corporate general and administrative............... 2,562,480 3,351,191
----------- ------------
Operating expenses......................... 55,431,515 92,768,039
Operating income..................................... 4,593,303 6,053,335
Nonoperating expenses (income):
Interest expense................................... 8,213,550 13,590,447
Other income, net.................................. (401,099) (94,149)
----------- ------------
Nonoperating expenses, net...................... 7,812,451 13,496,298
Income (loss) before income taxes.................... (3,219,148) (7,442,963)
Income tax (benefit)................................. (105,168) (1,162,507)
----------- ------------
Net income (loss).................................... (3,113,980) (6,280,456)
Dividend requirement for exchangeable preferred
stock.............................................. 3,275,693 10,822,375
----------- ------------
Net loss applicable to common shares................. $(6,389,673) $(17,102,831)
=========== ============
Basic and diluted net loss per common share.......... $ (159.74) $ (427.57)
=========== ============
Weighted average common shares outstanding........... 40,000 40,000
=========== ============
</TABLE>

See accompanying notes to consolidated financial statements.
F-28
<PAGE> 191

CITADEL BROADCASTING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1997 1998
----------- -----------
<S> <C> <C>
Net income (loss)...................... $(3,113,980) $(6,280,456)
Other comprehensive income:
Unrealized loss on hedging contract.... -- (595,595)
----------- -----------
Comprehensive income (loss)............ $(3,113,980) $(6,876,051)
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.
F-29
<PAGE> 192

CITADEL BROADCASTING COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
--------------------------------
1997 1998
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net loss......................................... $ (3,113,980) $ (6,280,456)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization................. 9,563,084 20,005,073
Amortization of debt issuance costs and debt
discounts................................... 138,352 479,620
Bad debt expense.............................. 603,558 886,873
Deferred tax benefit.......................... (105,168) (1,341,044)
Unrealized loss on interest rate swap......... -- (595,595)
Changes in assets and liabilities, net of
acquisitions:
Increase in accounts receivable and notes
receivable from related parties............... (5,388,399) (6,940,705)
Increase in prepaid expenses..................... (446,599) (1,751,373)
(Increase) decrease in other assets.............. (266,368) 1,293,436
Increase in accounts payable..................... (215,156) (968,960)
(Decrease) increase in accrued liabilities....... 3,367,485 (841,172)
------------- -------------
Net cash provided by operating activities..... 4,136,809 3,945,697
Cash flows from investing activities:
Capital expenditures............................. (1,478,410) (1,746,810)
Capitalized acquisition costs.................... (2,484,066) (1,963,106)
Cash paid to acquire stations.................... (128,187,024) (36,290,411)
Deposits for pending acquisitions................ (1,200,000) 650,000
------------- -------------
Net cash used in investing activities......... (133,349,500) (39,350,327)
Cash flows from financing activities:
Capital contribution from parent company......... 20,008 48,734
Advances from parent company..................... 1,000,000 --
Proceeds from notes payable...................... 12,000,000 34,999,999
Proceeds from senior subordinated notes
payable....................................... 97,250,000 --
Proceeds from issuance of exchangeable preferred
stock......................................... 96,850,000 --
Proceeds from initial public offering............ -- 116,513,904
Cash payment of initial public offering costs.... -- (9,642,586)
Principal payments on notes payable.............. (39,000,000) (106,357,932)
Principal payments on other long-term
obligations................................... (408,840) (346,259)
Principal payments on advances from parent
company....................................... (12,817,000) --
Payment of debt issuance costs................... -- (89,256)
Cost of issuance of exchangeable preferred
stock......................................... (569,997) --
------------- -------------
Net cash provided by financing activities..... 154,324,171 35,126,604
Net increase (decrease) in cash and cash
equivalents...................................... 25,111,480 (278,026)
Cash and cash equivalents, beginning of period..... 1,588,366 7,684,991
------------- -------------
Cash and cash equivalents, end of period........... $ 26,699,846 $ 7,406,965
============= =============
</TABLE>

See accompanying notes to consolidated financial statements.
F-30
<PAGE> 193

CITADEL BROADCASTING COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(1) BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Citadel
Broadcasting Company (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting of normal recurring
accruals, considered necessary for a fair presentation have been included.
Operating results for the nine months ended September 30, 1998 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1998. For further information, refer to the consolidated financial
statements and notes thereto included in Citadel Broadcasting Company's Annual
Report on Form 10-K for the year ended December 31, 1997.

(2) 1998 ACQUISITIONS

On January 2, 1998, the Company acquired radio stations WEMR-AM and WEMR-FM
in Wilkes-Barre/Scranton, Pennsylvania for a purchase price of $815,000. The
acquisition was accounted for using the purchase method of accounting.

On February 12, 1998, the Company acquired radio stations KQFC-FM, KKGL-FM
and KBOI-AM and a parcel of land in Boise, Idaho for an aggregate purchase price
of approximately $14,400,000. The acquisition was accounted for using the
purchase method of accounting.

On April 21, 1998, the Company acquired radio stations KIZN-FM and KZMG-FM
in Boise, Idaho for an aggregate purchase price of $14,600,000. The acquisition
was accounted for using the purchase method of accounting.

On July 14, 1998, the Company signed an agreement to acquire KAAY-AM in
Little Rock, Arkansas for an aggregate purchase price of $5,000,000. The
acquisition will be accounted for using the purchase method of accounting.

On July 27, 1998, the Company exercised its option to purchase WBHT-FM in
Wilkes-Barre, Pennsylvania, and, on August 13, 1998, the Company entered into a
definitive purchase agreement to purchase WBHT for an approximate purchase price
of $1,200,000. The Company has operated WBHT under a local marketing agreement
since July 3, 1997. The acquisition will be accounted for using the purchase
method of accounting.

On September 18, 1998, the Company acquired the assets of an internet
service provider, Digitalplanet, L.C., in Salt Lake City, Utah for an aggregate
purchase price of $225,000. The acquisition was accounted for using the purchase
method of accounting.

On September 29, 1998, the Company acquired the assets of an internet
service provider, Internet Technology Systems, Inc., in Salt Lake City, Utah for
an aggregate purchase price of $1,535,000. The acquisition was accounted for
using the purchase method of accounting.

In September 1998, the agreement entered into by the Company to sell
substantially all of the assets of its two FM radio stations in Johnstown,
Pennsylvania and its two FM and two AM radio stations in State College,
Pennsylvania was terminated.

F-31
<PAGE> 194
CITADEL BROADCASTING COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(3) PARENT COMPANY INITIAL PUBLIC OFFERING

On July 7, 1998, the Company's parent, Citadel Communications Corporation
("CCC"), consummated the initial public offering (the "IPO") of 6,880,796 shares
of its common stock at an initial public offering price of $16.00 per share. Of
such shares, 6,250,000 shares were sold by CCC and 630,796 shares were sold by
certain stockholders of CCC. On July 14, 1998, CCC sold an additional 1,032,119
shares of its common stock at the initial public offering price pursuant to the
exercise of the underwriters' over-allotment option. Total proceeds of the IPO,
including the shares issued under the over-allotment option, were $126,606,640,
of which total proceeds to CCC were $108,357,932, total proceeds to the selling
stockholders were $9,386,244 and total underwriting discounts and commissions
were $8,862,466.

(4) CITADEL LICENSE, INC. FINANCIAL DATA

The operations of Citadel License, Inc. ("Citadel License"), a wholly owned
subsidiary of the Company, include holding FCC licenses for all stations owned
by the Company and the amortization of these licenses. Citadel License has
guaranteed the 10-1/4% senior subordinated notes of the Company. The guarantee
is full, unconditional and joint and several. The separate financial statements
of Citadel License have not been presented because management of the Company has
determined they would not be material to investors. There are no costs or
expenses of Citadel License that are borne by Citadel Broadcasting Company.

The following is summary financial data for Citadel License:

<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
------------------
(UNAUDITED)
<S> <C>
Balance Sheets:
Intangible assets, net (broadcast licenses)............... $159,727,372
------------
Total assets........................................... $159,727,372
============
Shareholder's equity...................................... 159,727,372
------------
Total liabilities and shareholder's equity............. $159,727,372
============
</TABLE>

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
1997 1998
---------- ----------
(UNAUDITED)
<S> <C> <C>
Statements of Operations:
Amortization expense..................... $2,873,989 $8,375,335
---------- ----------
Net loss............................ $2,873,989 $8,375,335
========== ==========
</TABLE>

At present, Citadel License is the only subsidiary of the Company.

(5) SUBSEQUENT EVENTS

On October 8, 1998, the Company sold the assets of its one AM and three FM
stations in Quincy, Illinois for $2,250,000. A gain of approximately $0.8
million was recognized on the sale.

On October 9, 1998, the Company agreed to purchase the assets of 62nd
Street Broadcasting of Saginaw, L.L.C. in Saginaw, Michigan for an approximate
purchase price of $35,000,000. The acquisition of these assets, which include
five FM radio stations and one AM radio station in Saginaw/Bay City, was
completed on February 9, 1999. The acquisition will be accounted for using the
purchase method of accounting.

F-32
<PAGE> 195
CITADEL BROADCASTING COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On October 15, 1998, the Company acquired the assets of an internet service
provider, In Quo, in Salt Lake City, Utah for an aggregate purchase price of
approximately $550,000. The acquisition was accounted for using the purchase
method of accounting.

On October 26, 1998, the Company acquired the assets of an internet service
provider, The Johnson Connection, in Salt Lake City, Utah for an aggregate
purchase price of $320,000. The acquisition was accounted for using the purchase
method of accounting.

On October 29, 1998, the Company agreed to purchase WHYL-AM and WHYL-FM in
Carlisle, Pennsylvania for an approximate purchase price of $4,250,000. The
acquisition will be accounted for using the purchase method of accounting.

On November 5, 1998, the Company agreed to purchase the stock and warrants
of Citywide Communications, Inc., which owns radio stations in Baton Rouge and
Lafayette, Louisiana, for an approximate purchase price of $34,500,000. The
acquisition will be accounted for using the purchase method of accounting.

On November 17, 1998, the Company acquired radio station KAAY-AM in Little
Rock, Arkansas for a purchase price of $5,100,000. The acquisition will be
accounted for using the purchase method of accounting. In conjunction with this
acquisition, the Company sold the assets of KRNN-AM in Little Rock, Arkansas for
$200,000.

The Company sold $115,000,000 million principal amount of its 9-1/4% Senior
Subordinated Notes due 2008 on November 19, 1998 in order to finance certain
acquisitions, repay certain indebtedness and provide cash for working capital
purposes.

On November 23, 1998, the Company agreed to purchase the assets of Wicks
Radio Group, which owns radio stations in Charleston, South Carolina,
Binghamton, New York, and Muncie and Kokomo, Indiana, for an approximate
purchase price of $77,000,000. The acquisition will be accounted for using the
purchase method of accounting.

On December 8, 1998, the Company acquired the assets of an internet service
provider, The Friendly Net, LLC, in Salt Lake City, Utah for an aggregate
purchase price of $93,000. The acquisition will be accounted for using the
purchase method of accounting.

On January 4, 1999, the Company acquired radio station WBHT-FM in
Wilkes-Barre, Pennsylvania for an aggregate purchase price of $1,263,000. The
acquisition will be accounted for using the purchase method of accounting. Prior
to the acquisition, the Company had operated WBHT-FM under a local marketing
agreement since July 3, 1997.

On January 11, 1999, the Company exercised its options to purchase WKQV-FM
and WKQV-AM in the Wilkes-Barre/Scranton, Pennsylvania and agreed to purchase
such stations for approximate purchase prices of $998,000 and $365,000,
respectively. The Company has operated WKQV-FM and WKQV-AM under a local
marketing agreement and a joint sales agreement, respectively, since July 3,
1997. The acquisitions will be accounted for using the purchase method of
accounting.

On January 13, 1999, the Company entered into an asset purchase agreement
to sell substantially all of the assets of its 18 FM and seven AM radio stations
in Eugene and Medford, Oregon, Tri-Cities, Washington, Billings, Montana and
Johnstown and State College, Pennsylvania for an approximate sale price of
$26,000,000.

On February 2, 1999, the Company agreed to purchase KNJY-FM in Spokane,
Washington for an approximate purchase price of $4,150,000. The acquisition will
be accounted for using the purchase method of accounting.
F-33
<PAGE> 196

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Deschutes River Broadcasting, Inc.:

We have audited the accompanying consolidated balance sheets of Deschutes
River Broadcasting, Inc. and subsidiaries as of December 31, 1995 and 1996, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Deschutes
River Broadcasting, Inc. and subsidiaries as of December 31, 1995 and 1996, and
the results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.

/s/ KPMG PEAT MARWICK LLP

Portland, Oregon
February 14, 1997

F-34
<PAGE> 197

DESCHUTES RIVER BROADCASTING, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
1995 1996
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ -- $ 823,968
Accounts receivable, less allowance for doubtful accounts
of $49,952 and $122,714 at December 31, 1995 and 1996,
respectively............................................ 1,283,847 1,856,984
Prepaid expenses and other current assets................. 238,868 367,621
Current portion of note receivable........................ -- 156,000
----------- -----------
Total current assets.................................... 1,522,715 3,204,573
Intangible assets, net (note 4)............................. 5,281,109 14,142,899
Long-term portion of note receivable........................ -- 143,000
Property and equipment, net (notes 3 and 5)................. 3,606,655 3,153,930
Deposits.................................................... 6,542 3,026
----------- -----------
$10,417,021 $20,647,428
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdraft............................................ $ 23,133 $ --
Line of credit (notes 7 and 13)........................... 418,168 --
Accounts payable.......................................... 185,071 467,873
Accrued compensation and commissions...................... 313,734 542,502
Other accrued expenses.................................... 128,510 147,985
Current portion of long-term debt (notes 7 and 13)........ 485,983 --
Accrued interest payable (notes 6, 12 and 13)............. 335,501 255,001
----------- -----------
Total current liabilities............................... 1,890,100 1,413,361
Advance (note 13)........................................... -- 9,123,310
Note payable (notes 6 and 13)............................... -- 8,867,000
Long-term debt, less current portion (notes 7 and 13)....... 2,886,033 --
Subordinated notes payable (notes 7, 12 and 13)............. 3,156,998 --
Other long-term liabilities................................. 38,751 47,735
----------- -----------
Total liabilities.................................. 7,971,882 19,451,406
----------- -----------
Stockholders' equity (notes 9 and 13):
Convertible preferred stock, authorized 5,000,000 shares;
issued at stated value of $1 per share:
Series A preferred, no par value, issued and outstanding
643,000 shares....................................... 643,000 643,000
Series B preferred, no par value, issued and outstanding
1,612,000 shares..................................... 1,612,000 1,612,000
Series C preferred, no par value, issued and outstanding
592,000 shares....................................... 592,000 592,000
Series D preferred, no par value, issued and outstanding
95,000 shares........................................ 95,000 95,000
(Aggregate liquidation preference of $3,172,962 and
$3,426,798 at December 31, 1995 and 1996,
respectively)
Common stock, authorized 10,000,000 shares; no par value;
-0- and 1,096,902 shares issued and outstanding at
December 31, 1995 and 1996, respectively................ -- 136,471
Accumulated deficit....................................... (496,861) (1,882,449)
----------- -----------
Total stockholders' equity......................... 2,445,139 1,196,022
----------- -----------
Commitments and contingencies (notes 9, 10, 12 and 13)...... $10,417,021 $20,647,428
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.
F-35
<PAGE> 198

DESCHUTES RIVER BROADCASTING, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
1995 1996
---------- -----------
<S> <C> <C>
Revenues:
Net broadcasting revenues.............................. $6,845,107 $ 8,843,074
---------- -----------
Operating expenses:
Station operating expenses:
Selling, promoting, programming and engineering..... 4,053,145 5,554,632
General and administrative.......................... 1,297,835 1,780,584
Corporate general and administrative expenses.......... 374,158 488,831
Management fees (note 12).............................. 171,128 215,938
Depreciation and amortization.......................... 765,200 1,173,349
---------- -----------
Income (loss) from operations.................. 183,641 (370,260)
---------- -----------
Nonoperating income (expenses):
Interest expense (notes 12 and 13)..................... (656,897) (1,143,893)
Gain on sale of assets................................. -- 97,097
Other, net............................................. 1,591 30,162
Net trade income (expense)............................. (22,934) 1,306
---------- -----------
Nonoperating expenses, net..................... (678,240) (1,015,328)
---------- -----------
Loss before income taxes....................... (494,599) (1,385,588)
Income taxes (note 11)................................... -- --
---------- -----------
Net loss....................................... $ (494,599) $(1,385,588)
========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.
F-36
<PAGE> 199

DESCHUTES RIVER BROADCASTING, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK NOTE TOTAL
---------------------- --------------------- ACCUMULATED RECEIVABLE -- STOCKHOLDERS'
SHARES AMOUNT SHARES AMOUNT DEFICIT OFFICER EQUITY
--------- ---------- --------- --------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1994..................... 643,000 $ 643,000 102,000 $ 102,000 $ (2,262) $(42,000) $ 700,738
Repayment of note
receivable -- officer... -- -- -- -- -- 42,000 42,000
Issuance of common
stock................. -- -- 95,000 95,000 -- -- 95,000
Conversion of common
stock to preferred
stock................. 197,000 197,000 (197,000) (197,000) -- -- --
Issuance of preferred
stock................. 2,102,000 2,102,000 -- -- -- -- 2,102,000
Net loss................. -- -- -- -- (494,599) -- (494,599)
--------- ---------- --------- --------- ----------- -------- -----------
Balance, December 31,
1995..................... 2,942,000 2,942,000 -- -- (496,861) -- 2,445,139
Issuance of common
stock................. -- -- 91,649 126,419 -- -- 126,419
Exercise of common stock
warrants.............. -- -- 1,005,253 10,052 -- -- 10,052
Net loss................. -- -- -- -- (1,385,588) -- (1,385,588)
--------- ---------- --------- --------- ----------- -------- -----------
Balance, December 31,
1996..................... 2,942,000 $2,942,000 1,096,902 $ 136,471 $(1,882,449) $ -- $ 1,196,022
========= ========== ========= ========= =========== ======== ===========
</TABLE>

See accompanying notes to consolidated financial statements.
F-37
<PAGE> 200

DESCHUTES RIVER BROADCASTING, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
1995 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss.................................................. $ (494,599) $(1,385,588)
----------- -----------
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation........................................... 314,319 388,284
Amortization........................................... 450,881 785,065
Increase in allowance for doubtful accounts............ 33,500 72,762
Gain on sale of assets................................. -- (97,097)
Changes in assets and liabilities, net of effect of
acquisitions:
Increase in accounts receivable...................... (1,150,810) (645,898)
Increase in prepaid expenses and other current
assets.............................................. (86,257) (100,767)
Increase in accounts payable and accrued expenses.... 414,911 315,973
Increase (decrease) in accrued interest payable...... 314,800 (59,287)
----------- -----------
Net cash used in operating activities............. (203,255) (726,553)
----------- -----------
Cash flows from investing activities:
Proceeds from sale of assets.............................. -- 1,150,000
Capital expenditures for property and equipment........... (171,177) (237,305)
Capital expenditures for property and equipment related to
acquisitions........................................... (2,898,359) (744,717)
Purchase of intangible assets............................. (5,072,508) (9,532,047)
Purchase of note receivable............................... -- (273,416)
Other..................................................... 11,454 2,340
----------- -----------
Net cash used in investing activities............. (8,130,590) (9,635,145)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of note payable.................... -- 8,867,000
Proceeds from advance..................................... -- 9,123,310
Increase (decrease) in bank overdraft..................... 22,992 (23,133)
Proceeds from note receivable--officer.................... 42,000 --
Proceeds from issuance of long-term debt.................. 3,306,000 --
Principal payments on long-term debt...................... (284,649) (3,372,016)
Proceeds from issuance of subordinated debt............... 2,710,998 2,600,000
Principal payments on subordinated debt................... -- (5,756,998)
Net borrowings under line of credit....................... 315,719 (418,168)
Proceeds from exercise of common stock warrants........... -- 10,052
Proceeds from issuance of preferred stock................. 2,197,000 --
Proceeds from issuance of common stock.................... -- 126,419
Increase in other long-term liabilities................... 23,785 29,200
----------- -----------
Net cash provided by financing activities......... 8,333,845 11,185,666
----------- -----------
Net increase in cash and cash equivalents......... -- 823,968
Cash and cash equivalents, beginning of year................ -- --
----------- -----------
Cash and cash equivalents, end of year...................... $ -- $ 823,968
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the year for interest.................... $ 321,396 $ 1,244,393
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.
F-38
<PAGE> 201

DESCHUTES RIVER BROADCASTING, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1996

(1) NATURE OF BUSINESS AND ORGANIZATION

Deschutes River Broadcasting, Inc. was formed in 1994 and is a holding
company which wholly-owns eight subsidiaries located in Oregon, Washington and
Montana. The subsidiaries own and operate radio stations and hold Federal
Communications Commission (FCC) licenses.

The subsidiary companies which own and operate radio stations are Deschutes
River Broadcasting of Oregon, Inc., Deschutes River-Tri-Cities Operating
Company, Inc., Deschutes River Broadcasting of Billings, Inc. and Deschutes
River Broadcasting of Bozeman, Inc. The subsidiary companies which hold FCC
licenses are DRB Oregon License, Inc., Deschutes River-Tri-Cities Broadcasting,
Inc., DRB Billings License, Inc. and DRB Bozeman License, Inc.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All material intercompany items
and transactions have been eliminated in consolidation.

(b) Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at 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.

The carrying amounts of cash and cash equivalents, accounts receivable,
note receivable, accounts payable and other accrued expenses, accrued interest,
advance, note payable and the line of credit approximate fair value because of
the short-term or intercompany nature of these instruments.

Fair value estimates are made at a specific point in time, based on
relevant market information about the financial instrument. These estimates are
subjective in nature and involve uncertainties and matters of significant
judgment and, therefore, cannot be determined with precision. Changes in
assumptions could significantly affect the estimates.

(d) Cash and Cash Equivalents

The Company considers all investments with a maturity of three months or
less at date of purchase to be a cash equivalent.

(e) Intangible Assets

Intangible assets are recorded at cost and amortized using the
straight-line method over the expected periods to be benefited, which range from
three to fifteen years. The Company assesses the recoverability of these
intangible assets by determining whether the balance can be recovered

F-39
<PAGE> 202
DESCHUTES RIVER BROADCASTING, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

through undiscounted future operating cash flows of the acquired asset. The
amount of asset impairment, if any, is measured based on projected discounted
future operating cash flows using a discount rate reflecting the Company's
average cost of funds. The assessment of the recoverability of the asset will be
impacted if estimated future operating cash flows are not achieved.

(f) Property and Equipment

Property and equipment are recorded at cost and depreciated using the
straight-line method over the estimated lives of the respective assets, which
range from five to twenty years. Maintenance and repairs are charged to
operations as incurred.

(g) Revenue

Net broadcast revenue is presented net of agency commissions and is
recognized when the advertisements are broadcast.

(h) Trade Transactions

Revenue from trade transactions (advertising provided in exchange for goods
and services) is recognized as income when advertisements are broadcast and
trade expense is recognized when merchandise is consumed or services are
performed. An asset and liability are recorded at the fair market value of the
goods or services received.

(i) Stock Option Plan

Prior to January 1, 1996, the Company accounted for its stock option plan
in accordance with the provisions of Accounting Principles Board (APB) Opinion
No. 25, "Accounting for Stock Issued to Employees", and related interpretations.
As such, compensation expense would be recorded on the date of grant only if the
current market price of the underlying stock exceeded the exercise price. On
January 1, 1996, the Company adopted SFAS No. 123, "Accounting for Stock-Based
Compensation", which permits entities to recognize as expense over the vesting
period the fair value of all stock-based awards on the date of grant.
Alternatively, SFAS No. 123 also allows entities to continue to apply the
provisions of APB Opinion No. 25 and provide pro forma net income disclosure for
employee stock option grants as if the fair-value-based method defined in SFAS
No. 123 had been applied. The Company has elected to continue to apply the
provisions of APB Opinion No. 25 and provide the pro forma disclosure provisions
of SFAS No. 123.

(j) Income Taxes

The Company accounts for taxes on the asset and liability method. Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. Deferred income taxes are measured
using the enacted tax rates and laws that are anticipated to be in effect when
the differences are expected to reverse.

(k) Reclassifications

Certain 1995 amounts have been reclassified to conform with current year
presentation.

F-40
<PAGE> 203
DESCHUTES RIVER BROADCASTING, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(3) ACQUISITIONS

During 1995, the Company acquired two stations in Medford, Oregon for
approximately $1.9 million and six stations in the Montana markets combined for
approximately $5.4 million. The acquisitions were accounted for by the purchase
method of accounting and, accordingly, the purchase price was allocated to
property and equipment and intangible assets based on their fair values at the
date of acquisition. The purchase price, including acquisition costs of $564,000
was allocated as follows:

<TABLE>
<S> <C>
Property and equipment................. $2,600,000
Intangible assets...................... 5,264,000
----------
$7,864,000
==========
</TABLE>

During 1996, the Company acquired ten new radio stations in various
markets. The acquisitions included three stations in Eugene, Oregon, four
stations in Medford, Oregon, two stations in Billings, Montana and one station
in Tri-Cities, Washington. The purchase prices were approximately $7.0 million,
$2.0 million, $1.35 million and $500,000, respectively.

The acquisitions were accounted for by the purchase method of accounting
and, accordingly, the purchase price was allocated to property and equipment,
intangible assets and payables based on their fair values at the date of
acquisition. The purchase price, including acquisition costs of $112,266 was
allocated as follows:

<TABLE>
<S> <C>
Property and equipment................ $ 806,000
Intangible assets..................... 10,206,028
Payables assumed...................... (49,762)
-----------
$10,962,266
===========
</TABLE>

During 1996, the Company disposed of three stations in Bozeman, Montana for
approximately $750,000. A gain of approximately $285,000 was recognized on the
sale.

The consolidated financial statements include the operating results of each
business from the date of acquisition. Pro forma unaudited consolidated
operating results of the Company and the acquired stations for the years ended
December 31, 1995 and 1996, assuming the acquisitions and dispositions had been
made as of January 1, 1995 and 1996, are summarized below:

<TABLE>
<CAPTION>
1995 1996
----------- -----------
<S> <C> <C>
Net broadcasting revenues............... $11,316,910 $11,442,108
Income (loss) from operations........... 423,053 (436,871)
Net loss................................ (1,188,707) (2,215,299)
</TABLE>

These pro forma results have been prepared for comparative purposes only
and include certain adjustments for operational expenses that the Company will
not incur in its operation of the stations, for interest expense that would have
been incurred to finance the purchases, additional depreciation expense based on
the fair market value of the property and equipment acquired, and the
amortization of intangibles arising from the transactions. The pro forma
financial information is not necessarily indicative of the results of operations
had the acquisitions and dispositions been consummated as of January 1, 1995 and
1996 or of future results of operations of the consolidated entities.

F-41
<PAGE> 204
DESCHUTES RIVER BROADCASTING, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(4) INTANGIBLE ASSETS, NET

Intangible assets, net are as follows at December 31:

<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIFE 1995 1996
----------- ---------- -----------
<S> <C> <C> <C>
Goodwill........................ 15 years $2,811,354 $ 5,037,425
FCC licenses.................... 15 years 2,325,000 9,474,000
Covenants not to compete........ 3-5 years 295,000 456,000
Organizational costs............ 5 years 255,319 252,970
Deferred financing costs........ Loan term 88,455 --
---------- -----------
5,775,128 15,220,395
Less accumulated amortization... 494,019 1,077,496
---------- -----------
Intangible assets, net..... $5,281,109 $14,142,899
========== ===========
</TABLE>

(5) PROPERTY AND EQUIPMENT, NET

Property and equipment, net are as follows at December 31:

<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIFE 1995 1996
------------- ---------- ----------
<S> <C> <C> <C>
Land........................ -- $ 312,764 $ 312,764
Buildings................... 20 years 497,430 297,431
Leasehold improvements...... Life of lease 130,000 13,000
Tower and transmitter
equipment................. 13 years 1,664,710 1,521,586
Vehicles.................... 5 years 13,260 28,724
Studio equipment............ 7 years 1,089,163 1,153,715
Furniture and fixtures...... 5 - 7 years 236,859 352,179
---------- ----------
3,944,186 3,679,399
Less accumulated
depreciation and
amortization.............. 337,531 525,469
---------- ----------
Property and
equipment,
net............. $3,606,655 $3,153,930
========== ==========
</TABLE>

(6) NOTE PAYABLE

During 1996, in contemplation of the merger discussed at note 13, the
Company obtained financing from Citadel Communications Corporation (CCC) in the
form of an $8.9 million note payable to assist in making current year
acquisitions (see note 3). The note bears interest at the higher of the Euro
dollar rate plus 300 basis points or 9% and is payable quarterly. Accrued
interest at December 31, 1996 was approximately $255,000. The note is secured by
the assets of the acquired stations and stock of the subsidiary corporations
that own the stations acquired with the note proceeds. The note payable was
required to be repaid by July 1, 1997 if the merger did not occur. On the date
of the merger, the note payable was reclassified as an intercompany liability,
therefore it is classified as a non-current liability at December 31, 1996.

F-42
<PAGE> 205
DESCHUTES RIVER BROADCASTING, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(7) LINE OF CREDIT, LONG-TERM DEBT AND SUBORDINATED NOTES PAYABLE

At December 31, the Company had the following debt instruments outstanding:

<TABLE>
<CAPTION>
1995 1996
---------- ------
<S> <C> <C>
Line of credit, revolving; rate of prime plus
1.5%........................................ $ 418,168 $ --
Bank note payable; variable and fixed rates of
8.5% to 10%................................. 3,372,016 --
Subordinated notes payable; rate of 11%....... 3,156,998 --
---------- ------
Total............................... $6,947,182 $ --
========== ======
</TABLE>

Borrowings under the line of credit and bank note payable were
collateralized by substantially all assets of the Company, excluding assets
discussed in note 6.

In contemplation of the merger discussed at note 13, all debt instruments
were paid off on December 31, 1996. As the instruments were paid off by December
31, 1996, the Company did not have to comply with any financial covenants at or
for the year then ended.

(8) LEASES

The Company and its subsidiaries are obligated under certain noncancelable
operating leases for which future minimum payments are as follows:

<TABLE>
<S> <C>
Year ending December 31:
1997................................................. $ 309,542
1998................................................. 243,062
1999................................................. 207,604
2000................................................. 189,175
2001................................................. 176,279
Subsequent to 2001................................... 379,705
----------
$1,505,367
==========
</TABLE>

Rental expense, principally for office space, equipment and tower rentals,
amounted to $145,000 and $278,000 for the years ended December 31, 1995 and
1996.

(9) STOCKHOLDERS' EQUITY

Conversion of Stock at Time of Merger

As discussed in note 13, all equity instruments of the Company; preferred
stock, common stock and stock options, were converted into CCC equity
instruments on January 1, 1997, the merger date.

Convertible Preferred Stock

Each share of Deschutes River Broadcasting Series A, B, C and D preferred
stock is convertible at any time into common stock on a one-for-one basis
(subject to certain adjustments). Conversion of each series of preferred stock
is automatic upon the exchange of 51% or more of each series of preferred stock
into common stock.

Dividends are payable when and as declared by the Board of Directors and
are not cumulative. Dividends must be first paid on preferred stock before
amounts are paid on common stock. No dividends were declared or paid during 1995
or 1996.

Upon liquidation, dissolution, or winding up of the Company, holders of
convertible preferred stock have preference and priority over common shares for
payment out of the assets of

F-43
<PAGE> 206
DESCHUTES RIVER BROADCASTING, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the Company or proceeds thereof available for distribution to stockholders of $1
per share plus a liquidation preference, which accrues at an annual compounded
rate of 8%.

Common Stock

At December 31, 1995 and 1996, the Company had reserved shares of common
stock for issuance as follows:

<TABLE>
<CAPTION>
1995 1996
--------- ---------
<S> <C> <C>
Conversion of preferred stock............. 2,942,000 2,942,000
Issuance of warrants...................... 1,005,253 --
Issuance to employees, officers, directors
and consultants under stock incentive
plan.................................... 708,843 708,843
--------- ---------
4,656,096 3,650,843
========= =========
</TABLE>

Stock Incentive Plan

During 1995, the Company adopted a Stock Incentive Plan (the Plan) for
selected employees, officers, directors and consultants. Under the terms of the
Plan, the option price is determined by the Board of Directors (the Board) at
the time the option is granted. The options generally expire ten years from date
of grant and are exercisable as determined by the Board. At December 31, 1995,
no shares had been granted under the Plan.

During 1996, the Company granted 246,569 options at $.60 and 332,926
options at $2.10. None of the options were exercised during the current year.
The options generally are either 100% vested at the time of grant or become 100%
vested at the time of a merger (see note 13). At December 31, 1996, 579,495
options were outstanding at a weighted average exercise price of $1.46, of which
238,095 options with an exercise price of $2.10 were exercisable.

During 1995, the Financial Accounting Standards Board issued "Accounting
for Stock-Based Compensation" (SFAS 123) which defines a fair value based method
of accounting for an employee stock option and similar equity instruments.

As permitted under SFAS 123, the Company has elected to continue to account
for its stock-based compensation plans under APB Opinion No. 25. The Company has
computed, for pro forma disclosure purposes, the value of all options granted
during 1996 using the minimum value method as prescribed by SFAS 123 using the
following assumptions for grants:

<TABLE>
<S> <C>
Risk-free interest rate........... 6.04%
Expected dividend yield........... 0%
Expected lives.................... 5 years
</TABLE>

Using the minimum value methodology, the total value of options granted
during 1996 was $223,000 which would be amortized on a pro forma basis over the
vesting period of the options (one to five years). The weighted average fair
value per share of options granted during 1996 was $.38. If the Company had
accounted for its stock-based compensation plans in accordance with SFAS 123,
the Company's net loss would approximate the pro forma disclosure below for the
year ended December 31, 1996:

<TABLE>
<CAPTION>
AS REPORTED PRO FORMA
----------- ----------
<S> <C> <C>
Net loss........................ $1,385,588 $1,534,861
</TABLE>

The effects of applying SFAS 123 in this pro forma disclosure is not
indicative of future amounts.

F-44
<PAGE> 207
DESCHUTES RIVER BROADCASTING, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Warrants

During 1995, the Company granted 1,005,253 warrants to purchase common
stock to subordinated debt holders at a price of $.01. All warrants granted in
1995 were exercised in 1996 for 1,005,253 shares of common stock. Management
determined that the value associated with these warrants at the date of grant
was not material.

During 1996, the Company granted 290,381 warrants to purchase common stock
to subordinated debt holders at a price of $.01. The warrants were to become
exercisable on January 1, 1997 if the warrant holders' portion of the
subordinated debt was not repaid by December 31, 1996. Due to the contingent
nature of these warrants, no value was assigned at the grant date. These
warrants expired on December 31, 1996, when the subordinated debt was repaid
(see notes 7 and 13).

(10) SALARY SAVINGS AND RETIREMENT PLAN

The Company has a salary savings and retirement plan. The plan covers
primarily all officers and employees of the Company who meet prescribed age and
service requirements. Employees may contribute up to 15% of their compensation.
Matching contributions are determined at the discretion of the Board of
Directors. There were no Company contributions made to the plan during the years
ended December 31, 1995 or 1996.

(11) INCOME TAXES

No income tax benefit was recorded by the Company in 1995 and 1996. Income
tax benefit for the year ended December 31, 1996 differed from the amounts
computed by applying the U.S. Federal income tax rate of 34% to pretax income
primarily due to an increase in the valuation allowance.

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December 31,
1995 and 1996 are presented below:

<TABLE>
<CAPTION>
1995 1996
-------- --------
<S> <C> <C>
Deferred tax assets:
Federal and state net operating loss
carryforwards................................... $246,553 $912,219
Allowance for doubtful accounts.................... 19,160 48,983
Payroll accrual.................................... 21,403 2,100
-------- --------
Total gross deferred tax assets............ 287,116 963,302
Less valuation allowance........................... 190,338 735,645
-------- --------
Net deferred tax assets.................... 96,778 227,657
-------- --------
Deferred tax liabilities:
Book versus tax basis accumulated depreciation..... 96,778 227,657
-------- --------
Total gross deferred tax liabilities....... 96,778 227,657
-------- --------
Net deferred tax asset..................... $ -- $ --
======== ========
</TABLE>

As of December 31, 1996, the Company had a consolidated net operating loss
carryforward of approximately $2,280,000 for consolidated federal income tax
reporting purposes available to offset future taxable income through the year
2011. Based on the Company's history of operating losses, the more likely than
not criteria for recognizing the tax benefit primarily associated with

F-45
<PAGE> 208
DESCHUTES RIVER BROADCASTING, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the net operating losses cannot be met and, therefore, the Company has recorded
a valuation allowance to the extent of net deferred tax assets.

(12) RELATED PARTY TRANSACTIONS

The preferred stockholders are considered related parties of the Company.
At December 31, 1995, the Company had approximately $3.2 million in notes
payable to subordinated debt holders and $308,000 in accrued interest payable.
During 1996, the Company borrowed an additional $2.6 million in subordinated
debt from the preferred stockholders. Interest expense on the subordinated debt
for fiscal 1995 and 1996 was $308,000 and $548,000, respectively.

One of the preferred stockholders provides certain management services to
the Company. Management fees accrued at December 31, 1995 and 1996 were
approximately $21,000 and $48,000 and expense for the years then ended was
approximately $171,000 and $216,000, respectively.

As part of the merger discussed in note 13, all subordinated debt and
accrued interest was repaid and management services will no longer be provided
to the Company.

(13) SUBSEQUENT EVENTS

The Company was merged with and into a wholly-owned subsidiary of CCC
effective 12:01 a.m. on January 1, 1997. Effective with the merger, the Company
(and its wholly-owned subsidiaries) ceased to exist. All of the Company's equity
instruments, preferred stock, common stock and stock options, existing at
December 31, 1996, were converted into CCC equity instruments at the conversion
multiple defined in the merger agreement, at a per share conversion rate of
.1222948. All options outstanding at December 31, 1996 became fully vested at
the time of the merger. To effectuate the merger, CCC made an advance to the
Company of approximately $9.1 million on December 31, 1996 to pay off
subordinated debt, line of credit, long-term debt and other accrued expenses of
the Company. The advance is considered a non-current liability at December 31,
1996 as the obligation was reclassified as an intercompany liability on the date
of the merger.

F-46
<PAGE> 209

LOGO
------------------------------------------
2500 One PPG Place Telephone: (412)
338-7200
Pittsburgh, Pennsylvania 15222-5401
Facsimile: (412)
338-7380

INDEPENDENT AUDITORS' REPORT

To the Stockholders of
Tele-Media Broadcasting Company:

We have audited the accompanying consolidated balance sheets of Tele-Media
Broadcasting Company and its partnership interests (collectively, the
"Companies" -- see Note 1) as of December 31, 1995 and 1996, and the related
consolidated statements of operations, deficiency in net assets and cash flows
for each of the three years in the period ended December 31, 1996. These
consolidated financial statements are the responsibility of the Companies'
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the Companies as of December
31, 1995 and 1996, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles.

As discussed in Note 4 to the consolidated financial statements, at
December 31, 1996, the Companies were not in compliance with the terms of a debt
agreement.

/s/ Deloitte & Touche LLP

March 28, 1997

LOGO
F-47
<PAGE> 210

TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
1995 1996
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................. $ 1,904,258 $ 2,343,395
Accounts receivable:
Nonbarter--less allowance for doubtful accounts of
$531,000 and $612,000............................ 4,599,032 5,262,484
Barter--net........................................... 363,394 304,244
Other current assets.................................. 157,998 739,831
----------- -----------
Total current assets............................... 7,024,682 8,649,954
----------- -----------
Property, plant and equipment:
Land.................................................. 1,372,571 1,372,571
Buildings and improvements............................ 2,357,447 2,369,520
Broadcasting equipment................................ 10,653,182 11,169,533
----------- -----------
14,383,200 14,911,624
Less accumulated depreciation......................... 6,916,068 8,259,285
----------- -----------
Property, plant and equipment--net................. 7,467,132 6,652,339
----------- -----------
Intangibles--Net of accumulated amortization............ 29,036,404 26,904,288
----------- -----------
Other noncurrent assets................................. 95,641 16,331
----------- -----------
$43,623,859 $42,222,912
=========== ===========

LIABILITIES AND DEFICIENCY IN NET ASSETS
Current liabilities:
Accounts payable and other accrued expenses........... $ 1,466,387 $ 2,019,269
Accrued interest...................................... 999,880 1,895,889
Accrued sales commissions............................. 330,561 358,513
Amounts due to affiliates--net........................ 2,057,456 2,818,179
Current portion of long-term debt..................... 3,106,208 37,528,396
----------- -----------
Total current liabilities.......................... 7,960,492 44,620,246
----------- -----------
Long-term liabilities:
Long-term debt--less current portion.................. 64,417,869 32,382,419
Other................................................. 32,772 31,266
----------- -----------
Total long-term liabilities........................ 64,450,641 32,413,685
----------- -----------
Redeemable stock warrants............................... 750,950 1,644,000
----------- -----------
Deficiency in net assets:
Common stock, voting, $0.01 par value per share;
25,000 shares authorized, 15,000 shares
outstanding........................................ 150 150
Common stock, nonvoting, $0.01 par value per share;
10,000 shares authorized, none outstanding......... -- --
Additional paid-in capital............................ 6,924,445 6,924,445
Deficit............................................... (36,462,819) (43,379,614)
----------- -----------
Deficiency in net assets........................... (29,538,224) (36,455,019)
----------- -----------
$43,623,859 $42,222,912
=========== ===========
</TABLE>

See notes to consolidated financial statements.
F-48
<PAGE> 211

TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
1994 1995 1996
----------- ----------- -----------
<S> <C> <C> <C>
Revenues:
Local advertising....................... $17,637,256 $18,539,201 $20,968,055
National advertising.................... 4,867,471 4,957,359 4,618,104
Barter.................................. 3,561,009 3,646,290 3,451,849
Other................................... 576,607 511,827 370,932
----------- ----------- -----------
26,642,343 27,654,677 29,408,940
Less agency commissions................. 2,648,183 2,811,738 2,984,574
----------- ----------- -----------
Net revenues.................... 23,994,160 24,842,939 26,424,366
----------- ----------- -----------
Selling, general and administrative,
programming, barter and technical
expenses:
Selling.............................. 4,719,103 5,154,097 5,001,176
General and administrative........... 3,552,604 4,088,306 4,674,883
Programming.......................... 3,882,737 4,391,676 4,858,386
Barter............................... 3,485,969 3,520,426 3,513,231
Technical............................ 176,459 224,975 245,524
----------- ----------- -----------
15,816,872 17,379,480 18,293,200
----------- ----------- -----------
Operating income before management fees
and depreciation and amortization....... 8,177,288 7,463,459 8,131,166
----------- ----------- -----------
Management fees and depreciation and
amortization:
Management fees -- affiliates........... 844,579 741,876 804,410
Depreciation and amortization........... 4,690,730 3,708,809 3,493,509
----------- ----------- -----------
5,535,309 4,450,685 4,297,919
----------- ----------- -----------
Operating income.......................... 2,641,979 3,012,774 3,833,247
Interest expense.......................... 6,093,333 9,132,133 10,750,042
----------- ----------- -----------
Loss before extraordinary item............ (3,451,354) (6,119,359) (6,916,795)
Extraordinary item -- Loss on
extinguishment of debt.................. (1,341,348) -- --
----------- ----------- -----------
Net loss........................ $(4,792,702) $(6,119,359) $(6,916,795)
=========== =========== ===========
</TABLE>

See notes to consolidated financial statements.
F-49
<PAGE> 212

TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

CONSOLIDATED STATEMENTS OF DEFICIENCY IN NET ASSETS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
---------------- PAID-IN
SHARES AMOUNT CAPITAL DEFICIT
------ ------ ---------- ------------
<S> <C> <C> <C> <C>
Balance, January 1, 1994................................. 2,000 $ 20 $7,125,383 $(25,550,758)
Stock dividend......................................... 13,000 130 (130) --
Capital contributions -- cash.......................... -- -- 1,000 --
Distributions.......................................... -- -- (400,000) --
Contribution of management fees -- affiliates.......... -- -- 198,192 --
Net loss............................................... -- -- -- (4,792,702)
------ ---- ---------- ------------
Balance, December 31, 1994............................... 15,000 150 6,924,445 (30,343,460)
Net loss............................................... -- -- -- (6,119,359)
------ ---- ---------- ------------
Balance, December 31, 1995............................... 15,000 150 6,924,445 (36,462,819)
Net loss............................................... -- -- -- (6,916,795)
------ ---- ---------- ------------
Balance, December 31, 1996............................... 15,000 $150 $6,924,445 $(43,379,614)
====== ==== ========== ============
</TABLE>

See notes to consolidated financial statements.
F-50
<PAGE> 213

TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
1994 1995 1996
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss.................................................. $(4,792,702) $(6,119,359) $(6,916,795)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization.......................... 4,690,730 3,708,809 3,493,509
Interest deferral...................................... 1,343,351 5,114,170 4,932,565
Amortization of loan origination fees.................. -- 311,916 300,795
Management fees--affiliates............................ 198,192 741,876 804,410
Provision for losses on accounts receivable............ 376,732 367,522 387,291
Loss on write-off of intangible assets................. 159,431 -- --
Net barter transactions................................ (75,040) (125,864) 61,382
Increase in fair value of redeemable stock warrants.... -- -- 893,050
Other.................................................. 90,867 (36,420) (78,760)
Changes in operating assets and liabilities:
Accounts receivable--nonbarter....................... (437,520) (938,846) (1,050,743)
Other current assets................................. (249,489) 233,807 (581,833)
Accounts payable and other accrued expenses.......... (96,561) 281,957 552,882
Affiliates activity--net............................. 1,148,600 (407,409) (43,687)
Accrued interest..................................... 35,113 136,081 896,009
Accrued sales commissions............................ (38,885) (6,891) 27,952
----------- ----------- -----------
Net cash provided by operating activities......... 2,352,819 3,261,349 3,678,027
----------- ----------- -----------
Cash flows from investing activities:
Capital expenditures...................................... (428,423) (520,440) (468,631)
Purchase of radio stations................................ (1,900,000) (5,100,000) (65,000)
Other..................................................... (4,809) 6,124 6,000
----------- ----------- -----------
Net cash used in investing activities............. (2,333,232) (5,614,316) (527,631)
----------- ----------- -----------
Cash flows from financing activities:
Capital contributions..................................... 1,000 -- --
Borrowings................................................ 61,334,446 5,433,347 95,144
Payments of long-term debt................................ (57,323,706) (2,932,546) (2,640,971)
Loan origination fees and other intangible assets......... (2,668,295) (271,271) (163,764)
Sale of redeemable stock warrants......................... 750,950 -- --
Distributions to stockholders............................. (400,000) -- --
Other..................................................... (12,180) (2,178) (1,668)
----------- ----------- -----------
Net cash provided by (used in) financing
activities...................................... 1,682,215 2,227,352 (2,711,259)
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents........ 1,701,802 (125,615) 439,137
Cash and cash equivalents, beginning of year................ 328,071 2,029,873 1,904,258
----------- ----------- -----------
Cash and cash equivalents, end of year...................... $ 2,029,873 $ 1,904,258 $ 2,343,395
=========== =========== ===========
</TABLE>

See notes to consolidated financial statements.
F-51
<PAGE> 214

TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996

1. BASIS OF PRESENTATION AND BUSINESS

Tele-Media Broadcasting Company (the "Company" or "TMBC") was incorporated
in 1988 under the name TMZ Broadcasting Company ("TMZ"). In April 1994, TMZ
changed its name to Tele-Media Broadcasting Company. Robert E. Tudek and Everett
I. Mundy each own 50% of the outstanding shares of TMBC. TMBC operates radio
stations principally in midsize markets in the eastern United States and in
Illinois.

In May 1989, TMZ acquired all of the outstanding common stock of Eastern
Broadcasting Company ("Eastern") and its wholly-owned subsidiaries: Lehigh
Valley Broadcasting ("Lehigh"), Penn Broadcasting Corporation ("Hershey"),
Providence Broadcasting Corporation ("Providence"), Quincy Communications
Corporation ("Quincy") and State College Communications Corporation ("State
College"). TMZ retained the assets acquired from State College and contributed
the assets acquired from the remaining subsidiaries of Eastern to limited
partnerships with the same names which TMZ had formed to facilitate the
acquisition. TMZ owned between a 95% and 99% general partnership interest in
each of the limited partnerships. With the exception of Quincy, the limited
partnership interests were owned by the shareholders of TMZ and employees of the
Companies (hereinafter defined). The limited partnership interest in Quincy (1%)
was owned by Tele-Media Holding Corporation ("Holding"), which is owned by
Messrs. Tudek and Mundy.

In April 1993, Messrs. Tudek and Mundy formed Tele-Media Broadcasting
Company of America ("America Corporation"), which purchased substantially all of
the assets of two radio stations in Rhode Island, WPRO(AM) and WPRO-FM, for
approximately $6 million, and in May 1993 formed Tele-Media Broadcasting Company
of Johnstown/Altoona ("Johnstown/Altoona Corporation"), which purchased all of
the common stock of Cambria County Broadcasting Company ("CCBC"). CCBC operated
radio station WIYQ(FM). Simultaneous with the purchase, CCBC was merged into
Johnstown/Altoona Corporation with Johnstown/Altoona Corporation being the
surviving corporation. WIYQ(FM)'s call letters were subsequently changed to
WQKK-FM.

In April 1994, Tele-Media Broadcasting Company of Cambria County ("Cambria
County Corporation") was formed by the shareholders of TMBC. Cambria County
Corporation purchased substantially all of the assets of a radio station,
WGLU(FM), in the Johnstown, PA market for approximately $1.9 million.

In June 1994, the companies were restructured in order to facilitate a
refinancing (see Note 4). In order to accomplish the restructuring, Tele-Media
Broadcasting Operating Company Limited Partnership ("Tele-Media Operating") was
formed by TMBC. Holding distributed its 1% limited partnership interest in
Quincy to the shareholders of TMBC. TMBC contributed its general partnership
interests in Lehigh, Hershey, Providence and Quincy to Tele-Media Operating. The
shareholders of TMBC contributed all of their limited partnership interests in
Lehigh, Hershey and Quincy to TMBC. TMBC contributed all of its limited
partnership interest in Lehigh and all but 1% of its limited partnership
interest in Hershey and Quincy to Tele-Media Operating. These limited
partnership interests were, by virtue of an amendment to the respective
partnership agreements, converted into general partnership interests. Tele-Media
Broadcasting Company of America Limited Partnership ("America LP"), Tele-Media
Broadcasting Company of Johnstown/Altoona Limited Partnership
("Johnstown/Altoona LP"), Tele-Media Broadcasting Company of State
F-52
<PAGE> 215
TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

College Limited Partnership ("State College LP") and Tele-Media Broadcasting
Company of Cambria County Limited Partnership ("Cambria County LP") were formed
by Tele-Media Operating, and America Corporation, Johnstown/Altoona Corporation
and Cambria County Corporation were merged with and into TMBC and the assets
were then contributed to Tele-Media Operating which in turn conveyed them to the
limited partnerships by the same names. TMBC then transferred all of the assets
acquired in the State College acquisition to Tele-Media Operating which in turn
conveyed them to State College LP.

After the restructuring, TMBC owned a 99% general partnership interest in
Tele-Media Operating, and Tele-Media Operating owned between a 95% and 99%
general partnership interest in the following limited partnerships: Lehigh,
Hershey, Providence, Quincy, State College LP, America LP, Johnstown/Altoona LP
and Cambria County LP (collectively, the "Companies").

In March 1995, Quincy purchased substantially all of the assets of WZLZ-FM
for approximately $367,000 and the call letters were subsequently changed to
WMOS-FM. This acquisition was financed primarily with unsecured seller debt.

During 1994, Tele-Media Operating formed Tele-Media Broadcasting Company of
York Limited Partnership ("York LP"), of which Tele-Media Operating is 99%
general partner and TMBC is 1% limited partner. On May 1, 1995, the Companies
entered into Local Marketing Agreements ("LMAs") to operate WQXA-AM, WQXA-FM and
WIKN-FM. In November 1995, York LP acquired substantially all the assets of
WQXA-AM and WQXA-FM for approximately $5 million. This acquisition was financed
with additional borrowings under the Amended Loan Agreement (see Note 4).

On August 1, 1996, the Companies entered into an LMA to operate WBLF-AM. In
October 1996, State College LP acquired substantially all the assets of WBLF-AM
for approximately $215,000 (including forgiveness of a note receivable from the
seller and cash paid of $65,000).

During 1996, Tele-Media Operating formed Tele-Media Broadcasting Company of
Wilkes Barre/Scranton Limited Partnership ("Wilkes Barre LP") of which
Tele-Media Operating is 99% general partner and TMBC is 1% limited partner. On
August 1, 1996 Wilkes Barre LP entered into an asset purchase agreement to
acquire WAZL-AM and WZMT-FM and entered into an LMA to operate the stations. On
December 1, 1996, TMBC entered into an asset purchase agreement to acquire
WARM-AM and WMGS-FM along with the rights to purchase options for WBHT-FM,
WKQV-FM and WKQV-AM, all of which are located in the Wilkes-Barre market, and
which were being operated under LMAs and Joint Sales Agreements ("JSA's").
Subsequent to December 31, 1996, the Company consummated the acquisition of the
assets of WAZL-AM and WZMT-FM for approximately $3.5 million, which was financed
with borrowings under the Amended Loan Agreement. The Company expects to
consummate the acquisition of the assets of WARM-AM and WMGS-FM in 1997 for
approximately $11 million to be financed through additional borrowings under the
Amended Loan Agreement. The Company has made a nonrefundable escrow deposit of
$550,000 related to this acquisition. The escrow deposit is included in other
current assets and will be a reduction of the purchase price or, in the event
the acquisition is not consummated, paid to the seller.

The accompanying consolidated financial statements include the accounts of
TMBC and its partnership interests, including the acquisition of businesses from
their respective dates of purchase. All of the aforementioned acquisitions were
accounted for under the purchase method, and as such, the purchase price is
allocated among the assets and liabilities purchased based on

F-53
<PAGE> 216
TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

their relative fair market values at the date of acquisition. All material
intercompany transactions and balances have been eliminated in the consolidated
financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Cash and Cash Equivalents--For purposes of the consolidated statements
of cash flows, the Companies consider highly liquid investments with original
maturities of three months or less to be cash equivalents.

b. Property, Plant and Equipment--Property, plant and equipment, carried at
cost, is depreciated over the estimated useful lives of the related assets,
principally five to ten years. Depreciation is computed on the straight-line
method for financial statement purposes and on accelerated methods for federal
income tax purposes. Depreciation expense totaled $1,446,000, $1,499,000 and
$1,358,000 for the years ended December 31, 1994, 1995 and 1996, respectively.

c. Intangibles--Broadcast licenses are amortized over 20 years. Loan
origination fees and non-compete agreements are amortized over the terms of the
related agreements, and organization costs are amortized over five years. The
Companies write-off these assets and related accumulated amortization when the
assets become fully amortized.

d. Impairment of Long-Lived Assets--Management of the Companies reviews
long-lived assets (including property, plant and equipment and intangibles) for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Management considers the
undiscounted cash flow expected to be generated by the use of the asset and its
eventual disposition to determine when, and if, an impairment has occurred. Any
write-downs due to impairment are charged to operations at the time the
impairment is identified. During the year ended December 31, 1994, the Company
wrote-off loan origination fees with a net carrying value of approximately
$159,000 due to a refinancing of the debt. There were no such write-downs
required in 1995 or 1996.

e. Income Taxes--No provision for income taxes has been made for the
taxable income of the partnerships included in the consolidated financial
statements as income taxes are the responsibility of the partners. TMBC has
Subchapter S status for federal income tax purposes and, therefore, the
shareholders, rather than the Company, have the responsibility for federal
income taxes and for state income taxes in those states that recognize the
equivalent of Subchapter S status.

f. Revenue Recognition--Revenue is recognized as commercials are broadcast.
The Companies also enter into barter transactions in which advertising time is
traded for merchandise or services used principally for promotional and other
business purposes. Barter revenue is recorded as commercials are broadcast at
the estimated fair value of the air time. If merchandise or services are
received prior to the broadcast of commercials, recognition of the related
revenue is deferred and recognized as the commercials are broadcast.

g. Reclassifications--Certain reclassifications have been made to the 1994
and 1995 consolidated financial statements in order to conform to the 1996
presentation.

h. Use of Estimates in Preparation of the Consolidated Financial
Statements--The preparation of these consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amount of assets and
liabilities as of the date of the consolidated financial statements and

F-54
<PAGE> 217
TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

i. Local Marketing Agreements and Joint Sales Agreements--The Companies use
property, plant and equipment of the radio stations operated under LMAs and JSAs
in exchange for a fee. Under provisions of the Company's LMAs and JSAs, the
expenses of operating the stations (other than depreciation or amortization of
assets) are the obligations of the Companies, and they are entitled to the
revenues generated by the stations. Revenues and expenses related to these
agreements are reflected in the consolidated statements of operations. The
Companies have recorded fees in respect to these agreements of $63,750 for the
year ended December 31, 1996 within general and administrative expenses on the
consolidated statement of operations. No such costs were incurred in 1994 or
1995.

3. INTANGIBLES

Intangibles consist of the following:

<TABLE>
<CAPTION>
1995 1996
----------- -----------
<S> <C> <C>
Broadcast licenses...................... $36,389,881 $36,440,231
Non-compete agreements.................. 1,487,500 265,000
Loan origination fees................... 2,854,888 2,937,340
Organization costs...................... 250,387 284,633
----------- -----------
40,982,656 39,927,204
Less accumulated amortization........... 11,946,252 13,022,916
----------- -----------
$29,036,404 $26,904,288
=========== ===========
</TABLE>

4. LONG-TERM DEBT AND REDEEMABLE STOCK WARRANTS

Long-term debt consists of the following:

<TABLE>
<CAPTION>
1995 1996
----------- -----------
<S> <C> <C>
Senior:
Borrowings under Amended Loan
Agreement........................ $36,383,700 $33,935,700
Discount Notes...................... 30,698,371 35,630,986
Other................................. 442,006 344,129
----------- -----------
67,524,077 69,910,815
Less current portion.................. 3,106,208 37,528,396
----------- -----------
$64,417,869 $32,382,419
=========== ===========
</TABLE>

The significant provisions of the Amended and Restated Loan Agreement dated
February 26, 1997 (the "Amended Loan Agreement"), Senior Discount Notes (the
"Notes"), and the Redeemable Stock Warrants (the "Warrants") are discussed
below. The debt arrangements discussed in the preceding sentence were entered
into in connection with a refinancing in June 1994 of substantially all of the
debt then outstanding, resulting in an extraordinary loss on the extinguishment
thereof of approximately $1,341,000 during the year ended December 31, 1994.

F-55
<PAGE> 218
TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

AMENDED LOAN AGREEMENT

The Amended Loan Agreement permits borrowings of up to approximately $49
million. The remaining permitted borrowings under the Amended Loan Agreement
($16 million at February 26, 1997) were provided to finance the 1997 planned
acquisitions described in Note 1. The Amended Loan Agreement modified principal
and interest payments, and certain financial covenants and requires the payment
of additional fees to the Lender of $250,000 in 1997 and 1998 in the event of a
failure to meet the leverage covenant in either year. Prior to the amendment on
February 26, 1997, and at December 31, 1996, the Companies were not in
compliance with the provisions of the loan agreement then in effect.

Principal is payable in quarterly installments with any remaining principal
due April 1999. The Lender has the option to require the Companies to make an
additional principal payment of up to approximately $8.9 million in 1997 and
$21.4 million in 1998. Prior to the date of the Amended Loan Agreement, interest
was payable quarterly at the prime rate plus 2%, or at the Companies' option,
LIBOR plus 4.75%. At December 31, 1996, the interest rate was 10.25% (prime plus
2%). The Amended Loan Agreement requires interest payments quarterly. Interest
under the Amended Loan Agreement is charged at the prime rate plus 2%, or at the
Companies' option, LIBOR plus 4.5%, on borrowings up to approximately $44
million; interest on the next $5 million borrowed will be charged at the prime
rate plus 3.75%. The Amended Loan Agreement requires the Companies to enter into
a two year interest hedge contract on or before September 30, 1997 in a notional
amount not less than $25 million, providing protection should the prime rate
exceed the prime rate at the date the interest hedge contract is entered into by
2.5%. A penalty of between 2% and 4% is assessed on any principal prepayment.

Borrowings under the Amended Loan Agreement are collateralized by
substantially all of the assets and partnership interests of Tele-Media
Operating and its partnerships. The Amended Loan Agreement provides for, among
other things, limitations on distributions, indebtedness, mergers, sale and
purchase of assets, capital expenditures, payment of management fees and payment
of interest on the Notes, and requires the achievement of certain minimum cash
flow amounts.

SENIOR DISCOUNT NOTES

The Notes are due June 15, 2004 and were issued with an original issue
discount based on an interest rate of 16%. TMBC did not make interest payments
on the Notes due June 15, 1995, December 15, 1995 and June 15, 1996 and did not
consummate the Exchange Offer by the date as set forth in the original
Registration Rights Agreement (as defined below). Consequently, TMBC and the
Note holders amended the existing agreements to convert the amount of cash
interest payments then due ($2,509,000) plus penalties of approximately
$1,260,000 to notes payable and, in consideration of the conversion, the Note
holders waived TMBC's default. Under the terms of the Note Agreement, as amended
to include the notes issued in 1995 and 1996, interest of approximately $920,000
is payable semi-annually through June 15, 1999, and the remainder of the
interest is deferred and added to principal. After June 15, 1999, semi-annual
interest payments will be made at an annual rate of 16% of the accreted value of
the Notes. The accreted value of the Notes will approximate $47,811,000 at June
15, 1999.

TMBC did not make the required interest payment of $920,585 on the Notes
which was due on December 15, 1996, and consequently it is in default of the
Note Agreement. The holders of the Notes have the right to require immediate
payment of all amounts due under the Note Agreement. The total amount due under
the Note Agreement at December 31, 1996, which is classified as a current
obligation, was $35,630,986. The shareholders of TMBC have negotiated an
F-56
<PAGE> 219
TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

agreement to sell their stock in the Company. As part of the transaction, the
holders of the Notes will be paid an amount sufficient to satisfy all
outstanding claims against TMBC, including settlement of claims relating to the
redeemable stock warrants discussed below (see Note 6). In the event the sale is
not consummated, TMBC plans to enter into discussions with the Note holders to
convert the delinquent amount, plus any penalties, into a note payable. If the
Note holders refuse to agree to the conversion or another acceptable
alternative, TMBC intends to search for replacement financing.

Payment under the Notes is restricted by the Amended Loan Agreement.
Redemption of the Notes prior to their scheduled maturity is subject to
prepayment premiums. If a Qualified Public Offering is consummated by June 15,
1999, the Notes may be redeemed at TMBC's option for between 110% to 120% of the
Accreted Value of the Notes. After June 15, 1999, the Notes may be redeemed at
TMBC's option for $47,811,000 plus a premium of up to 8%, which declines ratably
through the date of maturity. In addition, if a Change of Control occurs, the
Note holders have the option to require TMBC to repurchase the Notes at 101% of
the Accreted Value.

The Notes are unsecured and restrict, among other things, the declaration
or payment of any dividends or any other distributions to shareholders, the
incurrence of additional debt, transactions with affiliates, payment of
management fees, formation of additional subsidiaries, mergers, sales of assets
and capital expenditures. Pursuant to a Registration Rights Agreement between
TMBC and the Purchasers, TMBC filed an Exchange Offer Registration Statement
(the "Registration Statement") with the Securities and Exchange Commission on
September 19, 1994. Under the terms of the Exchange Offer the holders of the
Notes may exchange the Old Notes for New Notes with identical terms, except that
the New Notes may be offered for resale, be resold or otherwise transferred,
under certain conditions by the holders without compliance with the registration
and prospectus delivery provisions of the Securities Act of 1933. Pursuant to
the terms of the Registration Rights Agreement, as amended, if the Registration
Statement does not become effective by May 1, 1997, additional interest of 1%
per annum will be charged from May 1, 1997 through December 1, 1997 and increase
.5% each six months thereafter, not to exceed an aggregate of 5% based on the
Accreted Value of the Notes until the Registration Statement becomes effective.

REDEEMABLE STOCK WARRANTS

The Warrants are exercisable at no additional cost to the Note holders for
between 3,750 and 5,290 shares of non-voting common stock representing 20% to
26% of the equity of TMBC, based on the achievement of certain levels of
Operating Cash Flow. The Warrant agreement provides registration rights to the
holders and restricts, among other things, the incurrence of additional debt,
payment of management fees, formation of additional subsidiaries, mergers, sale
of assets and distributions to stockholders. In addition, the Warrant holders
have put rights during the period from January 1, 2000 through March 31, 2000 or
upon a Change of Control, to require TMBC to redeem the Warrants for cash at
fair value.

The Warrants expire June 9, 2004 and are exercisable at any time on or
after January 1, 2000, or upon the occurrence of any of the following: the
conversion of TMBC to a Subchapter C corporation for federal income tax
purposes; an Initial Public Offering; a merger where TMBC is not the surviving
entity; a sale, lease, transfer or other disposition of all or substantially all
of the assets of TMBC or its subsidiaries; a liquidation or dissolution of TMBC;
or if Messrs. Tudek and Mundy own less than 50% of TMBC or a successor company.

F-57
<PAGE> 220
TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Holders of the non-voting common stock will enter into a Registration
Rights Agreement providing them with unlimited piggy-back registration rights
and the right to participate in any Initial Public Offering. The non-voting
stock is convertible into voting common stock in connection with the sale of
shares in a public offering, in a brokers' transaction pursuant to Rule 144
under the Securities Act of 1933, and if, after conversion, the shareholder
would own 4.9% or less of the common stock. TMBC has reserved 10,000 shares of
non-voting stock and 10,000 shares of voting stock for exercise of the Warrants.

TMBC estimated the redemption price of the warrants at December 31, 1995
and 1996 as $750,950 and $7,000,000, respectively. Increases in the redemption
price are accounted for prospectively as an adjustment to periodic interest
expense from the date of the increase to January 1, 2000, the earliest date the
put can be exercised. The accreted value of the Warrants at December 31, 1995
and 1996, was $750,950 and $1,644,000, respectively, resulting in a charge to
interest expense for the year ended December 31, 1996 of $893,050. There was no
adjustment to interest expense for the years ended December 31, 1994 and 1995.

Minimum scheduled maturities of long-term debt during the next five years
considering the Amended Loan Agreement and the classification of the Notes as a
current liability resulting from the default are as follows:

Interest paid on all debt in 1994, 1995 and 1996 was approximately
$4,616,000, $3,570,000 and $3,750,000, respectively.

5. OPERATING AGREEMENT WITH AFFILIATE

Under terms of an operating agreement entered into in June 1994, Tele-Media
Corporation of Delaware (an affiliate) ("Tele-Media Delaware") provides certain
management and technical services to the Companies and charges a management fee
of 3.5% of revenues. Payment of the management fee is restricted by the Notes
and the Amended Loan Agreement. The operating agreement expires on June 9, 2004
and continues from year-to-year thereafter unless either party gives written
notice to the other at least 30 days in advance of an expiration date.

Prior to the June 1994 operating agreement discussed above, Tele-Media
Delaware charged a management fee ranging from 3.5% to 7% of revenues. As
required by the provisions of the debt arrangements then outstanding as
discussed in Note 4, Messrs. Tudek and Mundy assumed responsibility for the
payment of certain management fees in 1994. The liabilities assumed by Messrs.
Tudek and Mundy are treated as additional paid-in capital in the consolidated
financial statements.

6. CONTINGENCIES AND COMMITMENTS

In 1995, TMBC and its shareholders entered into a nonbinding letter of
intent to sell the stock of TMBC. TMBC terminated the letter of intent and the
proposed buyer filed suit for damages and specific performance. A motion to
dismiss the suit was heard in early 1996 and the court ruled to dismiss a
majority of the claims, including those for specific performance, as no

F-58
<PAGE> 221
TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

definitive agreement had been reached for sale of the stock. On March 28, 1997,
the shareholders of TMBC executed an agreement to sell the stock of the Company
to the plaintiff in this suit. As part of this transaction, the suit was
dismissed with prejudice, and upon motion of the parties, the dismissal of the
suit was approved by the court. As a result of the suit's dismissal, this action
cannot again be filed by the plaintiff.

General and administrative expenses for the year ended December 31, 1995
and 1996 include approximately $274,000 and $260,000, respectively, of legal
expenses incurred relating to the defense of the lawsuit and the proposed sale.

The shareholders have agreed to pay 5.5% of the net proceeds from a sale of
their stock to two key members of management.

* * * * * *

F-59
<PAGE> 222

TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1997

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 3,708,373
Accounts receivable:
Nonbarter--less allowance for doubtful accounts of
$800,000.............................................. 5,447,842
Barter--net............................................ 303,749
Other current assets...................................... 303,620
------------
Total current assets.............................. 9,763,584
------------
Property, plant and equipment--net.......................... 8,436,165
------------
Intangibles--net............................................ 38,326,412
------------
Other noncurrent assets..................................... 16,331
------------
$ 56,542,492
============

LIABILITIES AND DEFICIENCY IN NET ASSETS

Current liabilities:
Accounts payable and other accrued expenses............... $ 1,514,622
Accrued interest.......................................... 2,969,594
Amounts due to affiliates--net............................ 4,159,152
Current portion of long-term debt......................... 39,491,064
------------
Total current liabilities......................... 48,134,432
------------
Long-term liabilities:
Long-term debt--less current portion...................... 47,306,734
Other..................................................... 31,266
------------
Total long-term liabilities....................... 47,338,000
------------
Redeemable stock warrants................................... 7,000,000
------------
Deficiency in net assets:
Common stock, voting, $0.01 par value per share; 25,000
shares authorized, 15,000 shares outstanding........... 150
Common stock, nonvoting, $0.01 par value per share; 10,000
shares authorized, none outstanding.................... --
Additional paid-in capital................................ 6,924,445
Deficit................................................... (52,854,535)
------------
Deficiency in net assets.......................... (45,929,940)
------------
$ 56,542,492
============
</TABLE>

See notes to unaudited condensed consolidated financial statements.
F-60
<PAGE> 223

TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND CHANGES IN DEFICIT
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997

<TABLE>
<CAPTION>
1996 1997
------------ ------------
<S> <C> <C>
Revenues:
Local advertising.................................... $ 9,323,963 $ 12,557,493
National advertising................................. 2,052,723 2,710,273
Barter............................................... 1,697,415 2,357,519
Other................................................ 222,507 339,431
------------ ------------
13,296,608 17,964,716
Less agency commissions.............................. 1,346,551 1,723,832
------------ ------------
Net revenues................................. 11,950,057 16,240,884
------------ ------------
Selling, general and administrative, programming,
barter and technical expenses:
Selling.............................................. 2,441,926 3,287,451
General and administrative........................... 2,008,273 3,366,246
Programming.......................................... 2,337,296 3,491,639
Barter............................................... 1,697,415 2,357,519
Technical............................................ 127,977 176,110
------------ ------------
8,612,887 12,678,965
------------ ------------
Operating income before management fees and
depreciation and amortization........................ 3,337,170 3,561,919
------------ ------------
Management fees and depreciation and amortization:
Management fees--affiliates.......................... 358,113 454,258
Depreciation and amortization........................ 2,092,858 2,207,660
------------ ------------
2,450,971 2,661,918
------------ ------------
Operating income....................................... 886,199 900,001
Interest expense....................................... 4,955,734 10,374,922
------------ ------------
Net loss............................................... (4,069,535) (9,474,921)
Deficit, beginning of period........................... (36,462,819) (43,379,614)
------------ ------------
Deficit, end of period................................. $(40,532,354) $(52,854,535)
============ ============
</TABLE>

See notes to unaudited condensed consolidated financial statements.
F-61
<PAGE> 224

TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997

<TABLE>
<CAPTION>
1996 1997
----------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss.............................................. $(4,069,535) $ (9,474,921)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization...................... 2,092,858 2,207,660
Interest deferral.................................. 3,012,406 1,975,012
Management fees--affiliates........................ 358,113 454,258
Provision for losses on accounts receivable........ 158,144 305,581
Increase in fair value of redeemable stock
warrants......................................... -- 5,356,000
----------- ------------
Other.............................................. 849 335
Changes in operating assets and liabilities:
Accounts receivable--nonbarter................... (6,589) (490,939)
Other current assets............................. (115,852) (114,795)
Accounts payable and other accrued expenses...... (587,980) (863,160)
Affiliates activity--net......................... (135,961) 886,715
Accrued interest................................. 478,336 1,073,705
----------- ------------
Net cash provided by operating activities..... 1,184,789 1,315,451
----------- ------------
Cash flows from investing activities:
Capital expenditures.................................. (255,344) (227,926)
Purchase of radio stations............................ -- (14,170,000)
Other................................................. 2,500 1,500
----------- ------------
Net cash used in investing activities......... (252,844) (14,396,426)
----------- ------------
Cash flows from financing activities:
Borrowings............................................ 79,361 16,000,000
Payments of long-term debt............................ (1,575,046) (1,408,350)
Loan origination fees and other intangible assets..... (25,000) (145,334)
Other................................................. (1,714) (363)
----------- ------------
Net cash provided by (used in) financing
activities.................................. (1,522,399) 14,445,953
----------- ------------
Net increase (decrease) in cash and cash equivalents.... (590,454) 1,364,978
Cash and cash equivalents, beginning of period.......... 1,904,258 2,343,395
----------- ------------
Cash and cash equivalents, end of period................ $ 1,313,804 $ 3,708,373
=========== ============
</TABLE>

See notes to consolidated financial statements.
F-62
<PAGE> 225

TELE-MEDIA BROADCASTING COMPANY
AND ITS PARTNERSHIP INTERESTS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997

1. BASIS OF PRESENTATION

The condensed consolidated balance sheet as of June 30, 1997 and the
condensed consolidated statements of operations and changes in deficit and cash
flows for the six month periods ended June 30, 1996 and 1997 are unaudited. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation for the periods presented
have been included. These interim unaudited condensed consolidated financial
statements for 1996 and 1997 should be read in conjunction with the audited
consolidated financial statements and notes thereto. The consolidated results of
operations for the six months ended June 30, 1997 are not necessarily indicative
of the results to be expected for the full year.

2. BUSINESS ACQUISITIONS

On February 27, 1997, the Company purchased substantially all of the assets
of two radio stations in the Wilkes-Barre/Scranton, Pennsylvania market for
approximately $3,400,000. The acquisition was accounted for under the purchase
method, with approximately $500,000 allocated to property, plant and equipment
and approximately $2,900,000 allocated to intangibles.

On April 18, 1997, the Company closed the acquisition of two additional
radio stations in the Wilkes-Barre/Scranton, Pennsylvania market for
approximately $11,000,000. The acquisition was financed by $12,000,000 of
additional borrowings under the Amended Loan Agreement. The acquisition was
accounted for under the purchase method, with approximately $1,722,000 allocated
to property, plant and equipment and approximately $9,278,000 allocated to
intangibles.

On May 5, 1997, the Company closed the acquisition of a radio station in
the Quincy, Illinois market for approximately $345,000. The acquisition was
financed primarily by an unsecured seller note and assumption of capital leases.
The acquisition was accounted for under the purchase method, with approximately
$148,000 allocated to property and equipment and approximately $197,000
allocated to intangibles.

3. SUBSEQUENT EVENTS

On July 3, 1997, all of the issued and outstanding stock of the Company was
acquired by Citadel Broadcasting Company, a subsidiary of Citadel Communications
Corporation for approximately $114,400,000. In connection with the acquisition
by Citadel Broadcasting Company, a Change of Control occurred. The Change of
Control has a material effect on the financial statements due to the change in
the earliest put date of the redeemable stock warrants. The Warrant holders have
put rights as of January 1, 2000 or upon a Change of Control. TMBC estimated the
redemption price of the warrants at December 31, 1996 as $7,000,000, and the
accreted value of the warrants at December 31, 1996 was $1,644,000. Previously,
increases in the redemption price were accounted for prospectively as an
adjustment to periodic interest expense from the date of the increase to January
1, 2000, the earliest date the put could be exercised. However, due to the
Change of Control on July 3, 1997, the earliest put date is July 3, 1997 and the
warrants must be accreted to their full value by this time. The accreted value
of the warrants at December 31, 1996 was $1,644,000, thus resulting in a charge
to interest expense of $5,356,000 during the six months ended June 30, 1997 to
accrete the warrants to their $7,000,000 redemption price.

F-63
<PAGE> 226

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Snider Corporation:

We have audited the accompanying consolidated balance sheet of Snider
Corporation as of December 31, 1995 and the related consolidated statements of
income, stockholders' equity, and cash flows for the year then ended. We have
also audited the accompanying balance sheet of Snider Corporation as of December
31, 1996 and the related statements of income, stockholders' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Snider
Corporation as of December 31, 1995 and the consolidated results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles. Also, in our opinion, the financial
statements referred to above present fairly, in all material respects, the
financial position of Snider Corporation as of December 31, 1996 and the results
of its operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

As discussed in Notes 3, 6 and 7, the Company has significant transactions
with related parties.

Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The combining information is
presented for purposes of additional analysis of the financial statements. The
combining information has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.

/s/ ERWIN & COMPANY

Little Rock, Arkansas
April 1, 1997

F-64
<PAGE> 227

SNIDER CORPORATION

BALANCE SHEETS
DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................... $ 44,870 $ 105,788
Accounts receivable, net of allowance for doubtful
accounts of $26,652 in 1995 and $34,461 in 1996...... 566,180 475,065
Due from affiliates..................................... 61,352 38,146
Other................................................... 34,495 20,867
---------- ----------
Total current assets................................. 706,897 639,866
Other assets:
Non-compete covenant.................................... -- 45,833
Land held for investment, at cost, which approximates
market value......................................... 123,396 97,553
Other................................................... -- 18,536
---------- ----------
Total other assets................................... 123,396 161,922
Property and equipment, at cost less accumulated
depreciation............................................ 666,934 874,992
---------- ----------
$1,497,227 $1,676,780
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable--related party............................. $ 50,000 $ 50,000
Accounts payable--trade................................. 128,416 152,388
--other............................... 385 --
Accrued expenses........................................ 96,593 86,481
---------- ----------
Total current liabilities............................ 275,394 288,869
Stockholders' equity:
Common stock, no par value; 1,000 shares authorized, 100
shares issued and outstanding........................ 143,000 143,000
Paid in capital......................................... 62,298 474,300
Retained earnings....................................... 1,016,535 770,611
---------- ----------
Total stockholders' equity........................... 1,221,833 1,387,911
---------- ----------
$1,497,227 $1,676,780
========== ==========
</TABLE>

See accompanying notes.
F-65
<PAGE> 228

SNIDER CORPORATION

STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
Revenue:
Announcements and programs.............................. $3,510,863 $3,583,944
Barter accounts......................................... 360,616 428,129
---------- ----------
Total revenue................................... 3,871,479 4,012,073
---------- ----------
Direct charges:
Commissions............................................. 440,461 450,944
Royalties and franchise fees............................ 93,744 140,303
---------- ----------
Total direct charges............................ 534,205 591,247
---------- ----------
Gross profit.............................................. 3,337,274 3,420,826
---------- ----------
Operating expenses:
Technical department.................................... 57,985 95,416
Program department...................................... 608,416 509,877
News department......................................... 264,837 255,458
Sales department........................................ 839,461 859,674
General and administrative.............................. 926,945 974,815
Depreciation and amortization........................... 81,232 186,723
---------- ----------
Total operating expenses........................ 2,778,876 2,881,963
---------- ----------
Operating income.......................................... 558,398 538,863
Other income (expense):
Interest income......................................... 5,275 3,168
Interest expense........................................ (8,548) (6,917)
Loss on sale of property and equipment.................. -- (59,024)
Minority interest....................................... (48,004) --
Operating agreement--acquired stations.................. -- (65,698)
Other................................................... (30,540) (124,316)
---------- ----------
Total other income (expense).................... (81,817) (252,787)
---------- ----------
Net income................................................ $ 476,581 $ 286,076
========== ==========
</TABLE>

See accompanying notes
F-66
<PAGE> 229

SNIDER CORPORATION

STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS TOTAL
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Balance -- December 31, 1994....... $143,000 $ 62,298 $ 868,958 $1,074,256
Net income....................... -- -- 476,581 476,581
Distributions to stockholders.... -- -- (329,004) (329,004)
-------- -------- ---------- ----------
Balance -- December 31, 1995....... 143,000 62,298 1,016,535 1,221,833
Net income....................... -- -- 286,076 286,076
Capital contribution............. -- 412,002 -- 412,002
Distributions to stockholders.... -- -- (532,000) (532,000)
-------- -------- ---------- ----------
Balance -- December 31, 1996....... $143,000 $474,300 $ 770,611 $1,387,911
======== ======== ========== ==========
</TABLE>

See accompanying notes
F-67
<PAGE> 230

SNIDER CORPORATION

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
1995 1996
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income................................................ $ 476,581 $ 286,076
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.......................... 81,232 186,723
Loss on disposal of assets............................. -- 59,023
Minority interest...................................... 48,004 --
Recognition of unearned income......................... (107,813) --
Bad debt provision..................................... 30,636 34,461
Net changes in operating assets and liabilities:
Accounts receivable.................................. (173,698) 56,654
Other current assets................................. 77,524 13,628
Other non-current assets............................. -- (18,536)
Accounts payable..................................... (15,065) 23,587
Accrued expenses..................................... 6,280 (10,112)
--------- ---------
Net cash provided by operating activities......... 423,681 631,504
--------- ---------
Cash flows from investing activities:
Purchase of property and equipment........................ (192,120) (213,240)
Purchase of land held for investment...................... (22,563) --
Proceeds from sale of property and equipment.............. -- 262,800
Net advances to affiliate................................. (49,064) (38,146)
Payment under non-compete covenant........................ -- (50,000)
--------- ---------
Net cash used in investing activities............. (263,747) (38,586)
--------- ---------
Cash flows from financing activities:
Proceeds from repayments of notes receivable.............. 107,623 --
Repayment of note payable--Bank........................... (45,044) --
Distributions to minority interest........................ (48,004) --
Distributions to stockholders............................. (329,004) (532,000)
--------- ---------
Net cash used in financing activities............. (314,429) (532,000)
--------- ---------
Net increase (decrease) in cash and cash equivalents........ (154,495) 60,918
Cash and cash equivalents:
Beginning of year......................................... 199,365 44,870
--------- ---------
End of year............................................... $ 44,870 $ 105,788
========= =========
Supplemental cash flows information:
Interest paid............................................. $ 8,548 $ 6,917
Significant non-cash investing and financing activities:
Non-cash purchase of property and equipment from
affiliate............................................ -- 473,353
Non-cash contribution of capital....................... -- 412,002
</TABLE>

See accompanying notes
F-68
<PAGE> 231

SNIDER CORPORATION

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1996

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of consolidation

The consolidated financial statements include the accounts of Snider
Corporation (the Company) and SMN Company (SMN), a 52% owned partnership. All
significant intercompany transactions and accounts have been eliminated in
consolidation. SMN was liquidated effective December 31, 1995.

Nature of operations

The Company operates an AM radio station and two FM radio stations in the
central Arkansas market area and provides news and information to other radio
stations throughout Arkansas. The activities of SMN were not material to 1995
consolidated financial position or results of operations.

Accounting estimates

Depreciation and amortization

Depreciation is calculated by the straight-line method. Estimated useful
lives are as follows:

<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Transmitter building, antenna system, office machines and
equipment................................................. 3-25
Furniture and fixtures...................................... 5-10
Vehicles.................................................... 2- 4
Other....................................................... 3- 5
</TABLE>

Non-compete covenant

The non-compete covenant with the former owner of certain radio
broadcasting assets acquired in 1996 is being amortized on a straight-line basis
over a period of two years. Total amortization expense was for 1996 was $4,167.

Statement of cash flows

For purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less when purchased
to be cash equivalents.

Concentrations of credit risk

Most of the Company's business activity is with customers located within
the state of Arkansas. The Company grants credit to its customers in the normal
course of business, ordinarily without collateral requirements.

The Company's exposure to credit risk from accounts receivable--trade and
notes receivable is represented by the carrying value of those receivables. The
Company also periodically has demand deposit balances with a local financial
institution that exceed federally insured limits.

F-69
<PAGE> 232
SNIDER CORPORATION

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1996 -- CONTINUED

Management periodically reviews the soundness of this financial institution and
does not believe the Company is exposed to significant financial risk.

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

Reclassifications

Certain reclassifications have been made to the 1995 financial statements
to conform to the 1996 basis of presentation.

(2) PROPERTY AND EQUIPMENT:

Property and equipment at December 31, 1995 and 1996 consists of the
following:

<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
Land..................................... $ 301,252 $ 57,700
Transmitter building..................... 87,879 87,879
Antenna system........................... 91,736 91,736
Satellite equipment...................... -- 473,353
Equipment................................ 452,326 650,906
Office machines.......................... 325,787 339,616
Furniture and fixtures................... 149,455 150,289
Vehicles................................. 63,623 56,272
Other.................................... 198,714 78,831
---------- ----------
1,670,772 1,986,582
Less accumulated depreciation............ 1,003,838 1,111,590
---------- ----------
$ 666,934 $ 874,992
========== ==========
</TABLE>

(3) NOTE PAYABLE--RELATED PARTY:

Note payable--related party at December 31, 1995 and 1996 consists of an
unsecured note payable to a stockholder. The note bears interest at 8% and is
due on demand.

(4) INCOME TAXES:

The Company has elected to be treated as an S corporation for federal
income tax purposes and is subject to similar treatment for state income tax
purposes. Under this election, income and losses of the Company are reported in
the income tax returns of the stockholders. As a result, no income taxes are
reflected in the accompanying consolidated financial statements.

(5) ACQUISITIONS:

During 1996, the Company acquired the assets, including broadcast rights
for a local FM radio. Prior to FCC approval of the acquisition, the station was
operated by the Company under a license management agreement. Expenses incurred
under this agreement totaling $65,698 are included in the accompanying 1996
statement of income under the heading "Other Income (Expenses)."

F-70
<PAGE> 233
SNIDER CORPORATION

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1996 -- CONTINUED

(5) ACQUISITION (CONTINUED):

The acquisition cost of the broadcast assets were allocated as follows:

<TABLE>
<S> <C>
Property and equipment......................... $132,820
Non-compete covenant........................... 50,000
--------
Total................................ $182,820
========
</TABLE>

(6) COMMITMENTS AND CONTINGENCIES:

The Company leases its office building and parking lot under an operating
lease from an officer and principal stockholder of the Company for $10,000 per
month. Additionally, the Company rented satellite space from an affiliate under
an informal lease agreement totaling $107,950 and $6,300 during the years ended
December 31, 1995 and 1996, respectively. Total rent expense was $245,377 and
$140,400 for the years ended December 31, 1995 and 1996, respectively. Rent
expense was offset by $54,000 in 1995 and $48,320 in 1996 by amounts received
from an affiliate under a month to month sublease agreement for office space.

Future minimum rentals under noncancelable operating leases, including
renewal options, at December 31, 1996 are as follows:

(7) RELATED PARTY TRANSACTIONS:

General and administrative expense has been reduced by $23,282 and $21,000
in 1995 and 1996, respectively, for shared office and overhead expenses charged
to an affiliate. The amounts shown in the accompanying balance sheets as due
from affiliates represent amounts owed to the Company for these and certain
other operating expenses paid by the Company on behalf of affiliates.

During 1996, the Company purchased satellite communications equipment from
an affiliate for $473,353. In connection with the purchase, the Company's
stockholders transferred certain assets of another affiliate with a fair value
of $412,002 to the Company. The transfer was recorded as a capital contribution.
These contributed assets, plus accounts receivable due from the affiliate
totaling $61,351 were exchanged for the satellite communications equipment.

Information concerning the note payable--related party is contained in Note
3. Information concerning lease and other rental income and expenses with
related parties is described in Note 5.

F-71
<PAGE> 234

SNIDER CORPORATION

SCHEDULE OF COMBINING OPERATING INCOME,
EXCLUDING DEPRECIATION AND AMORTIZATION
FOR BROADCASTING UNITS
YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
KARN ARN COMBINED
---------- ---------- ----------
<S> <C> <C> <C>
Revenue:
Local announcements........................ $1,604,785 $1,353,472 $2,958,257
National announcements..................... 135,805 -- 135,805
Political announcements.................... 68,318 193,539 261,857
Network.................................... 77,236 -- 77,236
Materials and facilities................... 71,411 79,378 150,789
Barter accounts............................ 289,797 138,332 428,129
---------- ---------- ----------
Total revenue...................... 2,247,352 1,764,721 4,012,073
Less direct charges:
Agency commissions......................... 156,538 187,616 344,154
National representative commissions........ 16,676 90,114 106,790
Rights fees................................ 78,426 61,877 140,303
---------- ---------- ----------
Totals............................. 251,640 339,607 591,247
---------- ---------- ----------
Gross profit................................. 1,995,712 1,425,114 3,420,826
Operating expenses:
Technical department....................... 73,611 21,805 95,416
Program department......................... 356,247 153,630 509,877
News department............................ 115,269 140,189 255,458
Sales department........................... 480,476 379,198 859,674
General and administrative................. 633,288 341,527 974,815
---------- ---------- ----------
Total operating expenses, excluding
depreciation and amortization.... 1,658,891 1,036,349 2,695,240
---------- ---------- ----------
Operating income, excluding depreciation and
amortization............................... $ 336,821 $ 388,765 $ 725,586
========== ========== ==========
</TABLE>

F-72
<PAGE> 235

SNIDER CORPORATION

BALANCE SHEET
MAY 31, 1997
(UNAUDITED)

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 45,972
Accounts receivable--trade, net of allowance for doubtful
accounts of $38,228.................................... 780,901
Due from affiliates....................................... 44,589
Other..................................................... 7,941
----------
Total current assets.............................. 879,403
Property and equipment, at cost less accumulated
depreciation of $1,193,204................................ 813,910
Other assets:
Non-compete agreement, less accumulated amortization of
$14,583................................................ 35,417
Land held for investment, at cost, which approximates
market value........................................... 97,553
Other..................................................... 25,692
----------
Total other assets................................ 158,662
----------
$1,851,975
==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable--related party............................... $ 50,000
Accounts payable--trade................................... 190,990
Accrued expenses.......................................... 103,427
----------
Total current liabilities......................... 344,417
Stockholders' equity:
Common stock, no par value; 1,000 shares authorized, 100
shares issued and outstanding.......................... 143,000
Paid-in capital........................................... 474,300
Retained earnings......................................... 890,258
----------
Total stockholders' equity........................ 1,507,558
----------
$1,851,975
==========
</TABLE>

See accompanying notes to financial statements.
F-73
<PAGE> 236

SNIDER CORPORATION

STATEMENT OF INCOME
FIVE MONTHS ENDED MAY 31, 1997
(UNAUDITED)

<TABLE>
<S> <C>
Revenue:
Announcements and programs............................. $1,694,439
Barter accounts........................................ 140,783
----------
Total revenue..................................... 1,835,222
Direct charges:
Commissions............................................ 261,257
Royalties and franchise fees........................... 42,210
----------
Total direct charges.............................. 303,467
----------
Gross profit................................................ 1,531,755
----------
Operating expenses:
Technical department................................... 52,958
Program department..................................... 263,608
News department........................................ 99,351
Sales department....................................... 439,047
General and administrative............................. 437,718
Depreciation and amortization.......................... 92,030
----------
Total operating expenses.......................... 1,384,712
----------
Operating income............................................ 147,043
Other income (expense):
Interest income........................................ 733
Interest expense....................................... (1,677)
Other.................................................. (26,452)
----------
Total other income (expense)...................... (27,396)
----------
Net income.................................................. $ 119,647
==========
</TABLE>

See accompanying notes to financial statements.
F-74
<PAGE> 237

SNIDER CORPORATION

STATEMENT OF STOCKHOLDERS' EQUITY

FIVE MONTHS ENDED MAY 31, 1997
(UNAUDITED)

<TABLE>
<CAPTION>
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS TOTAL
-------- -------- -------- ----------
<S> <C> <C> <C> <C>
Balance -- December 31, 1996......... $143,000 $474,300 $770,611 $1,387,911
Net income........................... -- -- 119,647 119,647
-------- -------- -------- ----------
Balance -- May 31, 1997.............. $143,000 $474,300 $890,258 $1,507,558
======== ======== ======== ==========
</TABLE>

See accompanying notes to financial statements.
F-75
<PAGE> 238

SNIDER CORPORATION

STATEMENT OF CASH FLOWS
FIVE MONTHS ENDED MAY 31, 1997
(UNAUDITED)

<TABLE>
<S> <C>
Cash flows from operating activities:
Net income................................................ $119,647
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization.......................... 92,030
Bad debt provision..................................... 12,155
Net changes in operating assets and liabilities:
Accounts receivable--trade........................... (317,991)
Other current assets................................. 12,926
Other non-current assets............................. (7,156)
Accounts payable--trade.............................. 38,602
Accrued expenses..................................... 16,946
--------
Net cash used in operating activities............. (32,841)
--------
Cash flows from investing activities:
Capital expenditures...................................... (20,532)
Net advances to affiliate................................. (6,443)
--------
Net cash used in investing activities............. (26,975)
--------
Net decrease in cash and cash equivalents................... (59,816)
Cash and cash equivalents:
Beginning of period....................................... 105,788
--------
End of period............................................. $ 45,972
========
Supplemental cash flows information:
Interest paid............................................. $ 1,677
========
</TABLE>

See accompanying notes to financial statements.
F-76
<PAGE> 239

SNIDER CORPORATION

NOTE TO FINANCIAL STATEMENTS
MAY 31, 1997
(UNAUDITED)

(1) SUBSEQUENT EVENT

On June 2, 1997, Snider Corporation (the "Company") entered into a local
marketing agreement ("LMA") with Citadel Broadcasting Company ("Citadel")
whereby Citadel pays $89,000 per month to the Company in exchange for supplying
specified programming to the brokered stations and marketing all commercial
advertising time of the brokered stations, subject to the Company's right to
control the content of all programming. On the same date, the Company also
entered into a Merger Agreement with Citadel, upon the consummation of which
Citadel will acquire radio stations KARN-FM, KARN-AM, KKRN-FM, KRNN-AM and
KAFN-FM. The LMA shall terminate upon the closing of the Merger Agreement or the
termination of the Merger Agreement, unless terminated earlier pursuant to the
default provisions of the LMA. In compliance with the LMA, the broadcasting
revenue and station operating expenses of the Company for the month ended June
30, 1997 are included in the financial statements of Citadel and are summarized
as follows:

<TABLE>
<S> <C>
Net broadcasting revenues................................ $270,289
Station operating expenses............................... 304,259
</TABLE>

F-77
<PAGE> 240

SNIDER CORPORATION
BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 191,595
Accounts receivable--trade, net of allowance for doubtful
accounts of $45,546.................................... 800,790
Due from affiliates....................................... 25,617
Other..................................................... 4,106
----------
Total current assets.............................. 1,022,108
Property and equipment, at cost less accumulated
depreciation of $1,017,541................................ 808,870
Other assets:
Land held for investment, at cost, which approximates
market value........................................... 97,553
Other..................................................... 11,240
----------
Total other assets................................ 108,793
----------
$1,939,771
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable--related party............................... $ 50,000
Accounts payable--trade................................... 153,348
Accrued expenses.......................................... 132,907
----------
Total current liabilities......................... 336,255
Stockholders' equity:
Common stock, no par value; 1,000 shares authorized, 100
shares issued and outstanding.......................... 143,000
Paid-in capital........................................... 474,300
Retained earnings......................................... 986,216
----------
Total stockholders' equity........................ 1,603,516
----------
$1,939,771
==========
</TABLE>

F-78
<PAGE> 241

SNIDER CORPORATION

STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)

<TABLE>
<S> <C>
Revenue:
Announcements and programs................................ $1,893,131
Barter accounts........................................... 214,064
----------
Total revenue..................................... 2,107,195
Direct charges:
Commissions............................................... 266,398
Royalties and franchise fees.............................. 65,599
----------
Total direct charges.............................. 331,997
----------
Gross profit................................................ 1,775,198
----------
Operating expenses:
Technical department...................................... 35,290
Program department........................................ 236,052
News department........................................... 125,103
Sales department.......................................... 414,766
General and administrative................................ 511,160
Depreciation and amortization............................. 88,507
----------
Total operating expenses.......................... 1,410,878
----------
Operating income............................................ 364,320
Other income (expense):
Loss on sale of property and equipment.................... (59,024)
Interest expense.......................................... (2,541)
Operating agreement--stations under contract.............. (36,839)
Other..................................................... (39,235)
----------
Total other income (expense)...................... (137,639)
----------
Net income.................................................. $ 226,681
==========
</TABLE>

F-79
<PAGE> 242

SNIDER CORPORATION
STATEMENT OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS TOTAL
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Balance--December 31, 1995............... $143,000 $ 62,298 $1,016,535 $1,221,833
Net income............................... 226,681 226,681
Capital contribution..................... 412,002 412,002
Distributions to stockholders............ (257,000) (257,000)
-------- -------- ---------- ----------
Balance--June 30, 1996................... $143,000 $474,300 $ 986,216 $1,603,516
======== ======== ========== ==========
</TABLE>

F-80
<PAGE> 243

SNIDER CORPORATION
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)

<TABLE>
<S> <C>
Cash flows from operating activities:
Net income................................................ $226,681
Adjustments to reconcile net income to net cash provided
by in operating activities:
Depreciation and amortization.......................... 88,507
Loss on sale of property and equipment................. 59,024
Bad debt provision..................................... 19,886
Net changes in operating assets and liabilities:
Accounts receivable--trade........................... (254,496)
Other current assets................................. 19,149
Accounts payable--trade.............................. 24,547
Accrued expenses..................................... 36,314
--------
Net cash provided by operating activities......... 219,612
--------
Cash flows from investing activities:
Capital expenditures...................................... (53,071)
Proceeds from sale of assets.............................. 262,800
Net advances to affiliate................................. (25,616)
--------
Net cash provided by investing activities......... 184,113
--------
Cash flows from financing activities:
Distributions to stockholders............................. (257,000)
--------
Net cash used in financing activities............. (257,000)
--------
Net increase in cash and cash equivalents................... 146,725
Cash and cash equivalents:
Beginning of period....................................... 44,870
--------
End of period............................................. $191,595
========
Supplemental cash flows information:
Interest paid............................................. $ 2,541
Significant non-cash investing and financing activities:
Non-cash purchase of property and equipment from
affiliate............................................. 473,353
Non-cash contribution of capital....................... 412,002
</TABLE>

F-81
<PAGE> 244

INDEPENDENT AUDITORS' REPORT

The Boards of Directors and Stockholders
Snider Broadcasting Corporation and Subsidiary
CDB Broadcasting Corporation:

We have audited the accompanying consolidated balance sheet of Snider
Broadcasting Corporation and Subsidiary, as of December 31, 1995 and the related
consolidated statements of operations, stockholders' deficit and cash flows for
the year then ended. We have also audited the combined balance sheet of Snider
Broadcasting Corporation and Subsidiary, and CDB Broadcasting Corporation as of
December 31, 1996 and the related combined statements of operations,
stockholders' deficit and cash flows for the year then ended. These financial
statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

The combined financial statements include the financial statements of
Snider Broadcasting Corporation and Subsidiary, and CDB Broadcasting
Corporation, which are related through common ownership and management.

As described in Notes 3, 5, and 10, the Company has significant
transactions with related parties.

In our opinion, the 1995 financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Snider
Broadcasting Corporation and subsidiary as of December 31, 1995 and the
consolidated results of their operations and cash flows for the year then ended
in conformity with generally accepted accounting principles. Also, in our
opinion, the 1996 financial statements referred to above present fairly, in all
material respects, the combined financial position of Snider Broadcasting
Corporation and affiliate as of December 31, 1996 and the combined results of
their operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.

/s/ ERWIN & COMPANY

Little Rock, Arkansas
April 23, 1997

F-82
<PAGE> 245

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

COMBINED BALANCE SHEETS
DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
1995 1996
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash.................................................. $ 30,813 $ 49,821
Accounts receivable, net of allowance for doubtful
accounts of $8,108 in 1995 and $7,000 in 1996...... 305,154 376,579
Other.............................................. 2,302 15,366
----------- -----------
Total current assets............................... 338,269 441,766
Property and equipment, at cost less accumulated
depreciation (Note 2)................................. 59,706 292,286
Other assets:
Excess of cost over carrying value of net assets
acquired, less accumulated amortization of $117,476
in 1995 and $130,936 in 1996....................... 309,710 796,691
Start-up costs, net of accumulated amortization of
$8,797 in 1996..................................... -- 61,588
Non-compete agreement, net of accumulated amortization
of $2,083 in 1996.................................. -- 97,917
Other assets.......................................... -- 21,189
----------- -----------
Total other assets................................. 309,710 977,385
----------- -----------
$ 707,685 $ 1,711,437
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable--stockholders (Note 3).................. $ 52,698 $ --
Note payable--bank (Note 4)........................... -- 2,637,408
Current maturities of long-term debt (Note 5)......... 206,781 --
Accounts payable--trade............................... 109,406 218,422
Income taxes payable.................................. 2,117 7,803
Accrued expenses...................................... 12,526 45,778
Accrued interest payable (Note 10).................... 14,548 10,714
Deferred income taxes (Note 8)........................ -- 2,297
----------- -----------
Total current liabilities..................... 398,076 2,922,422
Long-term debt, less current maturities (Note 5)........ 1,386,490 --
----------- -----------
Total liabilities............................. 1,784,566 2,922,422
Stockholders' deficit:
Common stock (Note 6)................................. 75,213 75,313
Retained deficit...................................... (1,152,094) (1,286,298)
----------- -----------
Total stockholders' deficit................... (1,076,881) (1,210,985)
----------- -----------
$ 707,685 $ 1,711,437
=========== ===========
</TABLE>

See accompanying notes.
F-83
<PAGE> 246

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

COMBINED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
Revenue:
Announcements and programs............................. $2,097,623 $2,008,315
Barter accounts........................................ 145,608 137,963
---------- ----------
Total revenue.................................. 2,243,231 2,146,278
Less direct charges--commissions......................... 286,944 264,907
---------- ----------
Gross profit............................................. 1,956,287 1,881,371
---------- ----------
Operating expenses:
Technical department................................... 45,339 55,616
Program department..................................... 305,344 384,480
Sales department....................................... 377,007 439,883
General and administrative............................. 465,647 679,475
Ratings enhancement.................................... -- 105,498
Time brokerage......................................... -- 60,470
Consulting and non-compete (Note 9).................... 64,733 64,733
Goodwill amortization.................................. 10,680 13,460
Depreciation and amortization.......................... 27,046 78,820
---------- ----------
Total operating expenses....................... 1,295,796 1,882,435
---------- ----------
Operating income (loss).................................. 660,491 (1,064)
---------- ----------
Other income (expense):
Interest expense (Note 10)............................. (189,532) (150,553)
Rent (Note 10)......................................... 12,000 30,000
Other.................................................. -- 39
---------- ----------
Total other income (expense)................... (177,532) (120,514)
---------- ----------
Income (loss) before income taxes........................ 482,959 (121,578)
Provision for income taxes (Note 8)...................... 2,117 12,626
---------- ----------
Net income (loss)........................................ $ 480,842 $ (134,204)
========== ==========
</TABLE>

See accompanying notes.
F-84
<PAGE> 247

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

COMBINED STATEMENTS OF STOCKHOLDERS' DEFICIT
YEARS ENDED DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
COMMON RETAINED
STOCK DEFICIT TOTAL
------- ----------- -----------
<S> <C> <C> <C>
Balance--December 31, 1994................... $75,213 $(1,632,936) $(1,557,723)
Net income................................. -- 480,842 480,842
------- ----------- -----------
Balance--December 31, 1995................... 75,213 (1,152,094) (1,076,881)
Common stock issued........................ 100 -- 100
Net loss................................... -- (134,204) (134,204)
------- ----------- -----------
Balance--December 31, 1996................... $75,313 $(1,286,298) $(1,210,985)
======= =========== ===========
</TABLE>

See accompanying notes.
F-85
<PAGE> 248

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

COMBINED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
1995 1996
--------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)....................................... $ 480,842 $ (134,204)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation......................................... 27,046 42,899
Amortization......................................... 10,680 49,381
Deferred income taxes................................ -- 2,297
Loss on sale of property and equipment............... -- 458
Net changes in operating assets and liabilities:
Accounts receivable................................ (56,489) (71,425)
Other assets....................................... 446 (59,294)
Accounts payable................................... 2,896 99,824
Accrued expenses................................... 12,707 38,938
Accrued interest payable........................... (113,269) (3,834)
--------- -----------
Net cash provided by (used in) operating
activities.................................... 364,859 (34,960)
--------- -----------
Cash flows from investing activities:
Acquisition of business assets.......................... (14,921) (768,011)
Non-compete agreement................................... -- (100,000)
Other................................................... -- (69,560)
--------- -----------
Net cash used in investing activities........... (14,921) (937,571)
--------- -----------
Cash flows from financing activities:
Repayment of borrowings--affiliates..................... (186,825) (1,291,759)
--other.......................... (169,347) (494,210)
Proceeds from borrowings................................ -- 2,777,408
Common stock issued..................................... -- 100
--------- -----------
Net cash provided by (used in) financing
activities.................................... (356,172) 991,539
--------- -----------
Net increase (decrease) in cash........................... (6,234) 19,008
Cash:
Beginning of year....................................... 37,047 30,813
--------- -----------
End of year............................................. $ 30,813 $ 49,821
========= ===========
Supplemental information:
Interest paid........................................... $ 302,800 $ 154,387
Income taxes paid....................................... -- 4,643
Non-cash investing activities:
Equipment acquired through trade..................... 2,333 9,192
</TABLE>

See accompanying notes.
F-86
<PAGE> 249

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1996

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Reporting Entity

The accompanying 1995 financial statements include the accounts of Snider
Broadcasting Corporation and its wholly-owned subsidiary, Cornerstone
Broadcasting Corporation (Snider). The accompanying 1996 financial statements
include these accounts combined with those of CDB Broadcasting Corporation
(CDB), a company affiliated through common ownership and management. CDB was
incorporated and began operations May 17, 1996. All significant intercompany
transactions and accounts have been eliminated.

Nature of Operations

Snider and CDB operate FM radio stations in the Central Arkansas market
area.

Accounting Estimates

Property and Equipment

Depreciation of property and equipment is calculated using the accelerated
and modified accelerated cost recovery systems. Depreciation calculated under
these methods does not differ significantly from amounts calculated under
methods and lives which conform to generally accepted accounting principles.

Estimated useful lives of property and equipment are as follows:

<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Tower............................................... 5-10
Radio, office and computer equipment................ 3- 7
Vehicle............................................. 5
</TABLE>

Intangible Assets

The excess of cost over carrying value of assets acquired for Snider
Broadcasting Corporation is being amortized over 40 years using the
straight-line method. The excess of cost over carrying value of assets acquired
of CDB Broadcasting Corporation is being amortized over 15 years using the
straight-line method.

The non-compete agreement is being amortized over 24 months using the
straight-line method. Start-up costs are being amortized over five years using
the straight-line method.

Asset Impairment

In the event that facts and circumstances indicate that the carrying value
of long-lived assets may be impaired, an evaluation of recoverability would be
performed. If an evaluation is required,
F-87
<PAGE> 250
SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

the estimated future undiscounted cash flows associated with the asset would be
compared to the asset's carrying amount to determine if a write-down to fair
value or a value based on discounted cash flows is required.

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

Income Taxes

Snider incurred net operating losses from the date of its incorporation on
January 1, 1985 through 1991. At December 31, 1996 there are approximately
$610,000 of net operating loss carryforwards available for federal income tax
purposes. These loss carryforwards will expire beginning in the year 2000 if not
previously used to offset future net taxable income. In addition, Snider has
approximately $3,600 in general business credit carryforwards that expire in
2000 and 2001.

Snider provides for deferred income taxes under the provisions of Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes." This
statement provides for a liability approach under which deferred income taxes
are based on enacted tax laws and rates applicable to the periods in which the
taxes become payable.

CDB has elected to be treated as an S corporation for federal income tax
purposes and is subject to similar treatment for state income tax purposes.
Under this election, income and losses of CDB are reported in the income tax
returns of the stockholders. As a result, no provision for income taxes for CDB
is reflected in the accompanying combined financial statements.

Statement of Cash Flows

For purposes of the statement of cash flows, the Companies consider cash on
hand and deposits in financial institutions with initial maturities of three
months or less as cash.

Concentrations of Credit Risk

Most of the Companies' business activity is with customers located within
the central region of Arkansas. The Companies' grant credit to their customers
in the normal course of business, ordinarily without collateral requirements.

Reclassifications

Certain reclassifications have been made to the 1995 financial statements
to conform to the 1996 basis of presentation.

F-88
<PAGE> 251
SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(2) PROPERTY AND EQUIPMENT:

Property and equipment at December 31, 1995 and 1996 consists of the
following:

<TABLE>
<CAPTION>
1995 1996
-------- --------
<S> <C> <C>
Tower....................................... $ 89,909 $104,642
Radio equipment............................. 186,059 404,648
Office equipment............................ 67,357 95,921
Computer equipment.......................... 37,727 52,604
Vehicle..................................... 20,113 9,859
-------- --------
401,165 667,674
Less accumulated depreciation............... 341,459 375,388
-------- --------
$ 59,706 $292,286
======== ========
</TABLE>

(3) NOTES PAYABLE -- STOCKHOLDERS:

Notes payable -- stockholders at December 31, 1995 consist of unsecured
demand notes payable to stockholders of Snider bearing interest at 10.25% at
December 31, 1995.

(4) NOTE PAYABLE -- BANK:

Note payable-bank represents a short-term, $3,000,000 credit facility
shared by Snider and CDB. The note matures June 12, 1997, and is secured by
substantially all assets of the Companies and by guarantees of the Companies
stockholders.

The agreement requires the maintenance of certain ratios related to
leverage and debt service. In addition, the agreement contains certain
covenants, the most restrictive of which prohibit or restrict the Companies'
ability to incur additional debt; pledge assets; merge, consolidate or sell
assets; make certain "restricted" investments or loans and advances; dispose of
certain assets; make distributions to its stockholders; and engage in
transactions with their affiliates.

At December 31, 1996, the Companies were in technical default with respect
to a required leverage ratio and certain reporting requirements, however the
Companies had not defaulted on any required principal or interest payments and
were in compliance with all other ratios required under the agreement. These
technical defaults permit the lender to accelerate the scheduled due date of the
debt. Management anticipates the note to be extended during June 1997 with a new
maturity date of December 1997.

F-89
<PAGE> 252
SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(5) LONG-TERM DEBT:

Long-term debt at December 31, 1995 consists of the following:

<TABLE>
<CAPTION>
1995
----------
<S> <C>
Variable rate (9.0% at December 31, 1995); note payable
to Nationsbank of Texas, N.A......................... $ 169,500
Variable rate (10.0% at December 31, 1995) unsecured,
subordinated note payable to Snider Communications
Corporation, an affiliate; payable on demand......... 1,291,759
10.0% note payable; payable $4,067 monthly, including
interest through February 1999; secured by real
estate and personal property of Snider and guaranteed
by stockholders of Snider and by a member of the
immediate family of Snider's majority stockholder.... 132,012
----------
1,593,271
Less current portion................................... 206,781
----------
Long-term debt, less current portion................... $1,386,490
==========
</TABLE>

The note payable to affiliate of $1,291,759 at December 31, 1995 was
classified as long-term due to such affiliate waiving its right to demand
payment during the immediately following year.

(6) STOCKHOLDERS EQUITY:

Snider Broadcasting Corporation has 1,000 shares of no par value common
stock authorized and 85 shares issued and outstanding.

CDB Broadcasting Corporation has 1,000 shares of no par value common stock
authorized, issued and outstanding.

(7) RETIREMENT PLAN:

During 1995, Snider adopted a 401(k) savings plan which covers
substantially all employees who have completed one year of service and attained
the age of 21. Participating employees may contribute from 1% to 15% of their
compensation. Snider matches 25% of the first 4% contributed by participating
employees. Matching contributions totaled $3,950 and $3,727 for the years ended
December 31, 1995 and 1996, respectively.

F-90
<PAGE> 253
SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(8) INCOME TAXES:

The provision for income taxes at December 31, 1995 and 1996, consists of
the following:

<TABLE>
<CAPTION>
1995 1996
--------- --------
<S> <C> <C>
Current:
Federal................................... $ 2,117 $ --
State..................................... -- 10,329
--------- --------
2,117 10,329
--------- --------
Deferred:
Federal................................... 155,754 84,429
State..................................... 32,802 4,709
Decrease in valuation allowance........... (188,556) (86,841)
--------- --------
-- 2,297
--------- --------
Provision for income taxes.................. $ 2,117 $ 12,626
========= ========
</TABLE>

The income tax provision computed at the federal statutory rate on pretax
income differs from the reported tax provision due to the decrease in the
valuation allowance, effect of graduated rates and non-deductible expenses, and
the results of operations of CDB reported to stockholders for income tax
purposes.

The components of the net deferred tax liability at December 31, 1995 and
1996 follows:

<TABLE>
<CAPTION>
1995 1996
--------- ---------
<S> <C> <C>
Deferred tax assets:
Federal.................................. $ 295,680 $ 213,291
State.................................... 4,319 --
--------- ---------
Valuation allowance...................... (299,999) (213,158)
--------- ---------
-- 133
--------- ---------
Deferred tax liabilities:
Federal.................................. -- 2,040
State.................................... -- 390
--------- ---------
-- 2,430
--------- ---------
Net deferred tax liability................. $ -- $ (2,297)
========= =========
</TABLE>

(9) COMMITMENTS AND CONTINGENCIES:

The Companies lease office space, office equipment, broadcasting equipment
and tower facilities under operating leases expiring in 1993 through 1999. Total
rent expense under these agreements was $61,939 in 1995 and $61,159 in 1996.

Snider has commitments to pay the former owner of one of its radio stations
consulting fees and amounts due under a non-compete agreement. These commitments
extend through February 1999. Payments related to these commitments totaled
$64,733 for each of the years ended December 31, 1995 and 1996.

F-91
<PAGE> 254
SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Future commitments under noncancelable operating leases, consulting and
non-compete agreements at December 31, 1996 are as follows:

(10) RELATED PARTY TRANSACTIONS:

Interest expense in 1995 and 1996, respectively, includes $144,132 and
$56,846 related to the Company's note payable to an affiliate (Note 5). Included
in accrued expenses at December 31, 1995 is accrued interest payable of $708
related to the note.

The Company leases a subcarrier bandwidth of Snider to an affiliate to
transmit paging and weather information under an operating lease, cancelable
upon six months written notice, expiring in 2000 and requiring monthly lease
payments. Total rental income recognized under this lease was $12,000 in 1995
and $30,000 in 1996.

F-92
<PAGE> 255

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

COMBINED BALANCE SHEET
MAY 31, 1997
(UNAUDITED)

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash...................................................... $ 16,874
Accounts receivable--trade, net of allowance for doubtful
accounts of $13,110.................................... 539,057
Other..................................................... 16,652
-----------
Total current assets.............................. 572,583
Property and equipment, at cost less accumulated
depreciation of $421,330.................................. 284,067
Other assets:
Excess of cost over carrying value of net assets acquired,
less accumulated amortization of $149,287.............. 778,340
Start-up costs, net of accumulated amortization of
$14,663................................................ 55,723
Non-compete agreement, less accumulated amortization of
$22,917................................................ 77,083
-----------
Total other assets................................ 911,146
-----------
$ 1,767,796
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Note payable--bank........................................ $ 2,635,000
Accounts payable--trade................................... 277,793
--affiliate............................. 27,782
Income taxes payable...................................... 2,461
Accrued expenses.......................................... 13,056
Accrued interest payable.................................. 42,216
Deferred income taxes..................................... 4,245
-----------
Total current liabilities......................... 3,002,553
Stockholders' deficit:
Common stock.............................................. 75,313
Retained deficit.......................................... (1,310,070)
-----------
Total stockholders' deficit....................... (1,234,757)
-----------
$ 1,767,796
===========
</TABLE>

See accompanying notes to financial statements.
F-93
<PAGE> 256

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

COMBINED STATEMENT OF OPERATIONS
FIVE MONTHS ENDED MAY 31, 1997
(UNAUDITED)

<TABLE>
<S> <C>
Revenue:
Announcements and programs................................ $ 937,865
Barter accounts........................................... 65,293
----------
Total revenue..................................... 1,003,158
Less direct charges--commissions............................ 107,208
----------
Gross profit................................................ 895,950
----------
Operating expenses:
Technical department...................................... 28,843
Program department........................................ 193,887
Sales department.......................................... 222,007
General and administrative................................ 246,680
Consulting and non-compete................................ 26,972
Goodwill amortization..................................... 18,351
Depreciation and amortization............................. 91,903
----------
Total operating expenses.......................... 828,643
----------
Operating income............................................ 67,307
----------
Other income (expense):
Interest expense.......................................... (90,723)
Rent...................................................... 12,500
----------
Total other income (expense)...................... (78,223)
----------
Loss before income taxes.................................... (10,916)
Provision for income taxes.................................. 12,856
----------
Net loss.................................................... $ (23,772)
==========
</TABLE>

See accompanying notes to financial statements.
F-94
<PAGE> 257

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

COMBINED STATEMENT OF STOCKHOLDERS' DEFICIT
FIVE MONTHS ENDED MAY 31, 1997
(UNAUDITED)

<TABLE>
<CAPTION>
COMMON RETAINED
STOCK DEFICIT TOTAL
------- ----------- -----------
<S> <C> <C> <C>
Balance--December 31, 1996.................... $75,313 $(1,286,298) $(1,210,985)
Net loss...................................... -- (23,772) (23,772)
------- ----------- -----------
Balance--May 31, 1997......................... $75,313 $(1,310,070) $(1,234,757)
======= =========== ===========
</TABLE>

See accompanying notes to financial statements.
F-95
<PAGE> 258

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

COMBINED STATEMENT OF CASH FLOWS
FIVE MONTHS ENDED MAY 31, 1997
(UNAUDITED)

<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss.................................................. $ (23,772)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation......................................... 45,942
Amortization......................................... 64,313
Deferred income taxes................................ 1,948
Net changes in operating assets and liabilities:
Accounts receivable--trade........................ (134,431)
Other assets...................................... 640
Accounts payable--trade........................... 56,906
Accrued expenses.................................. (38,064)
Accrued interest payable.......................... 31,502
---------
Net cash provided by operating activities....... 4,984
---------
Cash flows from investing activities:
Capital expenditures...................................... (35,523)
---------
Net cash used in investing activities........... (35,523)
---------
Cash flows from financing activities:
Repayment of borrowings................................... (2,408)
---------
Net cash used in financing activities........... (2,408)
---------
Net decrease in cash........................................ (32,947)
Cash:
Beginning of period....................................... 49,821
---------
End of period............................................. $ 16,874
=========
Supplemental cash flows information:
Interest paid............................................. $ 59,229
Income taxes paid......................................... 16,250
Equipment acquired by trade............................... 2,200
</TABLE>

See accompanying notes to financial statements.
F-96
<PAGE> 259

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

NOTE TO COMBINED FINANCIAL STATEMENTS
MAY 31, 1997
(UNAUDITED)

(1) SUBSEQUENT EVENT

On June 2, 1997, Snider Broadcasting Corporation and Subsidiary CDB
Broadcasting Corporation (the "Company") entered into local marketing agreements
("LMA") with Citadel Broadcasting Company ("Citadel") whereby Citadel pays
$97,335 per month to the Company in exchange for supplying specified programming
to the brokered stations and marketing all commercial advertising time of the
brokered stations, subject to the Company's right to control the content of all
programming. On the same date, the Company also entered into an Asset Purchase
Agreement and a Merger Agreement with Citadel, upon the consummation of which
Citadel will acquire radio stations KESR-FM and KIPR-FM. The LMA shall terminate
upon the closing of the Merger Agreement and the Asset Purchase Agreement or the
termination of the Merger Agreement and the Asset Purchase Agreement, unless
terminated earlier pursuant to the default provisions of the LMA. In compliance
with the LMA, the broadcasting revenue and station operating expenses of the
Company for the month ended June 30, 1997 are included in the financial
statements of Citadel and are summarized as follows:

<TABLE>
<S> <C>
Net broadcasting revenues................................ $247,783
Station operating expenses............................... 169,569
</TABLE>

F-97
<PAGE> 260

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

COMBINED BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash...................................................... $ 74,209
Accounts receivable--trade, net of allowance for doubtful
accounts of $6,000..................................... 384,567
Other..................................................... 113,716
----------
Total current assets.............................. 572,492
Property and equipment, at cost less accumulated
depreciation of $346,745.................................. 69,855
Other assets:
Excess of cost over carrying value of net assets acquired,
less accumulated amortization of $122,816.............. 304,370
Start-up costs, less accumulated amortization of $2,023... 78,900
----------
Total other assets................................ 383,270
----------
$1,025,617
==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Note payable--bank........................................ $1,737,408
Accounts payable--trade................................... 137,490
Income taxes payable...................................... 3,889
Accrued expenses.......................................... 16,638
Accrued interest payable.................................. 19,132
----------
Total current liabilities......................... 1,914,557
Stockholders' deficit:
Common stock.............................................. 75,313
Retained deficit.......................................... (964,253)
----------
Total stockholders' deficit....................... (888,940)
----------
$1,025,617
==========
</TABLE>

F-98
<PAGE> 261

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)

<TABLE>
<S> <C>
Revenue:
Announcements and programs................................ $ 974,107
Barter accounts........................................... 62,690
----------
Total revenue..................................... 1,036,797
Less direct charges--commissions............................ 136,184
----------
Gross profit................................................ 900,613
----------
Operating expenses:
Technical department...................................... 27,973
Program department........................................ 156,515
Sales department.......................................... 181,298
General and administrative................................ 209,999
Ratings enhancement....................................... 7,657
Consulting and non-compete................................ 32,366
Goodwill amortization..................................... 5,340
Depreciation and amortization............................. 18,925
----------
Total operating expenses.......................... 640,073
----------
Operating income............................................ 260,540
Other income (expense):
Interest expense.......................................... (82,076)
Loss on sale of property and equipment.................... (458)
Rent...................................................... 15,000
----------
Total other income (expense)...................... (67,534)
----------
Income before income taxes.................................. 193,006
Provision for income taxes.................................. 5,165
----------
Net income.................................................. $ 187,841
==========
</TABLE>

F-99
<PAGE> 262

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

COMBINED STATEMENT OF STOCKHOLDERS' DEFICIT
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
COMMON RETAINED
STOCK DEFICIT TOTAL
------- ----------- -----------
<S> <C> <C> <C>
Balance--December 31, 1995........................ $75,213 $(1,152,094) $(1,076,881)
Common stock issued............................... 100 100
Net income........................................ 187,841 187,841
------- ----------- -----------
Balance--June 30, 1996............................ $75,313 $ (964,253) $ (888,940)
======= =========== ===========
</TABLE>

F-100
<PAGE> 263

SNIDER BROADCASTING CORPORATION AND SUBSIDIARY
CDB BROADCASTING CORPORATION

COMBINED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)

<TABLE>
<S> <C>
Cash flows from operating activities:
Net income................................................ $ 187,841
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation......................................... 14,256
Amortization......................................... 8,800
Loss on sale of property and equipment............... 458
Net changes in operating assets and liabilities:
Accounts receivable--trade........................ (79,413)
Other assets...................................... (62,851)
Accounts payable--trade........................... 28,084
Accrued expenses.................................. 5,884
Accrued interest payable.......................... 4,584
-----------
Net cash provided by operating activities....... 107,643
-----------
Cash flows from investing activities:
Capital expenditures...................................... (25,688)
Proceeds from sale of assets.............................. 825
Business acquisition costs................................ (50,000)
Start-up costs............................................ (80,923)
-----------
Net cash used in investing activities.................. (155,786)
-----------
Cash flows from financing activities:
Repayment of borrowings--bank............................. (169,500)
--affiliates.................... (1,291,759)
--others........................ (184,710)
Proceeds from borrowings.................................. 1,737,408
Common stock issued....................................... 100
-----------
Net cash provided by financing activities.............. 91,539
-----------
Net increase in cash........................................ 43,396
Cash:
Beginning of period....................................... 30,813
-----------
End of period............................................. $ 74,209
===========
Supplemental cash flows information:
Interest paid............................................. $ 77,492
===========
</TABLE>

F-101
<PAGE> 264

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Maranatha Broadcasting Company, Inc.:

We have audited the accompanying balance sheet of Maranatha Broadcasting
Company, Inc.'s Radio Broadcasting Division (the "Company") as of December 31,
1996, and the related statements of operations and division equity and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Maranatha Broadcasting
Company, Inc.'s Radio Broadcasting Division as of December 31, 1996, and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

/s/ KPMG PEAT MARWICK LLP

Phoenix, Arizona
September 29, 1997

F-102
<PAGE> 265

MARANATHA BROADCASTING COMPANY, INC.
RADIO BROADCASTING DIVISION

BALANCE SHEET
DECEMBER 31, 1996 AND SEPTEMBER 15, 1997

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 15,
1996 1997
------------ -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Accounts receivable, net of reserves of $20,000....... $ 366,278 $ 293,143
Equipment............................................. 213,800 220,562
Accumulated depreciation.............................. (140,828) (155,828)
--------- ---------
72,972 64,734
Broadcast license..................................... 10,325 9,895
--------- ---------
Total assets....................................... $ 449,575 $ 367,772
========= =========

LIABILITIES AND DIVISION EQUITY
Current Liabilities:
Accounts payable...................................... $ 11,944 $ 9,630
Trade payable......................................... 10,000 --
Accrued compensation and commissions.................. 18,091 12,537
Customer deposits..................................... 16,447 16,964
--------- ---------
Total current liabilities.......................... 56,482 39,131
Commitments and contingencies
Division equity....................................... 393,093 328,641
--------- ---------
Total liabilities and division equity.............. $ 449,575 $ 367,772
========= =========
</TABLE>

See accompanying notes to financial statements.
F-103
<PAGE> 266

MARANATHA BROADCASTING COMPANY, INC.
RADIO BROADCASTING DIVISION

STATEMENT OF OPERATIONS AND DIVISION EQUITY
YEAR ENDED DECEMBER 31, 1996 AND THE EIGHT AND ONE-HALF-MONTH PERIOD ENDED
SEPTEMBER 15, 1997

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 15,
1996 1997
------------ -------------
(UNAUDITED)
<S> <C> <C>
Revenue:
Net broadcasting revenue.............................. $2,066,271 $1,375,243
Subcarrier rental..................................... 48,796 37,333
---------- ----------
2,115,067 1,412,576
Operating expenses:
Technical expenses.................................... 75,265 54,366
Program expenses...................................... 191,363 135,229
Selling expenses...................................... 893,721 656,039
General and administrative expenses................... 279,090 213,382
Management fee and corporate overhead allocation...... 139,379 55,966
Bad debts............................................. 62,868 51,511
Depreciation and amortization......................... 20,148 15,430
---------- ----------
Total operating expenses...................... 1,661,834 1,181,923
---------- ----------
Net income.............................................. 453,233 230,653
Division equity, beginning of period.................... 421,384 393,093
Transfers to parent..................................... (481,524) (295,105)
---------- ----------
Division equity, end of period.......................... $ 393,093 $ 328,641
========== ==========
</TABLE>

See accompanying notes to financial statements.
F-104
<PAGE> 267

MARANATHA BROADCASTING COMPANY, INC.
RADIO BROADCASTING DIVISION

STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1996 AND THE EIGHT AND ONE-HALF MONTH PERIOD ENDED
SEPTEMBER 15, 1997

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 15,
1996 1997
------------ -------------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income............................................. $ 453,233 $ 230,653
Adjustment to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization..................... 20,148 15,430
Changes in assets and liabilities:
Decrease in accounts receivable................... 25,809 73,135
Decrease in accounts payable and accruals......... (740) (17,351)
--------- ---------
Net cash provided by operating activities...... 498,450 301,867
--------- ---------
Cash flows from investing activities:
Purchase of radio equipment............................ (16,926) (6,762)
--------- ---------
Net cash used in investing activities.......... (16,926) (6,762)
--------- ---------
Cash flows from financing activities:
Cash transfers to parent............................... (481,524) (295,105)
--------- ---------
Net cash used in financing activities.......... (481,524) (295,105)
--------- ---------
Net change in cash..................................... -- --
Cash, beginning of period................................ -- --
--------- ---------
Cash, end of period...................................... $ -- $ --
========= =========
</TABLE>

See accompanying notes to financial statements.
F-105
<PAGE> 268

MARANATHA BROADCASTING COMPANY, INC.
RADIO BROADCASTING DIVISION

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
(INFORMATION AS OF SEPTEMBER 15, 1997 AND FOR THE EIGHT AND ONE-HALF-MONTH
PERIOD THEN ENDED IS UNAUDITED)

(1) NATURE OF BUSINESS AND ORGANIZATION

Radio Broadcasting (the "Company") is a division of the Maranatha
Broadcasting Company, Inc. ("Maranatha"). Maranatha is a television and radio
broadcaster with facilities located in Allentown, Pennsylvania. The Company's
operations and facilities are integrated with those of Maranatha. Maranatha
provides management, accounting and certain administrative services for the
Company and charges them for these services based upon a percentage of
utilization which management believes is reasonable. Total allocated
administrative costs were $418,469 and $296,416 for the year ended December 31,
1996 and the eight and one-half months ended September 15, 1997, respectively.
Maranatha collects and retains all cash generated by the Radio Broadcasting
Division.

The Radio Broadcasting Division provides credit to customers, substantially
all of whom are regional businesses engaged in a variety of industries and
services. The Division broadcasts in the Allentown, Bethlehem, Easton region of
Eastern Pennsylvania as WLEV (formerly WFMZ) and broadcasts, through a
translator, in Reading, Pennsylvania as WLEV.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Equipment

Equipment is carried at cost, less accumulated depreciation. Depreciation
is provided on the straight-line method over the estimated useful lives of 5 to
7 years. Maintenance and repairs are charged to operations as incurred.

Use of Estimates

Revenue

Net broadcasting revenue is presented net of agency commissions and is
recognized when the advertisements are broadcast.

Trade Transactions

Revenue from trade transactions (advertising provided in exchange for goods
and services) is recognized when advertisements are broadcast and trade expense
is recognized when merchandise is consumed or services are performed. An asset
and liability are recorded at the fair market value of the goods or services
received.

F-106
<PAGE> 269
MARANATHA BROADCASTING COMPANY, INC.
RADIO BROADCASTING DIVISION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Accounts Receivable

The division generally extends 60 day credit terms to its advertisers and
maintains an allowance for uncollectible accounts based upon past experience.

Broadcast License

The broadcast license and translator license were recorded at cost and
amortized over 15 years; the license has been fully amortized.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes

Maranatha has elected by consent of its shareholders to be taxed under the
provisions of Subchapter S for federal and state income tax purposes. Under
those provisions, Maranatha does not pay corporate income taxes on its taxable
income. Instead, the shareholders are liable for individual income taxes on the
Company's taxable income. Accordingly, these financial statements do not contain
a provision for income taxes.

Interim Financial Information

The financial statements as of September 15, 1997 and for the eight and
one-half months ended September 15, 1997 are unaudited; however, in the opinion
of management, all adjustments (consisting of normal recurring adjustments)
necessary for a fair presentation of the financial statements for the interim
period have been included. The results for the interim period are not
necessarily indicative of the results to be achieved for the full fiscal year.

Division Equity

Division equity at December 31, 1996 consists of accumulated earnings of
$5,629,473 less distributions to Maranatha of $5,216,380.

(3) CONTINGENT LIABILITIES AND COMMITMENTS

Maranatha has certain debt and a revolving line of credit, which is secured
by all the assets of Maranatha, including the assets of the Radio Broadcasting
Division, as follows:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 15,
1996 1997
------------ -------------
(UNAUDITED)
<S> <C> <C>
Total notes and debt payable............ $ 506,886 $ 826,648
Less current portion.................... (190,286) (183,670)
--------- ---------
Total long-term debt.................... $ 316,600 $ 642,978
========= =========
Revolving line of credit................ $ -- $ --
========= =========
</TABLE>

The notes and line of credit bear interest primarily at the lender's prime
rate which was 8.25% and 8.5% at December 31, 1996 and September 15, 1997,
respectively. One of the notes bears interest at a fixed rate of 7.90%.
Maranatha is in compliance with the debt covenants as of September 15, 1997.
Proceeds from debt issuance were used to enhance Maranatha's television
operations.

F-107
<PAGE> 270
MARANATHA BROADCASTING COMPANY, INC.
RADIO BROADCASTING DIVISION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The Division leases its Reading translator site and Reading sales office
under operating leases with future minimum monthly payments of $800 through
November 1998. The Division has also entered into lease agreements to provide
sub-channel broadcast frequency to two lessees. The future revenue under the
lease terms is as follows:

(4) AGREEMENT OF SALE

On July 15, 1997, Maranatha entered into an asset purchase agreement with
Citadel Broadcasting Company ("CBC") and a wholly-owned subsidiary of CBC to
sell the assets and broadcast license of the Radio Broadcasting Division to CBC
for $23,000,000 plus the broadcasting assets of a radio station (WEST-AM in
Easton, Pennsylvania) owned by CBC and a wholly-owned subsidiary of CBC.

On September 15, 1997 Maranatha entered into a local marketing agreement
(LMA) with Citadel Broadcasting Company (Citadel) whereby Citadel pays $25,000
per month to the Company in exchange for supplying specified programming to the
brokered stations and marketing all commercial advertising time of the brokered
stations, subject to the Company's right to control the content of all
programming. In compliance with the LMA, the broadcasting revenue and station
operating expenses of the Company for the 15-day period from September 16, 1997
to September 30, 1997 are included in the financial statements of Citadel.

F-108
<PAGE> 271

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Pacific Northwest Broadcasting Corporation
Boise, Idaho

We have audited the accompanying combined balance sheet of Pacific
Northwest Broadcasting Corporation and Affiliates as of December 31, 1996, and
the related combined statements of operations, changes in owners' equity, and
cash flows for the year then ended. These combined financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these combined financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the combined financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall combined
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Pacific
Northwest Broadcasting Corporation and Affiliates as of December 31, 1996, and
the results of their operations and their cash flows for the year then ended in
conformity with generally accepted accounting principles.

/s/ BALUKOFF, LINDSTROM & CO., P.A.

Boise, Idaho
September 25, 1997

F-109
<PAGE> 272

PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

COMBINED BALANCE SHEET
DECEMBER 31, 1996

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash...................................................... $ 220,381
Trade accounts receivable, net of allowance for doubtful
accounts of $25,000.................................... 1,079,835
Other accounts receivable................................. 57,692
Prepaid expenses.......................................... 189,395
Accrued interest receivable............................... 18,169
Current portion of notes receivable....................... 488,880
-----------
Total current assets................................... 2,054,352
Other assets:
AM and FM broadcast licenses.............................. 4,497,916
Notes receivable, less current portion.................... 3,011,778
Noncompete agreements..................................... 354,441
Equipment deposits and other assets....................... 39,250
Deferred taxes............................................ 42,443
-----------
7,945,828
Property and equipment, at cost
Land and improvements..................................... 130,011
Leasehold improvements.................................... 61,744
Towers and antennas....................................... 402,710
Transmitters and transmitter buildings.................... 508,444
Studio and technical equipment............................ 915,007
Automobiles............................................... 44,930
Furniture and office equipment............................ 360,595
-----------
2,423,441
Accumulated depreciation.................................. (992,576)
-----------
1,430,865
-----------
$11,431,045
===========
LIABILITIES AND OWNERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 268,401
Accrued expenses.......................................... 259,479
Accrued taxes payable..................................... 12,520
Current portion of notes payable to related parties....... 106,868
Current portion of long-term debt......................... 1,195,717
-----------
Total current liabilities.............................. 1,842,985
Long-term debt:
Notes payable to related parties, less current portion.... 1,155,817
Notes payable, less current portion....................... 7,184,057
-----------
8,339,874
Deferred revenue............................................ 235,395
Owners' equity:
Convertible preferred stock, nonvoting, par value $1,000
per share, 5% non cumulative, authorized 3,500 shares,
issued and outstanding 1,396.8 shares.................. 1,396,800
Common stock, voting, no par value, authorized 10,000
shares, issued and outstanding 3,766.6 shares.......... 475,677
Members' equity........................................... 61,176
Accumulated deficit....................................... (920,862)
-----------
1,012,791
-----------
$11,431,045
===========
</TABLE>

See accompanying notes.
F-110
<PAGE> 273

PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996

<TABLE>
<S> <C>
Revenues:
Revenues.................................................. $5,404,307
Less agency and representative commissions................ 772,233
----------
4,632,074
Expenses:
Transmission.............................................. 223,366
Programming and production................................ 1,476,235
Sales..................................................... 816,459
General and administrative................................ 1,599,675
Advertising............................................... 150,696
----------
4,266,431
----------
Income from operations................................. 365,643
Nonoperating income (expense)
Gain on sale of assets.................................... 198,581
Noncompete revenue........................................ 184,508
Interest income........................................... 321,759
Interest expense.......................................... (566,783)
----------
138,065
----------
Income before income taxes............................. 503,708
Income tax expense.......................................... 182,480
----------
Net income............................................. $ 321,228
==========
</TABLE>

See accompanying notes.
F-111
<PAGE> 274

PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

COMBINED STATEMENT OF CHANGES IN OWNERS' EQUITY
YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
PREFERRED COMMON SHAREHOLDER ACCUMULATED MEMBERS'
STOCK STOCK RECEIVABLE DEFICIT EQUITY TOTAL
---------- --------- ------------ ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1,
1996............... $1,396,800 $ 591,302 $(85,445) $(1,180,914) $ -- $ 721,743
Common stock
redemption, 125
shares........... -- (115,625) -- -- -- (115,625)
Decrease in
shareholder
receivable....... -- -- 85,445 -- -- 85,445
Net income......... -- -- -- 260,052 61,176 321,228
---------- --------- -------- ----------- ------- ----------
Balance at December
31, 1996........... $1,396,800 $ 475,677 $ -- $ (920,862) $61,176 $1,012,791
========== ========= ======== =========== ======= ==========
</TABLE>

See accompanying notes.
F-112
<PAGE> 275

PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

COMBINED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1996

<TABLE>
<S> <C>
Cash flows from operating activities:
Net income................................................ $ 321,228
Adjustments to reconcile net income to net cash provided
by operating activities Amortization................... 55,427
Depreciation........................................... 71,926
Noncompete revenue..................................... (134,508)
Noncompete expense..................................... 89,257
Provision for bad debts................................ 14,029
Gain on sale of assets................................. (198,581)
Legal expense paid directly by bank.................... 10,200
Changes in operating assets and liabilities
Trade accounts receivable............................ (604,884)
Other accounts receivable............................ (5,319)
Prepaid expenses..................................... 21,658
Prepaid income tax................................... 7,739
Accrued interest receivable.......................... 9,794
Equipment deposits and other assets.................. (14,258)
Deferred taxes....................................... 169,936
Accounts payable..................................... 90,761
Accrued expenses..................................... 82,996
Accrued taxes payable................................ 12,520
---------
Net cash used by operating activities............. (79)
Cash flows from investing activities:
Payments on receivable from shareholders.................. 39
Loans made to shareholders................................ (491,256)
Payments on notes receivable.............................. 773,885
Payments for acquisition of stations...................... (63,360)
Proceeds from sale of assets.............................. 190,244
Additions to property and equipment....................... (152,300)
---------
Net cash provided by investing activities......... 257,252
Cash flows from financing activities:
Decrease in bank overdraft................................ (118,289)
Payments on notes payable................................. (282,906)
Borrowings on notes payable to related parties............ 400,000
Payment on notes payable to related parties............... (35,597)
---------
Net cash provided by financing activities......... (36,792)
---------
Net increase in cash.............................. 220,381
Cash at beginning of year................................... --
---------
Cash at end of year............................... $ 220,381
=========
</TABLE>

See accompanying notes.
F-113
<PAGE> 276

PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of Operations

The Company operates AM and FM radio stations in southwestern Idaho.
Revenues received from local advertisers and national agencies advertising in
the southwestern Idaho market account for the majority of revenues.

Principles of Combination

The financial statements include the accounts of Pacific Northwest
Broadcasting Corporation (PNWB) and its wholly owned subsidiary, (Richardson
Broadcasting Company), and Wilson Group, LLC (Wilson), a limited liability
company which has common ownership. Wilson operates as an Idaho limited
liability company and its members have limited personal liability for the
obligations or debts of the entity. Wilson will terminate no later than December
31, 2072. Intercompany accounts and transactions have been eliminated in
combination.

Allocation of Earnings

Wilson operates two broadcast signals--KIZN and KZMG. Earnings from these
two signals are reported on the balance sheet as increases or decreases in
members' equity. The other broadcast signals--KBOI, KQFC and KKGL--are operated
by PNWB. Their earnings are reported as increases or decreases in the
accumulated deficit account.

Cash

For purposes of reporting cash flows, the Company considers all highly
liquid debt instruments with a maturity of three months or less to be cash
equivalents.

Depreciation

Depreciation of property and equipment is provided using the straight line
method over the estimated useful lives of the assets, which range from 3 to 50
years.

Amortization

Costs related to obtaining AM and FM broadcast licenses are amortized using
the straight line method over fifteen years. Accumulated amortization relating
to these licenses was $133,852 at December 31, 1996.

Costs related to the noncompete agreements are amortized using the
straight-line method over five years, the term of the agreement. Accumulated
amortization relating to the noncompete agreements was $171,848 at December 31,
1996.

Deferred Revenue

Deferred revenue consists of a noncompete agreement and will be earned over
the life of the agreement (7 years).

Revenue Recognition and Trade Transactions

Broadcast revenue is recognized when the advertisements are broadcast.
Revenue from trade transactions (advertising provided in exchange for goods and
services) is recognized as income when advertisements are broadcast and trade
expense is recognized when merchandise is consumed or services are performed.

F-114
<PAGE> 277
PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996 -- CONTINUED

Advertising

The Company expenses advertising costs as they are incurred.

Income Taxes

Income taxes are provided for the tax effects of PNWB transactions reported
in the financial statements and consist of taxes currently due or recoverable
and deferred taxes related primarily to differences between the bases of assets
and liabilities for financial and income tax reporting. Differences between
financial and income tax reporting relate to accumulated depreciation,
installment sales, basis in subsidiary's stock, allowance for doubtful accounts,
deferred compensation, noncompete amortization and shareholder interest payable.

No provision has been made for the tax effects of the Wilson transactions
since Wilson is taxed as a partnership and taxes are the responsibility of the
individual members.

Estimates

Management uses estimates and assumptions in preparing financial
statements. Those estimates and assumptions affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities, and
reported revenues and expenses. Actual results could differ from these
estimates.

Concentrations of Credit Risk

In the normal course of business, the Company extends unsecured credit to
customers principally national advertising agencies and companies in the
southwestern Idaho market. The Company also has demand deposits on hand in
financial institutions which exceed applicable FDIC insurance.

Acquisitions and Local Marketing Agreement

In October, 1996, the Company acquired two radio stations in Boise, Idaho
for $5,000,000. This acquisition was accounted for using the purchase method of
accounting. The purchase price has been allocated to the assets purchased based
upon fair values as agreed to with the seller.

The Company operated the two radio stations under a Local Marketing
Agreement (LMA) for six months prior to the acquisition. Under the terms of the
LMA, the expenses of operating the stations (other than depreciation or
amortization of assets) were the obligation of the Company and the Company
received the revenues generated by the stations.

NOTE B--NOTES RECEIVABLE

The Company sold radio stations in Medford, Oregon, Chico, California, and
Eugene, Oregon in prior years and financed the sale of the radio stations to the
buyers. In 1996, the Company sold two radio stations and a building in
Pocatello, Idaho, and financed the sale. Each of the sales agreements included
provisions which restrict the Company from competing in markets served by

F-115
<PAGE> 278
PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996 -- CONTINUED

the radio stations which were sold. The noncompete agreements extend for periods
up to seven years from the dates of the sales. The terms of the notes are as
follows:

<TABLE>
<S> <C>
Note receivable from broadcasting company for Pocatello
stations at $4,003 per month through March 1997 and
$11,592 per month thereafter including interest at 8.5%,
due March 2002, secured by substantially all assets of the
Pocatello stations........................................ $ 564,993
Note receivable from broadcasting company for Pocatello
building at $2,405 per month, including interest at 8.5%,
due March 2002, secured by real estate.................... 108,884
Note receivable from broadcasting company for Chico and
Eugene stations at monthly payments ranging from $37,033
to $53,204 including interest at 7.71%, due September
2002, secured by substantially all assets of the
stations.................................................. 2,826,781
----------
3,500,658
Less current portion........................................ 488,880
----------
$3,011,778
==========
</TABLE>

NOTE C--LONG-TERM DEBT

Long-term debt is summarized as follows:

To banks:

<TABLE>
<S> <C>
Note payable to bank, monthly payments of interest only at
prime plus 1%, secured by substantially all of the
Company's assets. The interest rate at December 31, 1996
was 9.25%................................................. $8,000,000
To individuals:
Note payable to former shareholder at $1,205 per month
including interest at 8% through January 2003,
unsecured................................................. 69,440
Note payable to former shareholder at $991 per month
including interest at 10% through June 2000, unsecured.... 35,002
Note payable to former shareholder at $3,033 per month
including interest at 8% through January 2006,
unsecured................................................. 234,457
Note payable to former shareholder at $375 per month
through January 2006...................................... 40,875
Unsecured notes payable to related party, due on demand... 7,772
Unsecured notes payable to related parties at $4,446 per
month including interest at 9% through August 2018........ 208,093
Unsecured notes payable to related party, due on demand
including interest at 7.5%................................ 53,372
</TABLE>

F-116
<PAGE> 279
PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996 -- CONTINUED
<TABLE>
<S> <C>
Notes payable to related parties, secured by certain notes
receivable and guaranteed by principal shareholder,
payable in monthly installments, including interest as
follows:
</TABLE>

<TABLE>
<CAPTION>
MONTHLY INTEREST
INSTALLMENTS RATES DUE DATES
------------ -------- ---------
<S> <C> <C> <C> <C>
$5,077 8.0% January 1, 2005........ $ 679,945
$ 470 8.0% January 1, 2005........ 58,820
$ 470 8.0% January 1, 2005........ 58,820
$ 470 8.0% January 1, 2005........ 58,821
$ 440 8.0% January 1, 2005........ 58,956
$ 381 8.0% January 1, 2005........ 50,989
Accrued interest due to related parties..................... 27,097
----------
9,642,459
Less current portion........................................ 1,302,585
----------
$8,339,874
==========
</TABLE>

Maturities in future years are: 1997--$1,302,585, 1998--$2,589,369;
1999--$4,454,088; 2000--$106,077; 2001--$1,018,430 and thereafter--$171,910.

The note payable to the bank limits the amount of new debt and operating
leases to not more than a total of $50,000 without lender's approval.

The bank issued a commitment letter to refinance $7,000,000 of the
$8,000,000 obligation in 1997, including a bridge loan of $2,000,000 and a term
loan of $5,000,000. The bridge loan has terms which include interest at prime
plus 1% and a maturity date of February 28, 1998. Requirements of the term loan
include interest at prime plus 1%, due August 31, 1999 and monthly payments of
approximately $77,000 (using an interest rate of 9.25%). The current portion and
scheduled maturities have been adjusted to reflect the intended refinance.

NOTE D--RELATED PARTY TRANSACTIONS

Interest expense paid to related parties amounted to $187,646 in 1996. The
Company leases land, office facilities, and equipment from certain shareholders
and officers of the Company. Rental expense paid to related parties amounted to
$99,588 in 1996.

NOTE E--LEASE COMMITMENTS

The Company leases radio transmitter sites, buildings, music and airtime
under noncancellable leases with terms in excess of one year. Future minimum
payments, by year and in the aggregate, under noncancellable operating leases
with initial or remaining terms of one year or more consisted of the following
at December 31, 1996:

<TABLE>
<S> <C>
1997.................................................... $206,120
1998.................................................... 201,980
1999.................................................... 133,202
2000.................................................... 31,300
2001.................................................... 11,150
Thereafter.............................................. 105,850
--------
Total minimum lease payments............................ $689,602
========
</TABLE>

F-117
<PAGE> 280
PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996 -- CONTINUED

Rental expense amounted to $245,589 in 1996.

NOTE F -- INCOME TAXES

The provision for income taxes results from continuing operations and
includes the following components:

<TABLE>
<S> <C>
Federal
Current tax provision............................. $ --
Deferred tax provision............................ 147,548
--------
147,548
State
Current tax provision............................. 12,544
Deferred tax provision............................ 22,388
--------
34,932
--------
Total income tax expense.................................... $182,480
========
</TABLE>

The components of the net deferred tax asset at December 31, 1996 are as
follows:

<TABLE>
<CAPTION>
FEDERAL STATE TOTAL
--------- -------- ---------
<S> <C> <C> <C>
Deferred tax liability from:
Taxable temporary differences.................... $(255,017) $(60,004) $(315,021)
Deferred tax asset from:
Deductible temporary differences................. 105,662 22,049 127,711
Operating loss carryforward...................... 205,289 -- 205,289
Tax credit carryforward.......................... 83,214 2,793 86,007
Valuation allowance.............................. (61,543) -- (61,543)
--------- -------- ---------
332,622 24,842 357,464
--------- -------- ---------
Deferred tax asset (liability)..................... $ 77,605 $(35,162) $ 42,443
========= ======== =========
</TABLE>

The following reconciles the federal tax provision with the expected
provision by applying statutory rates to income before income taxes:

<TABLE>
<S> <C>
Federal tax expense at statutory rate................... $171,261
Effect of state taxes................................... (13,701)
Nondeductible expenses.................................. 2,861
Partnership income...................................... (20,800)
Other................................................... 7,927
--------
Federal income tax expense.............................. $147,548
========
</TABLE>

For income tax purposes, operating losses and tax credit carryovers used
and available are as follows at December 31, 1996:

<TABLE>
<CAPTION>
USED AVAILABLE
-------- ---------
<S> <C> <C>
Net operating loss, federal................... $379,789 $710,617
Alternative minimum tax credit................ -- 21,671
General business credit....................... -- 61,543
</TABLE>

F-118
<PAGE> 281
PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996 -- CONTINUED

The federal net operating losses expire during 2004 through 2010. The
general business credits expire during 1998 through 2000. The alternative
minimum tax credits can be carried forward indefinitely.

NOTE G -- DEFINED CONTRIBUTION PLAN

The Company maintains a 401(k) plan covering all employees over the age of
twenty-one who have completed one year of service. The Company matches 10% of an
employee's contribution. Contributions to the plan were $7,022 in 1996.

NOTE H -- CONVERTIBLE PREFERRED STOCK

The preferred stockholders have the option to convert the preferred stock
into common stock prior to December 31, 2002 on the basis of five shares of
common stock for each share of preferred stock redeemed. The holders of
preferred stock do not have voting rights. Preferred stock is redeemable at par.
Subsequent to year end, the preferred stockholders converted all of their
preferred stock to common stock at the ratio of five shares of common stock for
each share of preferred stock.

F-119
<PAGE> 282
PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996 -- CONTINUED

NOTE I -- CASH FLOW INFORMATION

Supplemental cash flow information for the years ended December 31, 1996 is
as follows:

<TABLE>
<S> <C>
Interest paid......................................... $ 347,933
Taxes paid (net of refunds)........................... $ (7,718)
Noncash financing and investing activities:
Purchase of shareholder's common stock and payment
of deferred compensation:
Common stock redeemed............................ $ 115,625
New debt incurred................................ (295,000)
Deferred compensation paid....................... 179,375
-----------
$ --
===========
Sale of assets:
Proceeds from sale of property and equipment..... $ 689,000
Increase in notes receivable..................... (689,000)
-----------
$ --
===========
Payment of shareholder receivable with reduction in
shareholder note payable:
Notes payable reduced............................ $ 1,000,000
Note payable created............................. (7,772)
Shareholder receivable paid...................... (992,228)
-----------
$ --
===========
Refinancing company and shareholder debt and
acquisition of radio stations:
Proceeds from new debt........................... $ 8,000,000
Payments on existing debt........................ (2,557,188)
Broadcast licenses acquired...................... (4,100,000)
Property and equipment acquired.................. (800,000)
Noncompete agreement............................. (100,000)
Debt repayment on behalf of shareholder.......... (415,972)
Loan fees........................................ (80,000)
Legal fees....................................... (10,200)
-----------
Net cash paid for acquisition $ (63,360)
===========
</TABLE>

NOTE J--SUBSEQUENT EVENTS

The Company has entered into an agreement to redirect certain of the
Company's broadcast signals in exchange for a payment of $2,000,000. The
agreement is subject to Federal Communications Commission (FCC) approval and is
secured by a letter of credit. Approval is expected in 1997 and the payment is
expected to be received subsequent to approval.

Subsequent to December 31, 1996, the shareholders of PNWB and the members
of Wilson have signed letters of intent to sell the capital stock of PNWB, the
operating assets of Wilson and a building owned by a shareholder to Citadel
Broadcasting Company (Citadel). The transactions are subject to approval of the
FCC. Under the letters of intent, the Company will enter into a LMA with Citadel
which will allow Citadel use of the property and equipment of the radio

F-120
<PAGE> 283
PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996 -- CONTINUED

stations in exchange for a fee. The LMA will continue until closing of the sales
of the stock of PNWB and the assets of Wilson. The sale of the stock of PNWB
will not close prior to January 1, 1998 and the sale of the assets of Wilson
will not close prior to April 18, 1998. The sale price of $28,500,000 for the
stock, assets and building is payable in cash, or, if Citadel's parent
consummates an initial public offering prior to closing, such price is payable
in cash totaling $25,650,000 and stock of $2,850,000. The agreement to purchase
the stock of PNWB requires, among other things, that certain minimum levels of
net asset value be met on the date of closing.

The Company made payments of notes payable amounting to approximately
$1,800,000 subsequent to year end in advance of the payment due dates.
Additionally, the Company received approximately $2,600,000 in full payment of
certain notes receivables subsequent to December 31, 1996.

Subsequent to year end, the preferred stockholders converted all of their
preferred stock to common stock at the ratio of five shares of common stock for
each share of preferred stock.

F-121
<PAGE> 284

PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

UNAUDITED COMBINED BALANCE SHEET
OCTOBER 31, 1997

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash...................................................... $ 457,658
Trade accounts receivable, net of allowance for doubtful
accounts of $25,000..................................... 1,033,958
Other accounts receivable................................. 47,171
Prepaid expenses.......................................... 92,255
Prepaid income tax........................................ 5,880
Accrued interest receivable............................... 2,119
Current portion of notes receivable....................... 132,952
-----------
Total current assets............................... 1,771,993
Other Assets:
AM and FM broadcast licenses.............................. 4,382,008
Notes receivable, less current portion.................... 525,244
Noncompete agreements..................................... 266,170
Equipment deposits and other assets....................... 43,509
Deferred taxes............................................ 5,452
-----------
5,222,383
Property and equipment, at cost:
Land and improvements..................................... 324,647
Leasehold improvements.................................... 63,063
Towers and antennas....................................... 402,710
Transmitters and transmitter buildings.................... 513,002
Studio and technical equipment............................ 951,467
Automobiles............................................... 44,930
Furniture and office equipment............................ 382,019
-----------
2,681,838
Accumulated depreciation.................................. (1,109,093)
-----------
1,572,745
-----------
$ 8,567,121
===========
LIABILITIES AND OWNERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 203,805
Accrued expenses.......................................... 181,856
Current portion of notes payable to related parties....... 71,720
Current portion of long-term debt......................... 6,533,928
-----------
Total current liabilities.......................... 6,991,309
Long-term debt:
Notes payable to related parties, less current portion.... 832,523
Notes payable, less current portion....................... 284,301
-----------
1,116,824
Deferred revenue............................................ 123,305
Owners' equity:
Common stock, voting, no par value, authorized 20,000
shares, issued and outstanding 10,750.6 shares.......... 1,872,477
Shareholder receivable.................................... (531,500)
Accumulated deficit....................................... (852,164)
Members' deficit.......................................... (153,130)
-----------
335,683
-----------
$ 8,567,121
===========
</TABLE>

See accompanying notes.
F-122
<PAGE> 285

PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

UNAUDITED COMBINED STATEMENT OF OPERATIONS
TEN MONTHS ENDED OCTOBER 31, 1997

<TABLE>
<S> <C>
Revenues:
Revenues.................................................. $5,717,702
Less agency and representative commissions................ 796,360
----------
4,921,342
Expenses:
Transmission.............................................. 233,678
Programming and production................................ 1,640,619
Sales..................................................... 874,358
General and administrative................................ 1,622,242
Advertising............................................... 137,386
----------
4,508,283
----------
Income from operations............................ 413,059
Nonoperating income (expense):
Loss on sale of assets.................................... (65,639)
Noncompete revenue........................................ 112,090
Interest income........................................... 121,846
Interest expense.......................................... (694,674)
----------
(526,377)
----------
Loss before income taxes.......................... (113,318)
Income tax expense.......................................... 32,290
----------
Net loss.......................................... $ (145,608)
==========
</TABLE>

See accompanying notes.
F-123
<PAGE> 286

PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

UNAUDITED COMBINED STATEMENT OF CHANGES IN OWNERS' EQUITY
TEN MONTHS ENDED OCTOBER 31, 1997

<TABLE>
<CAPTION>
PREFERRED COMMON SHAREHOLDER ACCUMULATED MEMBERS'
STOCK STOCK RECEIVABLE DEFICIT DEFICIT TOTAL
----------- ---------- ------------ ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1,
1997............... $ 1,396,800 $ 475,677 $ -- $(920,862) $ 61,176 $1,012,791
Preferred stock
conversion....... (1,396,800) 1,396,800 -- -- -- --
Increase in
shareholder
receivable....... -- -- (531,500) -- -- (531,500)
Net income
(loss)........... -- -- -- 68,698 (214,306) (145,608)
----------- ---------- --------- --------- --------- ----------
Balance at October
31, 1997........... $ -- $1,872,477 $(531,500) $(852,164) $(153,130) $ 335,683
=========== ========== ========= ========= ========= ==========
</TABLE>

See accompanying notes.
F-124
<PAGE> 287

PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

UNAUDITED COMBINED STATEMENT OF CASH FLOWS
TEN MONTHS ENDED OCTOBER 31, 1997

<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss.................................................. $ (145,608)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Amortization........................................... 115,908
Depreciation........................................... 116,517
Noncompete revenue..................................... (112,090)
Noncompete expense..................................... 88,271
Provision for bad debts................................ 20,284
Loss on sale of assets................................. 65,639
Changes in operating assets and liabilities:
Trade accounts receivable............................ 25,593
Other accounts receivable............................ 10,521
Prepaid expenses..................................... 97,140
Prepaid income tax................................... (5,880)
Accrued interest receivable.......................... 16,050
Equipment deposits and other assets.................. (4,259)
Deferred taxes....................................... 36,991
Accounts payable..................................... (64,596)
Accrued expenses..................................... (77,623)
Accrued taxes payable................................ (12,520)
-----------
Net cash provided by operating activities......... 170,338
Cash flows from investing activities:
Loans made to shareholders................................ (531,500)
Advances on notes receivable.............................. (59,836)
Payments on notes receivable.............................. 2,902,298
Proceeds from sale of assets.............................. 61,100
Additions to property and equipment....................... (385,136)
-----------
Net cash provided by investing activities......... 1,986,926
Cash flows from financing activities:
Payments on notes payable................................. (1,561,545)
Payments on notes payable to related parties.............. (358,442)
-----------
Net cash used by financing activities............. (1,919,987)
-----------
Net increase in cash.............................. 237,277
Cash at beginning of period....................... 220,381
-----------
Cash at end of period............................. $ 457,658
===========
Supplemental disclosure of cash flow information:
Interest paid............................................. $ 703,382
Taxes paid................................................ $ 13,699
</TABLE>

See accompanying notes.
F-125
<PAGE> 288

PACIFIC NORTHWEST BROADCASTING CORPORATION AND AFFILIATES

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS
OCTOBER 31, 1997

NOTE A--UNAUDITED INTERIM FINANCIAL STATEMENTS

The combined balance sheet as of October 31, 1997 and the combined
statements of operations, changes in owners' equity, and cash flows for the ten
month period ended October 31, 1997 are unaudited. In the opinion of management,
the accompanying unaudited financial statements contain all adjustments
(consisting solely of normal recurring adjustments) necessary to present fairly
the financial position of Pacific Northwest Broadcasting Corporation and
Affiliates, (the Company) and the results of operations, changes in owners'
equity, and cash flows. These interim unaudited combined financial statements
should be read in conjunction with the audited combined financial statements.
The combined results of operations for the ten months ended October 31, 1997 are
not necessarily indicative of results to be expected for the full year.

NOTE B--AGREEMENT TO REDIRECT SIGNAL

NOTE C--SALES AGREEMENTS

On September 29, 1997, the shareholders of Pacific Northwest Broadcasting
Corporation (PNWB) and the members of Wilson Group, LLC (Wilson) signed various
agreements to sell the capital stock of PNWB, the operating assets of Wilson and
a building of the controlling owner to Citadel Broadcasting Company (Citadel).
In conjunction with the agreements, the Company entered into a Local Marketing
Agreement (LMA) with Citadel which allowed Citadel use of the property and
equipment of the radio stations in exchange for a fee. The LMA continued until
the closing of the sale of the assets of Wilson. The sale of the stock of PNWB
closed February 12, 1998 and the sale of the assets of Wilson closed on April
21, 1998. The sales price of $28,500,000 for the stock, assets and building was
paid in cash.

NOTE D--SUBSEQUENT EVENT

On February 12, 1998, PNWB entered into an assignment and distribution
agreement with Wilson Properties, L.P., the sole shareholder. This agreement
transferred certain obligations and assets to the shareholder and resulted in a
net dividend of $245,301. The agreement also assigned the right to collect the
proceeds from the agreement to redirect broadcast signals described in Note B.

The dividend is summarized as follows:

<TABLE>
<S> <C>
Cash............................................... $ 655,089
Accounts receivable................................ 1,534,460
Notes receivable................................... 5,636,732
Real property...................................... 312,872
Other assets....................................... 30,902
Debt............................................... (7,681,981)
Accounts payable and accrued expenses.............. (242,773)
-----------
Dividend........................................... $ 245,301
===========
</TABLE>

F-126
<PAGE> 289

INDEPENDENT AUDITORS' REPORT

The Partners
Wicks Radio Group
(a division of Wicks Broadcast Group Limited Partnership)

We have audited the accompanying balance sheet of Wicks Radio Group (a
division of Wicks Broadcast Group Limited Partnership) as of December 31, 1997,
and the related statements of operations and changes in division equity, and
cash flows for the year then ended. These financial statements are the
responsibility of Wicks Radio Group's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Wicks Radio Group (a
division of Wicks Broadcast Group Limited Partnership) as of December 31, 1997
and the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

/s/ KPMG PEAT MARWICK LLP

McLean, Virginia
December 15, 1998

F-127
<PAGE> 290

WICKS RADIO GROUP
(A DIVISION OF WICKS BROADCAST GROUP LIMITED PARTNERSHIP)

BALANCE SHEETS

<TABLE>
<CAPTION>
(UNAUDITED)
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
<S> <C> <C>
ASSETS
Cash and cash equivalents................................ $ 104,940 $ 326,168
Accounts receivable, net of allowance for doubtful
accounts of $286,811 at December 31, 1997 and $311,650
at September 30, 1998.................................. 2,123,972 3,126,098
Prepaid expenses and other assets........................ 58,099 203,819
----------- -----------
Total current assets................................ 2,287,011 3,656,085
Property and equipment, net.............................. 4,617,141 6,277,822
Intangible assets, net................................... 25,047,120 38,242,931
----------- -----------
Total assets........................................ $31,951,272 $48,176,838
=========== ===========

LIABILITIES AND DIVISION EQUITY
Current liabilities -- accounts payable and accrued
expenses............................................... $ 489,238 $ 513,650
Deferred income taxes.................................... 560,000 530,000
----------- -----------
Total liabilities................................... 1,049,238 1,043,650
Division equity.......................................... 30,902,034 47,133,188
----------- -----------
Total liabilities and division equity............... $31,951,272 $48,176,838
=========== ===========
</TABLE>

See accompanying notes to financial statements.
F-128
<PAGE> 291

WICKS RADIO GROUP
(A DIVISION OF WICKS BROADCAST GROUP LIMITED PARTNERSHIP)

STATEMENTS OF OPERATIONS AND CHANGES IN DIVISION EQUITY

<TABLE>
<CAPTION>
(UNAUDITED)
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -----------------
<S> <C> <C>
Revenues:
Broadcast revenues............................... $12,751,347 $13,837,308
Other revenue.................................... 346,790 500,346
----------- -----------
Gross revenues..................................... 13,098,137 14,337,654
Less -- agency commissions....................... (1,320,388) (1,387,370)
----------- -----------
Net revenue........................................ 11,777,749 12,950,284
Operating costs:
Station operating expenses....................... 8,269,884 8,668,765
Depreciation and amortization.................... 2,301,180 3,052,064
Corporate overhead............................... 1,008,602 587,049
----------- -----------
11,579,666 12,307,878
Net income before income taxes..................... 198,083 642,406
Income taxes (benefit)............................. (40,000) (30,000)
----------- -----------
Net income......................................... 238,083 672,406
Division equity, beginning of period............... 23,281,430 30,902,034
Net corporate transfers............................ 7,382,521 15,558,748
----------- -----------
Division equity, end of period..................... $30,902,034 $47,133,188
=========== ===========
</TABLE>

See accompanying notes to financial statements.
F-129
<PAGE> 292

WICKS RADIO GROUP
(A DIVISION OF WICKS BROADCAST GROUP LIMITED PARTNERSHIP)

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
(UNAUDITED)
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -----------------
<S> <C> <C>
Cash flows from operating activities:
Net income.......................................... $ 238,083 $ 672,406
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.................... 2,301,180 3,052,064
Deferred tax benefit............................. (40,000) (30,000)
(Increase) decrease in receivables............... 65,154 (1,002,126)
Increase in prepaid expenses and other current
assets......................................... (50,794) (145,720)
Increase (decrease) in accounts payable and
accrued expenses............................... (1,515,667) 24,412
----------- ------------
Net cash provided by operating activities...... 997,956 2,571,036
----------- ------------
Cash flows used in investing activities:
Purchase of property and equipment.................. (369,460) (145,157)
Acquisition of broadcast properties................. (8,672,770) (17,763,399)
----------- ------------
Cash flows used in investing activities............... (9,042,230) (17,908,556)
----------- ------------
Cash flows provided by financing activities -- net
corporate transfers................................. 7,382,521 15,558,748
----------- ------------
Net increase (decrease) in cash and cash
equivalents......................................... (661,753) 221,228
Cash and cash equivalents, beginning of period........ 766,693 104,940
----------- ------------
Cash and cash equivalents, end of period.............. $ 104,940 $ 326,168
=========== ============
</TABLE>

See accompanying notes to financial statements.
F-130
<PAGE> 293

WICKS RADIO GROUP
(A DIVISION OF WICKS BROADCAST GROUP LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

(1) BUSINESS DESCRIPTION

The Wicks Radio Group (the "Broadcast Group") is a division of Wicks
Broadcast Group Limited Partnership (the "Partnership"). The Broadcast Group
consists of the thirteen radio stations (8 FMs and 5 AMs) serving the
Charleston, SC and Binghamton, NY markets as of December 31, 1997. In January
1998, the Broadcast Group acquired an additional three stations (2 FMs and 1
AM). See note 3.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

For the purposes of the statement of cash flows, cash equivalents consist
of highly liquid investments with original maturities of three months or less.
The fair market value of such investments approximates cost.

Property and Equipment

Property and equipment are stated at cost. Depreciation expense is computed
using the straight-line method over the estimated useful lives of the assets,
which range from three to twenty years.

Intangible Assets and Recovery of Long-Lived Assets

Intangible assets consist principally of network affiliation agreements,
broadcasting licenses, covenants not to compete and the excess of costs over the
fair value of net assets acquired. Amortization expense is computed on a
straight-line basis over the estimated lives of the assets which range from 2-15
years.

The Partnership's policy is to review its long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. The Partnership recognizes an impairment loss when the
sum of the expected future undiscounted cash flows is less than the carrying
amount of the asset. The measurement of the impairment losses to be recognized
is based upon the difference between the fair value and the carrying amount of
the assets.

Income Taxes

The Broadcast Group is generally not an entity subject to income taxes. The
Broadcast Group's income or loss is passed through to the Partnership and the
related tax attributes are deemed to be distributed to, and to be reportable by,
the partners of the Partnership on their respective income tax returns.

However, the Broadcast Group contains the Partnership's subsidiary,
Regional Group, Inc. Regional Group, Inc. and its subsidiaries are Subchapter C
corporations, and are, therefore, responsible for the income taxes attributable
to their profit and losses.

Income taxes for Regional Group, Inc. and its subsidiaries are accounted
for under the asset and liability method. Deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating losses and tax credit
carryforwards. Deferred tax assets and liabilities are measured using the
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in

F-131
<PAGE> 294
WICKS RADIO GROUP
(A DIVISION OF WICKS BROADCAST GROUP LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS -- CONTINUED

tax rates is recognized into income in the period that includes the enactment
date. The income tax benefit is a result of the amortization of the deferred tax
liability.

Revenues

Broadcasting revenues are derived principally from the sale of program time
and spot announcements to local, regional, and national advertisers. Advertising
revenue is recognized in the period during which the program time and spot
announcements are broadcast.

Barter Transactions

Barter transactions are recorded at the estimated fair values of the
products and services received. Barter revenues are recognized when commercials
are broadcast. The assets or services received in exchange for broadcast time
are recorded when received or used.

Corporate Overhead

A number of overhead services are maintained centrally by the Partnership
and are allocated to its business units based on the benefits provided. These
services include most of the costs associated with the human resources function
and certain general and administrative costs of the corporate function such as
accounting and finance, treasury and legal.

In addition, the Partnership provides for the working capital needs of the
Broadcast Group. There is no borrowing arrangement between the Partnership and
the Broadcast Group. Accordingly, no interest expense is recorded in the
accompanying financial statements. However, all of the assets of the Broadcast
Group have been pledged as collateral on the Partnership's credit facility.

Use of Estimates

Concentration of Credit Risk

A significant portion of the Broadcast's Group accounts receivable are due
from advertising agencies.

Unaudited Interim Financial Information

The unaudited balance sheet, statements of operations and changes in
division equity, and cash flows as of September 30, 1998 and for the nine months
then ended have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions of
Regulation S-X. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the interim period are not necessarily
indicative of the results that may be expected for any future period including
the year ending December 31, 1998.

(3) ACQUISITION OF BROADCAST RADIO STATIONS

In December 1997, the Partnership acquired certain broadcasting assets of
WBUB-FM (St. George, South Carolina) and WXTC-AM (Charleston, South Carolina)
and upgraded the

F-132
<PAGE> 295
WICKS RADIO GROUP
(A DIVISION OF WICKS BROADCAST GROUP LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS -- CONTINUED

frequency of one of its existing FM stations in the Charleston, South Carolina,
market through a swap of broadcast license rights.

In January 1998, the Partnership acquired certain broadcasting assets of
WMDH-FM and WMDH-AM (Muncie, Indiana) and WWKI-FM (Kokomo, Indiana).

Total consideration paid for these acquisitions including costs of
acquisitions was approximately $8,673,000 in 1997 and $17,764,000 (unaudited) in
1998. These acquisitions have been accounted for under the purchase method of
accounting and, accordingly, the assets acquired and liabilities assumed have
been recorded at their estimated fair value as of the acquisition date, as
determined by an independent appraiser. The allocation of the purchase price is
summarized as follows:

<TABLE>
<CAPTION>
(UNAUDITED)
1997 1998
---------- -----------
<S> <C> <C>
Land................................................... $ 68,000 $ 107,000
Property and equipment................................. 2,260,000 2,194,000
Intangible assets...................................... 6,345,000 15,463,000
---------- -----------
Total consideration paid............................... $8,673,000 $17,764,000
========== ===========
</TABLE>

(4) PROPERTY AND EQUIPMENT

A summary of property and equipment is as follows:

<TABLE>
<CAPTION>
(UNAUDITED)
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
<S> <C> <C>
Land...................................................... $ 168,615 $ 275,318
Building and improvements................................. 267,370 989,413
Office equipment, furniture, and fixtures................. 430,259 581,724
Broadcast and production equipment........................ 4,980,885 6,432,008
Vehicles.................................................. 81,137 94,660
----------- -----------
5,928,266 8,373,123
Less accumulated depreciation............................. (1,311,125) (2,095,301)
----------- -----------
$ 4,617,141 $ 6,277,822
=========== ===========
</TABLE>

(5) INTANGIBLE ASSETS AND AMORTIZATION

Intangible assets are comprised of the following:

<TABLE>
<CAPTION>
(UNAUDITED)
USEFUL LIFE DECEMBER 31, SEPTEMBER 30,
IN YEARS 1997 1998
----------- ------------ -------------
<S> <C> <C> <C>
FCC licenses............................... 15 $14,548,860 $23,996,860
Network affiliations....................... 15 1,372,056 2,869,114
Goodwill................................... 15 9,721,115 14,239,756
Non-compete agreements..................... 2-5 725,000 725,000
Other intangibles.......................... 2-15 2,113,348 2,113,348
----------- -----------
28,480,379 43,944,078
Less accumulated amortization.............. (3,433,259) (5,701,147)
----------- -----------
$25,047,120 $38,242,931
=========== ===========
</TABLE>

F-133
<PAGE> 296
WICKS RADIO GROUP
(A DIVISION OF WICKS BROADCAST GROUP LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS -- CONTINUED

(6) DEFERRED INCOME TAXES

The Partnership had established a deferred tax liability arising from the
acquisition of Regional Group, Inc. of $600,000. This liability was attributable
to the difference between the book basis of Regional Group, Inc. and the
carryover basis of the former shareholders at the acquisition date. As the
liability was principally attributable to the book/tax difference in long-term
tangible and intangible assets, the deferred tax liability was classified as a
long-term liability. The Broadcast Group recognized an income tax benefit of
$40,000 in 1997 and $30,000 for the nine months ended September 30, 1998 as a
result of amortization of the deferred tax liability.

(7) LEASES

The Broadcast Group leases certain property and equipment under
noncancelable operating lease agreements. Rental expense was approximately
$261,000 for the year ended December 31, 1997.

Future minimum lease payments under noncancelable operating leases are
approximately:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31:
- ------------------------
<S> <C>
1998........................................... $ 308,000
1999........................................... 239,000
2000........................................... 188,000
2001........................................... 153,000
2002........................................... 153,000
Thereafter..................................... 675,000
----------
$1,716,000
==========
</TABLE>

(8) SUBSEQUENT EVENT

In November 1998, the Partnership entered into an agreement with Citadel
Broadcasting Company ("Citadel") to sell the Wicks Radio Group to Citadel for
approximately $77 million, subject to approval from the Federal Communications
Commission.

F-134
<PAGE> 297

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YOU SHOULD RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING
AN OFFER TO SELL THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS
NOT PERMITTED.

YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS
ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT COVER OF THIS
PROSPECTUS.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 1
Risk Factors.......................... 10
Use of Proceeds....................... 17
Capitalization........................ 18
Information About Station and Market
Data................................ 19
Pro Forma Financial Information....... 20
Selected Historical Financial Data.... 36
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 38
Business.............................. 47
The Pending Transactions.............. 76
Management............................ 81
Certain Transactions.................. 90
Principal Stockholders................ 95
Description of Indebtedness........... 98
The Exchange Offer.................... 107
Description of the Notes.............. 118
Certain U.S. Federal Income Tax
Consequences........................ 153
Plan of Distribution.................. 158
Legal Matters......................... 158
Independent Auditors.................. 158
Available Information................. 159
</TABLE>

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$115,000,000

Citadel logo
CITADEL BROADCASTING COMPANY
---------------------------------------------------

EXCHANGE OFFER

FOR
9 1/4% SENIOR
SUBORDINATED NOTES
DUE 2008
---------------------------
PROSPECTUS
---------------------------
FEBRUARY 16, 1999

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