CUMULUS MEDIA INC, 10-K, 1999-04-15

CUMULUS MEDIA INC
10-K, 1999-04-15
RADIO BROADCASTING STATIONS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 00-24525

CUMULUS MEDIA INC.
(Exact Name of Registrant as Specified in Its Charter)

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ILLINOIS 36-4159663
(State of Incorporation) (I.R.S. Employer Identification No.)
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111 E. KILBOURN AVENUE, SUITE 2700
MILWAUKEE, WI 53202
TELEPHONE: (414) 615-2800
(Address, including zip code, and telephone number, including area code, of
registrant's principal offices)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

$160.0 MILLION OF 10 3/8% SENIOR SUBORDINATED NOTES DUE 2008
$125.0 MILLION OF 13 3/4% SERIES A CUMULATIVE EXCHANGEABLE
REDEEMABLE PREFERRED STOCK DUE 2009
8,700,504 SHARES OF CLASS A COMMON STOCK; PAR VALUE $.01 PER SHARE
8,660,416 SHARES OF CLASS B COMMON STOCK; PAR VALUE $ .01 PER SHARE
2,376,277 SHARES OF CLASS C COMMON STOCK; PAR VALUE $ .01 PER SHARE

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X No ____

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The aggregate market value of the registrant's outstanding common stock
held by non-affiliates of the registrant as of February 28, 1999 was
approximately $198.5 million. As of February 28, 1998, the registrant had
outstanding 19,737,197 shares of common stock consisting of (i) 8,700,504 shares
of Class A Common Stock; (ii) 8,660,416 shares of Class B Common Stock; and
(iii) 2,376,277 shares of Class C Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of our Definitive Proxy Statement for the 1999 Annual Meeting of
Stockholders, expected to be filed within 120 days of our fiscal year end, are
incorporated by reference into Part III.
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CUMULUS MEDIA INC.

ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

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ITEM PAGE
NUMBER NUMBER
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<S> <C> <C>
Index....................................................... 2

PART I
1. Business.................................................... 3
2. Properties.................................................. 25
3. Legal Proceedings........................................... 26
4. Submission of Matters to a Vote of Security Holders......... 26

PART II
5. Market for the Company's Common Equity and Related
Stockholder Matters....................................... 26
6. Selected Consolidated Financial Data........................ 27
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 28
7A. Quantitative and Qualitative Disclosure about Market Risk... 35
8. Financial Statements and Supplementary Data................. 36
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................. 36

PART III
10. Directors and Executive Officers of the Company............. 36
11. Executive Compensation...................................... 39
12. Security Ownership of Certain Beneficial Owners............. 39
13. Certain Relationships and Related Transactions.............. 40

PART IV
14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K....................................................... 41

Signatures.................................................. 46
</TABLE>

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PART 1

ITEM 1. BUSINESS

CERTAIN DEFINITIONS

We use the term "local marketing agreement" ("LMA") in various places in
this report. A typical LMA is an agreement under which a Federal Communications
Commission ("FCC") licensee of a radio station makes available, for a fee, air
time on its station to a party. Such party provides programming to be broadcast
during such airtime and collects revenues from advertising it sells for
broadcast during such programming.

A station's or station group's "power ratio" is defined as such station's
or station group's revenue market share divided by its audience market share.

"MSA" is defined as Metro Survey Area, as listed in the Arbitron Radio
Metro and Television Market Population Estimates 1996-1997. For example, "MSA
100-268" would mean the 100th largest market through the 268th largest market,
as listed in the Arbitron Radio Metro and Television Market Population Estimate.

Unless otherwise indicated:

- we obtained market ranking by radio advertising revenue, radio market
advertising revenue and radio market advertising data from BIA's
MasterAccess ("BIA") compiled by BIA Research, Inc.;

- we obtained total industry listener and revenue levels from the Radio
Advertising Bureau ("RAB");

- we derived all audience share data and audience rankings, including
ranking by population, except where otherwise stated to the contrary,
from surveys of people ages 12 and over ("Adults 12+"), listening Monday
through Sunday, 6 a.m. to 12 midnight, and based on the Spring 1998
Arbitron Market Report pertaining to each market, as reported by BIA; and

- we obtained revenue share data in each market presented from BIA as
adjusted for market information available to and known by the Company.

The terms "Broadcast Cash Flow" and "EBITDA before non-cash stock
compensation expense" are used in various places in this document.

Broadcast Cash Flow consists of:

- operating income (loss) before

-- depreciation,

-- amortization,

-- non-cash stock compensation expense and

-- corporate general and administrative expense.

EBITDA, before non-cash stock compensation expense, consists of:

- operating income (loss) before

-- depreciation,

-- amortization and

-- non-cash stock compensation expense.

evaluate a radio company's operating performance. However, Broadcast Cash Flow
and EBITDA, before non-cash stock compensation expense, 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 GAAP, or as measures of liquidity or profitability.

COMPANY OVERVIEW

Cumulus Media Inc. ("Cumulus" or the "Company") is a radio broadcasting
company focused on acquiring, operating and developing radio stations in
demographically attractive and fast growing mid-size radio markets in the U.S.
(primarily MSA 100-268), and as of March 19, 1999 owns and operates 180 stations
in 39 U.S. markets. We also provide sales and marketing services under LMAs
(pending FCC approval of acquisition) to 33 stations in 13 U.S. markets. Upon
consummation of certain pending acquisitions, we will be one of the three
largest radio broadcasting companies based on number of stations, and among the
twelve largest in the U.S. based on net revenues. Upon consummation of certain
pending acquisitions, we will own and operate a total of 221 radio stations (153
FM and 68 AM) in 42 U.S. markets. In 38 markets, we will rank first or second in
terms of revenue share and/or audience share.

Relative to the 100 largest markets in the U.S., we believe that the
mid-size markets (MSA 100-268) represent attractive operating environments and
generally are characterized by:

- faster real growth in the population and the economy;

- a greater reliance on radio advertising as evidenced by the greater
percentage of total media revenues captured by radio than the national
average;

- rising advertising revenues as the larger national and regional retailers
expand into these markets; and

- lower historical susceptibility to economic downturns.

We believe that the attractive operating characteristics of mid-size
markets together with the relaxation of FCC ownership limits, create significant
opportunities to form groups of radio stations within markets and regions that
will enable us to achieve revenue growth, product improvement and cost
efficiencies. As a result, we believe that we can grow revenues at rates equal
to or better than larger market growth rates and generate Broadcast Cash Flow
margins that are comparable to the higher margins that in the past have
generally been achieved only in the top 100 markets. We believe that mid-size
radio markets provide an excellent opportunity to acquire attractive properties
at favorable purchase prices due to the size and fragmented nature of ownership
in these markets and to the greater attention historically given to the larger
markets by radio station acquirers. According to BIA, there are approximately
1,656 FM and 1,035 AM stations in the 169 U.S. radio markets ranked MSA 100-268.
These 2,691 stations are owned by approximately 990 different operators. In
addition, there are nearly 4,700 stations in unranked markets owned by
approximately 2,500 operators.

BUSINESS STRATEGY

Our operating strategy has the following principal components:

- ASSEMBLE LEADING STATION GROUPS. In each market, we have acquired
stations with diverse programming formats and FCC licenses that have full
signal coverage in the market area. In each market, we seek to assemble a
group or "cluster" of stations that immediately following acquisition
will rank first or second with the near term potential to rank first in
the market in terms of revenue and/or audience share.

- DEVELOP EACH STATION AS A UNIQUE ENTERPRISE. While each station in a
market shares a common infrastructure of support personnel and systems
and in many cases studio and office space, each station is programmed and
merchandised as a separate entity with its own brand identity,
programming and inventory of radio time slots for advertisers. Each
station targets a unique demographically defined audience of listeners.
Each station has its own program director, sales manager and sales
organization.

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- POSITION STATION CLUSTER TO COMPETE WITH PRINT AND TELEVISION. While each
station is generally sold independently, we also have the flexibility to
present the entire cluster. This affords major advertisers the
opportunity to target demographic segments comparable to newspapers and
television with greater cost effectiveness. By offering this new
flexibility, we are able to compete for a share of the relatively larger
advertising budgets spent on newspaper and television.

- LIVE ON-AIR TALENT AND RESEARCH TO SUPPORT PROGRAMMING. We use audience
research and music testing to refine each station's programming content
to match the preferences of the stations target demographic audience. We
also seek to enrich the listener experience by increasing both the
quality and quantity of local programming with live on-air personalities.
In addition, we have secured the services of the Associated Press to
provide each of our stations with the news resources to keep our
listeners informed as well as entertained. We believe this strategy is
the essence of successful radio and maximizes the number of listeners for
each station.

- EMPLOY INTERNET-BASED MANAGEMENT INFORMATION SYSTEMS. We have implemented
a proprietary set of computer applications using Internet software
standards to monitor daily sales performance, inventory and pricing
levels by station and by market. This system allows our managers to track
performance in near real-time comparing actual to historical and planned
levels as an early warning system for markets which stray off plan and to
insure optimal inventory and pricing levels. We also employ this same
platform as the basis for a company-wide information system that allows
our managers in each market to share their best ideas about programming,
sales and promotions.

ACQUISITION HISTORY

We completed the following acquisitions of radio stations for cash during
the year ended December 31, 1998. The respective purchase price listed below for
each transaction includes certain acquisition related costs paid in 1998 and
1997, and are rounded to the nearest thousand:

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MARKETS AND STATIONS ACQUISITION DATE PURCHASE PRICE
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COLUMBUS, GEORGIA
M & M Partners
(WVRK-FM, WGSY-FM, WPNX-AM and WMLF-AM)................... January 6, 1998 $ 13,241
Minority Radio Associates
(WAGH-FM)................................................. March 17, 1998 $ 2,054
Smiths
(WBFA-FM)................................................. November 1, 1998 $ 1,800
TALLAHASSEE, FLORIDA
Tally Radio, L.C
(WWLD-FM)................................................. January 16, 1998 $ 1,200
HVS Partners
(WBZE-FM, WHBT-AM and WHBX-FM)............................ January 16, 1998 $ 15,650
TOLEDO, OHIO
Venice Broadcasting Corp.
(WXKR-FM)................................................. January 27, 1998 $ 5,009
SALISBURY, MARYLAND
Connor Broadcasting Corporation
(WSBY-FM and WJDY-AM)..................................... February 11, 1998 $ 1,361
WWFG-FM and WOSC-FM
(WOSC-FM and WWFG-FM)..................................... July 7, 1998 $ 7,564
ANN ARBOR, MICHIGAN
Arbor Radio LP
(WIQB-FM, WQKL-FM, WTKA-AM and WDEO-AM)................... March 2, 1998 $ 15,356
</TABLE>

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<CAPTION>
MARKETS AND STATIONS ACQUISITION DATE PURCHASE PRICE
-------------------- ---------------- --------------
<S> <C> <C>
MYRTLE BEACH, SOUTH CAROLINA
Carolina Broadcasting, Inc.
(WJXY-AM and WJXY-FM)..................................... March 16, 1998 $ 2,405
Seacoast Radio Company, LLC
WDAI-FM
Sunny Broadcasters, Inc.
(WSNY-FM)................................................. March 25, 1998 $ 8,229
WSEA Inc.
(WSEA-FM)................................................. July 31, 1998 $ 1,346
FLORENCE, SOUTH CAROLINA
Forjay Broadcasting Corporation
(WYNN-FM and WYNN-AM)..................................... March 23, 1998 $ 4,601
GHB Broadcasting
(WHSC-AM and WHSC-FM)..................................... May 1, 1998 $ 705
AMARILLO, TEXAS
Heritage Communications
(KZRK-AM and KZRK-FM)..................................... April 1, 1998 $ 1,032
West Jewel Management
(KARX-FM)................................................. April 8, 1998 $ 928
Wiskes-Abaris Communications
(KQIZ-FM)................................................. April 30, 1998 $ 3,207
Westwind Broadcasting
(KPUR-FM and KPUR-AM)..................................... June 9, 1998 $ 829
AUGUSTA, GEORGIA
Savannah Valley Broadcasting Radio Properties
(WBBQ-AM and WBBQ-FM)..................................... April 1, 1998 $ 10,206
WLOV P&T Broadcasting
(WLOV-FM and WLOV-AM)..................................... August 14, 1998 $ 533
ABILENE, TEXAS
IQ Radio, Inc.
(KHXS-FM)................................................. April 7, 1998 $ 385
Big Country Broadcasting
(KBCY-FM and KCDD-FM)..................................... April 15, 1998 $ 2,048
Esprit Communications Co.
(KFQX-FM)................................................. August 14, 1998 $ 1,695
BEAUMONT, TEXAS
Beaumont Skywave, Inc.
(KTCX-FM)................................................. May 15, 1998 $ 3,804
Ninety-Four Point One, Inc.
(KAYD-FM, KAYD-AM, KQXY-FM and KQHN-AM)................... May 15, 1998 $ 11,646
DUBUQUE, IOWA
KIKR, Inc.
(KIKR-FM)................................................. June 3, 1998 $ 1,350
Communications Properties, Inc.
(KLYV-FM, KXGE-FM, WJOD-FM and WDBQ-AM)................... September 15, 1998 $ 6,120
ODESSA-MIDLAND, TEXAS
New Frontier Communications, Inc.
(KBAT-FM, KODM-FM, KNFM-FM, KGEE-FM and KMND-AM).......... July 2, 1998 $ 15,083
</TABLE>

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MARKETS AND STATIONS ACQUISITION DATE PURCHASE PRICE
-------------------- ---------------- --------------
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CHATTANOOGA, TENNESSEE
Republic Corporation
(WUSY-FM)................................................. July 2, 1998 $ 20,640
Chattanooga Broadcasting Group
(WLMX-FM, WLMX-AM and WZST-FM)............................ July 31, 1998 $ 5,500
MONTGOMERY, ALABAMA
Republic Corporation
(WMSP-AM, WNZZ-AM, WMXS-FM and WLWI-FM)................... July 2, 1998 $ 20,724
MARION -- CARBONDALE, ILLINOIS
Clearly Superior Radio Properties, LLC
(WDDD-FM, WDDD-AM, WFRX-AM, WTAO-FM, WVZA-FM and
WQUL-FM).................................................. July 2, 1998 $ 12,795
SAVANNAH, GEORGIA
Lewis Broadcasting
(WJCL).................................................... July 6, 1998 $ 7,520
Savannah Communications, L.P.
(WIXV-FM, WSGF-FM and WBMQ-AM)............................ July 31, 1998 $ 5,268
Ocmulgee Broadcasting Co., Inc.
(WEAS-FM and WEAS-AM)..................................... September 24, 1998 $ 5,206
Phoenix Broadcast Partners
(WZAT-FM)................................................. September 30, 1998 $ 3,518
GRAND JUNCTION, COLORADO
Jan-Di Broadcasting, Inc.
(KBKL-FM, KEKB-FM and KMXY-FM)............................ July 8, 1998 $ 6,344
BANGOR, MAINE
Castle Broadcasting, L.P.
(WQCB-FM and WBZN-FM)..................................... July 10, 1998 $ 6,672
MONROE, MICHIGAN
Lesnick Communications, Inc.
(WTWR-FM)................................................. July 23, 1998 $ 3,393
LAKE CHARLES, LOUISIANA
Louisiana Media Interests, Inc.
(KKGB-FM, KBIU-FM, KYKZ-FM and KXZZ-AM)................... July 24, 1998 $ 16,392
KALAMAZOO, MICHIGAN
Crystal Radio Group, Inc.
(WKFR-FM, WRKR-FM and WKMI-AM)............................ July 31, 1998 $ 14,180
BISMARCK, NORTH DAKOTA
JKJ Broadcasting, Inc., Missouri River Broadcasting, Inc.,
Ingstad Mankato, Inc., James Ingstad Broadcasting, Inc.,
and Hometown Wireless, Inc.
(KBYZ-FM, KACL-FM, KKCT-FM and KLXX-AM)................... August 14, 1998 $ 7,539
NEW ULM -- SPRINGFIELD -- MARSHALL, MINNESOTA
JKJ Broadcasting, Inc., Missouri River Broadcasting, Inc.,
Ingstad Mankato, Inc., James Ingstad Broadcasting,
Inc.,and Hometown Wireless, Inc.
(KNUJ-FM, KNUJ-AM and KNSG-FM)............................ August 14, 1998 $ 5,460
WASECA, MINNESOTA
JKJ Broadcasting, Inc., Missouri River Broadcasting, Inc.,
Ingstad Mankato, Inc., James Ingstad Broadcasting, Inc.,
and Hometown Wireless, Inc.
(KOWO-AM and KRUE-FM)..................................... August 14, 1998 $ 2,488
</TABLE>

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<TABLE>
<CAPTION>
MARKETS AND STATIONS ACQUISITION DATE PURCHASE PRICE
-------------------- ---------------- --------------
<S> <C> <C>
OWATONNA, MINNESOTA
JKJ Broadcasting, Inc., Missouri River Broadcasting, Inc.,
Ingstad Mankato, Inc., James Ingstad Broadcasting, Inc.,
and Hometown Wireless, Inc.
(KRFO-FM and KRFO-AM)..................................... August 14, 1998 $ 2,488
MANKATO, MINNESOTA
JKJ Broadcasting, Inc., Missouri River Broadcasting, Inc.,
Ingstad Mankato, Inc., James Ingstad Broadcasting, Inc.,
and Hometown Wireless, Inc.
(KXLP-FM, KYSM-AM and KYSM-FM)............................ August 14, 1998 $ 11,153
MASON CITY, IOWA
JKJ Broadcasting, Inc., Missouri River Broadcasting, Inc.,
Ingstad Mankato, Inc., James Ingstad Broadcasting, Inc.,
and Hometown Wireless, Inc.
(KCHA-FM, KGLO-AM, KIAI-FM and KLKK-FM)................... August 14, 1998 $ 11,404
FARIBAULT, MINNESOTA
Radio Ingstad Minnesota, Inc., Radio Albert Lea, Inc., and
KRCH of Minnesota
(KRCH-FM, KWEB-AM, KMFX-F and KMFX-AM).................... August 14, 1998 $ 4,197
ROCHESTER, MINNESOTA
Radio Ingstad Minnesota, Inc., Radio Albert Lea, Inc., and
KRCH of Minnesota
(KRCH-FM, KWEB-AM, KMFX-FM and KMFX-AM)................... August 14, 1998 $ 6,242
TOPEKA, KANSAS
Midland Broadcasters, Inc.
(KMAJ-FM, KMAJ-AM, KDVV-FM and KTOP-AM)................... September 30, 1998 $ 11,111
GREEN BAY, WISCONSIN
American Communications Company
(KJLW-FM)................................................. October 2, 1998 $ 2,606
Brillion Radio Company
(WEZR-FM)................................................. November 2, 1998 $ 2,115
AUGUSTA-WATERVILLE, MAINE
Tryon-Seacoast, Inc.
(WABK-FM, WKCG-FM, WIGY-FM, WCME-FM and WFAU-AM).......... October 16, 1998 $ 4,340
ALBANY, GEORGIA
K-Country, Inc.
(WEGC-FM and WJAD-FM)..................................... October 26, 1998 $ 1,911
TUPELO, MISSISSIPPI
Charisma Communications
(WESE-FM, WWZD-FM, WTUP-AM and WNRX-AM)................... December 29, 1998 $ 3,425
--------
TOTAL $344,018
========
</TABLE>

During the twelve months ended December 31, 1998, the Company operated the
following stations under local marketing agreements ("LMA"):

<TABLE>
<CAPTION>
MARKET AND STATIONS LMA EFFECTIVE DATE
------------------- ------------------
<S> <C>
GREEN BAY, WISCONSIN
American Communications Co.
(WJLW-FM)................................................. February 15, 1998
</TABLE>

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<TABLE>
<CAPTION>
MARKET AND STATIONS LMA EFFECTIVE DATE
------------------- ------------------
<S> <C>
Brillion Radio Company
(WEZR-FM)................................................. February 15, 1998
AUGUSTA, GEORGIA
Savannah Valley Broadcasting Radio Properties
(WBBQ-AM and WBBQ-FM)..................................... September 4, 1997
SALISBURY, MARYLAND
WWFG-FM and WOSC-FM
(WWFG-FM and WOSC-FM)..................................... February 1, 1998
TALLAHASSEE, FLORIDA
HVS Partners
(WHBX-FM, WBZE-FM and WHBT-AM)............................ August 18, 1997
Tally Radio, L.C
(WWLD-FM)................................................. August 18, 1997
Tallahassee Broadcasting, Inc.
(WGLF-FM)................................................. August 18, 1997
ABILENE, TEXAS
Big Country Broadcasting
(KBCY-FM and KCDD-FM)..................................... November 1, 1997
IQ Radio, Inc.
(KHXS-FM)................................................. November 1, 1997
Esprit Communications
(KFQX-FM)................................................. April 1, 1998
AMARILLO, TEXAS
Westwind
(KPUR-FM and KPUR-AM)..................................... January 1, 1998
Heritage Communications
(KZRK-FM and KZRK-AM)..................................... January 1, 1998
West Jewel
(KARX-FM)................................................. January 1, 1998
Wiskes-Abaris
(KQIZ-FM)................................................. February 15, 1998
ODESSA-MIDLAND, TEXAS
New Frontier Communications, Inc.
(KGEE-FM, KODM-FM, KNFM-FM, KMND-AM and KBAT-FM).......... January 1, 1998
MARION CARBONDALE, ILLINOIS
Clearly Superior Radio Properties
(WDDD-FM, WDDD-AM, WTAO-FM, WVZA-FM, WQUL-FM and
WFRX-AM).................................................. January 1, 1998
COLUMBUS, GEORGIA
Minority Associates
(WAGH-FM)................................................. January 1, 1998
Solar Broadcasting Company, Inc.
(WSTH-FM and WDAK-AM)..................................... December 17, 1998
SAVANNAH, GEORGIA
Savannah Communications, L.P.
(WBMQ-AM, WIXV-FM and WSGF-FM)............................ January 1, 1998
WJCL-FM
(WJCL-FM)................................................. January 1, 1998
Phoenix Broadcast Partners, Inc.
(WZAT-FM)................................................. March 16, 1998
</TABLE>

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<TABLE>
<CAPTION>
MARKET AND STATIONS LMA EFFECTIVE DATE
------------------- ------------------
<S> <C>
BEAUMONT, TEXAS
Beaumont Skywave, Inc.
(KTCX-FM)................................................. February 15, 1998
MYRTLE BEACH, SOUTH CAROLINA
Carolina Broadcasting, Inc.
(WXJY-FM)................................................. March 16, 1998
FLORENCE, SOUTH CAROLINA
Clarendon County Broadcasting
(WHLZ-FM and WYMB-AM)..................................... March 18, 1998
Pamplico Broadcasting, L.P.
(WBZF-FM, WMXT-FM and WWFN-FM)............................ March 16, 1998
MONTGOMERY, ALABAMA
Republic Corporation
(WMSP-AM, WNZZ-AM, WMXS-FM and WLWI-FM)................... February 11, 1998
McDonald Media Group, Inc.
(WHHY-AM, WJCC-FM and WXFX-FM)............................ August 17, 1998
CHATTANOOGA, TENNESSEE
Republic Corporation
(WUSY-FM)................................................. February 11, 1998
Marson Broadcasting, Inc.
(WKXJ-FM)................................................. July 1, 1998
AUGUSTA, GEORGIA
P&T Broadcasting, Inc.
(WLOV-AM and WLOV-FM)..................................... April 1, 1998
Estate of George G. Weiss
(WZNY-FM)................................................. December 14, 1998
DUBUQUE, IOWA
KIKR, INC.
(KIKR-FM)................................................. April 1, 1998
ALBANY, GEORGIA
Brooks Broadcasting Co.
(WKAK-FM, WEGC-FM, WALG-AM and WJAD-FM)................... April 1, 1998
Albany Broadcasting Co.
(WGPC-FM and WGPC-AM)..................................... June 1, 1998
Williams Communications Systems, Inc.
(WQVE-FM)................................................. July 2, 1998
MONROE, MICHIGAN
Lesnick Communications, Inc.
(WTWR-FM)................................................. April 1, 1998
FLORENCE, SOUTH CAROLINA
Nautical Broadcasting
(WCMG-FM)................................................. April 1, 1998
MYRTLE BEACH, SOUTH CAROLINA
Blue Dolphin of South Carolina, Inc.
(WSEA-FM)................................................. April 1, 1998
COLUMBUS -- STARKVILLE, MISSISSIPPI
Charisma Communications
(WSSO-AM, WMXU-FM, WSMS-FM, WKOR-FM, WKOR-AM and
WMSU-FM).................................................. September 30, 1998
</TABLE>

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<TABLE>
<CAPTION>
MARKET AND STATIONS LMA EFFECTIVE DATE
------------------- ------------------
<S> <C>
TUPELO, MISSISSIPPI
Charisma Communications
(WESE-FM, WTUP-AM, WNRX-AM and WWZD-FM)................... September 30, 1998
</TABLE>

The statement of operations for the twelve months ended December 31, 1998
includes the revenue and broadcast operating expenses of these radio stations
and any related fees associated with the LMA from the effective date of the LMA
through the earlier of (i) the date of acquisition of such station by the
Company; or (ii) December 31, 1998.

In December of 1998 the Company formed Cumulus Wireless Services, Inc.
("Wireless Services") a wholly owned subsidiary of Cumulus Broadcasting Inc. to
develop additional revenue and cash flow from its broadcast towers. For the year
ended December 31, 1998 Wireless Services did not report any net revenue, net
income, or cash flow.

INDUSTRY OVERVIEW

Revenues for radio stations are generated primarily from the sale of
advertising time to local and national spot advertisers and national network
advertisers. The growth in total radio advertising revenue tends to be fairly
stable. With the exception of 1991, when total radio advertising revenue fell by
approximately 3.1% compared to the prior year, advertising revenue has generally
risen in each of the past 16 years faster than both inflation and the gross
national product. According to the RAB's Radio Marketing Guide and Fact Book for
Advertisers 1998, each week radio reaches approximately 96% of all Americans
over the age of 12. More than 60% of all radio listening is done outside the
home and car radio reaches four out of five adults each week. The average
listener spends approximately three hours and 24 minutes per day listening to
radio. The highest portion of radio listenership occurs during the morning,
particularly between the time a listener wakes up and the time the listener
reaches work. This "morning drive time" period reaches more than 80% of people
over 12 years of age, and as a result, radio advertising sold during this period
achieves premium advertising rates.

Radio is considered an efficient, cost-effective 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 enables it to target specific
segments of listeners sharing certain demographic features. By capturing a
specific share of a market's radio listening audience, with particular
concentration in a targeted demographic, a station is able to market its
broadcasting time to advertisers seeking to reach a specific audience.
Advertisers and stations use data published by audience measuring services, such
as Arbitron, to estimate how many people within particular geographical markets
and demographics listen to specific stations.

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 and the local competitive environment. 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
usually 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 they obtain.

GENERATION OF REVENUE

Virtually all of our revenue is generated from the sale of local, regional
and national advertising for broadcast on our radio stations. Approximately 89%
of our net broadcasting revenues were generated from the

11
<PAGE> 12

sale of local and regional advertising in each of 1998 and 1997. Additionally,
broadcasting revenues are generated from the sale of national advertising. Our
advertisers include companies in the following industries:

<TABLE>
<S> <C> <C>
- - Automotive - Telecommunications - Movies
- - Retail - Fast Food - Entertainment
- - Healthcare - Beverage - Services
</TABLE>

SALES AND MARKETING

Each station's local sales staff solicits advertising either directly from
the local advertiser or indirectly through an advertising agency. Cumulus
employs a tiered commission structure to focus our individual sales staffs on
new business development. Consistent with our operating strategy of dedicated
sales forces for each of our stations; we have increased the number of sales
persons per station. We believe that we can outperform the traditional growth
rates of our markets by: (i) expanding our customer base to include advertisers
who have historically not advertised or used other media such as newspaper and
television; (ii) expanding the sales organization to acquire and support an
expanded base of customers; (iii) providing more in-depth training to all sales
personnel; and (iv) providing a higher level of service to all advertisers. We
support our strategy of building local direct accounts by employing personnel in
each of our markets to produce custom commercials that respond to the needs of
our advertisers. In addition, in-house production provides advertisers greater
flexibility in changing their commercial messages with minimal lead-time.

Our national sales are made by firms specializing in radio advertising
sales on the national level in exchange for a commission that is based on our
net revenue from the advertising obtained. Regional sales, which we define as
sales in regions surrounding our markets to buyers that advertise in our
markets, are generally made by our local sales staff and market managers.
Whereas we seek to grow our local sales through larger and more customer-focused
sales staffs, we seek to grow our national and regional sales by offering to key
national and regional advertisers groups of stations within specific markets and
regions that make our stations more attractive.

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. We estimate the optimal number of advertisements available
for sale depending on the programming format of a particular station. Each of
our 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.
Our stations strive to maximize revenue by managing their on-air inventory of
advertising time and adjusting prices up or down based on supply and demand. We
seek to broaden our base of advertisers in each of our markets by providing a
wide array of audience demographic segments across our cluster of stations,
thereby providing each of our potential advertisers with an effective means of
reaching a targeted demographic group. Our selling and pricing activity is based
on demand for our radio stations' on-air inventory and, in general, we respond
to this demand by varying prices rather than by varying our target inventory
level for a particular station. Most changes in revenue are explained by
demand-driven pricing changes rather than by changes in the available inventory.
Advertising rates charged by radio stations are based primarily on:

- a station's share of audiences generally, and in the demographic groups
targeted by advertisers (as measured by ratings surveys);

- the supply of and demand for radio advertising time generally and for
time targeted at particular demographic groups; and

- certain additional 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 the Company to chart
audience growth, set advertising rates and adjust programming. The radio
broadcasting industry's principal ratings service is

12
<PAGE> 13

Arbitron, which publishes periodic ratings surveys for significant domestic
radio markets. These surveys are our primary source of ratings data.

COMPETITION

The radio broadcasting industry is highly competitive. The success of each
of our stations depends largely upon its audience ratings and its share of the
overall advertising revenue within its market. Our 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 our radio stations located in
that market. There can be no assurance that any one or all of our stations will
be able to maintain or increase current audience ratings or advertising revenue
market share.

Our stations compete for listeners and advertising revenue directly with
other radio stations within their respective markets, as well as with other
advertising media as discussed below. 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 specific
demographic groups in each of our markets, we are 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 our radio stations in the same geographic
area or to launch an aggressive promotional campaign may result in lower ratings
and advertising revenue, increased promotion and other expenses and,
consequently, lower Broadcast Cash Flow for the Company.

Factors that are material to a radio station's competitive position include
the station's audience rank in its market, transmitter power, assigned
frequency, audience characteristics, local program acceptance and the quality of
its sales and programming personnel. We attempt to improve our competitive
position in each market by researching listener response to programming,
implementing advertising campaigns aimed at the demographic groups targeted by
our stations; managing our sales efforts to attract a larger share of
advertising dollars for each station individually; and recruiting and training
quality sales and programming personnel for each station. However, we compete
with some organizations that have substantially greater financial or other
resources than we do.

The Telecommunications Act of 1996 (the "Telecom Act") permits common
ownership and operation of multiple radio stations in the same city or market.
These groups of stations within a market are called "clusters." Factors that are
material to a cluster's competitive position include the factors mentioned above
relating to each station, the over all quality of the cluster's management, and
the degree to which the cluster operates, by ownership or under LMA, the maximum
number of stations allowed by the Telecom Act. Although 76% of Cumulus's
clusters are completed to the maximum allowed by the Telecom Act and we are
working to complete the other clusters, there can be no assurance that we can
acquire the needed stations. In station acquisition we compete with companies
with substantially greater resources.

Although the radio broadcasting industry is highly competitive, and
competition is enhanced to some extent by changes in existing radio station
formats and upgrades of power, among other actions, certain regulatory
limitations on entry exist. The operation of a radio broadcast station requires
a license from the FCC, and the number of radio stations that an entity can
operate in a given market is limited by regulatory and technical restrictions on
operating additional stations 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 Telecom Act. For a discussion of FCC regulation
and the provisions of the Telecom Act, see "Federal Regulation of Radio
Broadcasting."

Our stations also compete directly for advertising revenue with other
media, especially newspapers, broadcast television, and cable television. 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
13
<PAGE> 14

presently unregulated 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, such as
television broadcasting, cable television, audio tapes and compact discs. 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. The FCC
has also authorized two companies to provide digital audio radio service.
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.

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

EMPLOYEES

At December 31, 1998, we employed approximately 1,900 people. No employees
are covered by collective bargaining agreements, and we consider our relations
with our employees to be satisfactory.

We employ several on-air personalities with large loyal audiences in their
respective markets. On occasion, we enter into employment agreements with these
personalities to protect our interests in those relationships that we believe to
be valuable. The loss of one of these personalities could result in a short-term
loss of audience share, but we do not believe that any such loss would have a
material adverse effect on our financial condition or results of operations,
taken as a whole.

FEDERAL REGULATION OF RADIO BROADCASTING

Introduction. The ownership, operation and sale of broadcast stations,
including those licensed to the Company, are subject to the jurisdiction of the
FCC, which acts under authority derived from the Communications Act of 1934, as
amended (the "Communications Act"). The Communications Act was amended in 1996
by the Telecommunications Act of 1996 (the "Telecom Act") to make changes in
several broadcast laws. Among other things, the FCC grants permits and licenses
to construct and operate radio stations; assigns frequency bands for
broadcasting; determines whether to approve changes in ownership or control of
station licenses; regulates equipment used by stations and the operating power
and other technical parameters of stations; adopts and implements regulations
and policies that directly or indirectly affect the ownership, operation and
employment practices of stations; regulates the content of some forms of radio
broadcasting programming; and has the power to impose penalties for violations
of its rules under the Communications Act.

The following is a brief summary of certain provisions of the
Communications Act 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 monetary forfeitures, the grant of "short-term"
(less than the maximum term) license renewal 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.
Please refer to the Communications Act, 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. Radio broadcast licenses are granted and renewed
for maximum terms of eight years. Licenses may be renewed through an application
to the FCC. The Communications Act requires that the FCC grant the renewal of a
station's license if the FCC finds that, during the preceding term of the
license, the station has served the public interest, convenience and necessity,
that there have been no serious
14
<PAGE> 15

violations by the licensee of the Communications Act or the rules and
regulations of the FCC, and that there have been no other violations by the
licensee of the Communications Act or the rules and regulations of the FCC that,
when taken together, would constitute a pattern of abuse.

Petitions to deny license renewal applications can be filed by interested
parties, including members of the public. Such 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 patently 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. We are not currently aware of any facts that would prevent the
timely renewal of our licenses to operate our radio stations, although there can
be no assurance that our licenses will be renewed.

The FCC classifies each AM and FM station. An AM station operates on a
clear channel, a regional channel or a local channel. A clear channel is one on
which certain dominant AM stations are assigned to serve wide areas. Clear
channel AM stations are classified as one of the following:

- 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;

- Class C 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; and

- 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 to that community.

The area served by AM stations is determined by a combination of frequency,
transmitter power and antenna orientation. Directional antenna arrays are often
used to avoid or reduce interference to stations in certain locations. AM
stations are often required to reduce power or change directional pattern at
night in order to avoid interference to other licensees. To determine the
effective service area of an AM station, its power, its operating frequency, its
antenna patterns and its day/night operating modes are required.

The area served by FM stations is determined by a combination of
transmitter power and antenna height, with stations divided into classes
according to their anticipated service area. Antenna systems are typically
non-directional and power is the same, day and night.

Class C FM stations operate at 100 kilowatts of power with up to 1,968 feet
of antenna elevation above average terrain. They are the most powerful FM
stations, providing service to a large area, typically a substantial portion of
a state. Class B FM stations operate at up to 50 kilowatts of power with up to
500 feet of antenna elevation. These stations typically serve large metropolitan
areas as well as their associated suburbs. Class A FM stations operate at 6
kilowatts with up to 328 feet of antenna elevation, and serve smaller cities and
towns or suburbs of larger cities.

The minimum and maximum facilities requirements for a 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 elevation above average terrain (for FM stations only),
power and frequency of each of the stations owned or operated by the
15
<PAGE> 16

Company, assuming the consummation of the pending acquisitions, and the date on
which each station's FCC license expires.

<TABLE>
<CAPTION>
HEIGHT POWER
ABOVE (IN
AVERAGE KILOWATTS)
EXPIRATION FCC TERRAIN -------------
MARKET STATIONS CITY OF LICENSE FREQUENCY DATE OF LICENSE CLASS (IN FEET) DAY NIGHT
------ -------- --------------- --------- --------------- ----- --------- --- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MIDWEST REGION
Ann Arbor, MI.......... WIQB FM Ann Arbor, MI 102.9 October 1, 2004 B 499 49.0 49.0
WQKL FM Ann Arbor, MI 107.1 October 1, 2004 A 289 3.0 3.0
WTKA AM Ann Arbor, MI 1050 October 1, 2004 B N.A. 10.0 0.5
WDEO AM Saline, MI 1290 October 1, 2004 B N.A. 0.5 0.0
Appleton Oshkosh/Green
Bay, WI................ WUSW FM Oshkosh, WI 96.7 December 1, 2004 A 328 6.0 6.0
WVBO FM Oshkosh, WI 103.9 December 1, 2004 C3 318 25.0 25.0
WOGB FM Kaukauna, WI 103.1 December 1, 2004 C3 879 25.0 25.0
WNAM AM Neenah Menasha, WI 1280 December 1, 2004 B N.A. 20.0 5.0
WOSH AM Oshkosh, WI 1490 December 1, 2004 C N.A. 1.0 1.0
WJLW FM Allouez, WI 106.7 December 1, 2004 C3 509 25.0 25.0
WEZR FM Brillion, WI 107.5 December 1, 2004 A 328 6.0 6.0
Dubuque, IA............ KLYV FM Dubuque, IA 105.3 February 1, 2005 C2 331 50.0 50.0
KXGE FM Dubuque, IA 102.3 February 1, 2005 A 410 1.7 1.7
WDBQ FM Galena, IL 107.5 February 1, 2005 A 328 3.0 3.0
WDBQ AM Dubuque, IA 1490 February 1, 2005 C N.A. 1.0 1.0
WJOD FM Asbury, IA 103.3 February 1, 2005 C3 643 6.6 6.6
Bismarck, ND........... KBYZ FM Bismarck, ND 96.5 April 1, 2005 C 1001 100.0 100.0
KACL FM Bismarck, ND 98.7 April 1, 2005 C 1093 100.0 100.0
KKCT FM Bismarck, ND 97.5 April 1, 2005 C1 830 100.0 100.0
KLXX AM Bismarck, ND 1270 April 1, 2005 B N.A. 1.0 0.3
KSSS FM Bismarck, ND 101.5 April 1, 2005 C 988 100.0 100.0
KBMR AM Bismarck, ND 1130 April 1, 2005 B N.A. 10.0 0.0
Kalamazoo, MI.......... WKFR FM Battle Creek, MI 103.3 October 1, 2004 B 482 50.0 50.0
WRKR FM Portage, MI 107.7 October 1, 2004 B 489 50.0 50.0
WKMI AM Kalamazoo, MI 1360 October 1, 2004 B N.A. 5.0 1.0
Faribault, MN.......... KDHL AM Faribault, MN 920 April 1, 2005 B N.A. 5.0 5.0
KQCL FM Faribault, MN 95.9 April 1, 2005 A 328 3.0 3.0
KQPR FM Albert Lea, MN 96.1 April 1, 2005 A 328 6.0 6.0
KNFX AM Austin, MN 970 April 1, 2005 B N.A. 5.0 0.5
Owatonna-Waseca, MN.... KRFO AM Owatonna, MN 1390 April 1, 2005 B N.A. 0.5 0.1
KRFO FM Owatonna, MN 104.9 April 1, 2005 A 174 4.7 4.7
KOWO AM Waseca, MN 1170 April 1, 2005 B N.A. 1.0 0.0
KRUE FM Waseca, MN 92.1 April 1, 2005 C3 285 25.0 25.0
Mankato, MN............ KXLP FM New Ulm, MN 93.1 April 1, 2005 C1 489 100.0 100.0
KYSM AM Mankato, MN 1230 April 1, 2005 C N.A. 1.0 1.0
KYSM FM Mankato, MN 103.5 April 1, 2005 C1 541 100.0 100.0
Marion-Carbondale,
IL..................... WDDD FM Marion, IL 107.3 December 1, 2004 B 492 50.0 50.0
WDDD AM Johnston City, IL 810 December 1, 2004 B N.A. 0.3 0.3
WFRX AM West Frankfort, IL 1300 December 1, 2004 B N.A. 1.0 0.1
WTAO FM Murphysboro, IL 105.1 December 1, 2004 B1 308 25.0 25.0
WVZA FM Herrin, IL 92.7 December 1, 2004 B1 328 25.0 25.0
WQUL FM West Frankfort, IL 97.7 December 1, 2004 A 433 3.5 3.5
Mason City, IA......... KCHA FM Charles City, IA 95.9 February 1, 2005 A 299 3.0 3.0
KGLO AM Mason City, IA 1300 February 1, 2005 B N.A. 5.0 5.0
KIAI FM Mason City, IA 93.9 February 1, 2005 C1 791 100.0 100.0
KLKK FM Clear Lake, IA 103.1 February 1, 2005 A 308 6.0 6.0
KCHA AM Charles City, IA 1580 February 1, 2005 B N.A. 0.5 0.0
KCZE FM New Hampton, IA 95.1 February 1, 2005 A 338 5.5 5.5
KWMM FM Osage, IA 103.7 February 1, 2005 A 154 6.0 6.0
New Ulm-Springfield-
Marshall, MN........... KNUJ AM New Ulm, MN 860 April 1, 2005 B N.A. 1.0 0.1
KNUJ FM Sleepy Eye, MN 107.3 April 1, 2005 A 400 1.9 1.9
KNSG FM Springfield, MN 94.7 April 1, 2005 C2 472 50.0 50.0
</TABLE>

16
<PAGE> 17

<TABLE>
<CAPTION>
HEIGHT POWER
ABOVE (IN
AVERAGE KILOWATTS)
EXPIRATION FCC TERRAIN -------------
MARKET STATIONS CITY OF LICENSE FREQUENCY DATE OF LICENSE CLASS (IN FEET) DAY NIGHT
------ -------- --------------- --------- --------------- ----- --------- --- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Rochester, MN.......... KRCH FM Rochester, MN 101.7 April 1, 2005 C2 554 39.0 39.0
KWEB AM Rochester, MN 1270 April 1, 2005 B N.A. 5.0 1.0
KMFX FM Lake City, MN 102.5 April 1, 2005 C3 528 9.4 9.4
KMFX AM Wabasha, MN 1190 April 1, 2005 B N.A. 1.0 0.0
Toledo, OH............. WKKO FM Toledo, OH 99.9 October 1, 2003 B 499 50.0 50.0
WRQN FM Bowling Green, OH 93.5 October 1, 2003 A 397 4.1 4.1
WTOD AM Toledo, OH 1560 October 1, 2003 B N.A. 5.0 0.0
WWWM FM Sylvania, OH 105.5 October 1, 2003 A 390 4.3 4.3
WLQR AM Toledo, OH 1470 October 1, 2003 B N.A. 1.0 1.0
WXKR FM Port Clinton, OH 94.5 October 1, 2003 B 630 30.0 30.0
WTWR FM Monroe, MI 98.3 October 1, 2004 A 466 1.4 1.4
WBUZ FM Delta, OH 106.5 October 1, 2003 A 328 3.0 3.0
WJZE FM Oak Harbor, OH 97.3 October 1, 2003 A 407 1.6 1.6
SOUTHEAST REGION
Albany, GA............. WNUQ FM Albany, GA 101.7 April 1, 2004 A 299 3.0 3.0
WEGC FM Sasser, GA 107.7 April 1, 2004 C3 328 25.0 25.0
WALG AM Albany, GA 1590 April 1, 2004 B N.A. 5.0 1.0
WJAD FM Leesburg, GA 103.5 April 1, 2004 C3 463 12.5 12.5
WKAK FM Albany, GA 104.5 April 1, 2004 C1 981 98.0 98.0
WGPC AM Albany, GA 1450 April 1, 2004 C N.A. 1.0 1.0
WQVE FM Camilla, GA 105.5 April 1, 2004 A 276 6.0 6.0
Augusta, GA............ WEKL FM Augusta, GA 102.3 April 1, 2004 A 666 1.5 1.5
WRXR FM Aiken, SC 96.3 April 1, 2004 C2 889 15.0 15.0
WUUS FM Martinez, GA 107.7 April 1, 2004 C2 577 24.5 24.5
WGUS AM N. Augusta, SC 1380 April 1, 2004 B N.A. 4.0 0.1
WBBQ FM Augusta, GA 104.3 April 1, 2004 C 1001 100.0 100.0
WBBQ AM Augusta, GA 1340 April 1, 2004 C N.A. 1.0 1.0
WXKT FM Washington, GA 100.1 April 1, 2004 A 322 2.4 2.4
WLOV AM Washington, GA 1370 April 1, 2004 B N.A. 1.0 0.0
WZNY FM Augusta, GA 105.7 April 1, 2004 C 1168 100.0 100.0
Chattanooga, TN........ WUSY FM Cleveland, TN 100.7 April 1, 2005 C 1191 100.0 100.0
WKXJ FM South Pittsburgh, 97.3 April 1, 2005 C2 856 16.0 16.0
WLMX FM Rossville, GA 105.5 April 1, 2004 A 646 1.6 1.6
Chattanooga, TN........ WLMX AM Rossville, GA 980 April 1, 2004 B N.A. 0.5 0.1
WLOV FM Signal Mountain, 98.1 April 1, 2005 A 794 1.0 1.0
Columbus, GA........... WVRK FM Columbus, GA 102.9 April 1, 2004 C 1519 100.0 100.0
WGSY FM Phenix City, GA 100.1 April 1, 2004 A 328 6.0 6.0
WMLF AM Columbus, GA 1270 April 1, 2004 B N.A. 5.0 0.2
WPNX AM Phenix City, GA 1460 April 1, 2004 B N.A. 4.0 0.1
WAGH FM Ft. Mitchell, GA 98.3 April 1, 2004 A 328 6.0 6.0
WSTH FM Alexander City, AL 106.1 April 1, 2004 C1 981 81.0 81.0
WDAK AM Columbus, GA 540 April 1, 2004 B N.A. 5.0 0.5
WBFA FM Smiths, AL 101.3 April 1, 2004 A 328 6.0 6.0
Columbus-Starkville,
MS..................... WSSO AM Starkville, MS 1230 June 1, 2004 C N.A. 1.0 1.0
WMXU FM Starkville, MS 106.1 June 1, 2004 C2 502 40.0 40.0
WSMS FM Artesia, MA 99.9 June 1, 2004 C2 312 50.0 50.0
WKOR FM Columbus, MS 94.9 June 1, 2004 C2 492 50.0 50.0
WKOR AM Starkville, MS 980 June 1, 2004 B N.A. 1.0 0.0
WJWF FM Columbus, MS 1400 June 1, 2004 C N.A. 1.0 1.0
WMBC FM Columbus, MA 103.1 June 1, 2004 C2 755 22.0 22.0
Fayetteville, AR....... KFAY FM Bentonville, AR 98.3 June 1, 2004 C1 617 100.0 100.0
KFAY AM Farmington, AR 1030 June 1, 2004 B N.A. 10.0 1.0
KKEG FM Fayetteville, AR 92.1 June 1, 2004 C3 548 7.6 7.6
KAMO FM Rogers, AR 94.3 June 1, 2004 C2 692 25.1 25.1
KMCK FM Siloam Springs, AR 105.7 June 1, 2004 C1 476 100.0 100.0
KZRA AM Springdale, AR 1590 June 1, 2004 B N.A. 2.5 0.1
Florence, SC........... WYNN FM Florence, SC 106.3 December 1, 2003 A 325 6.0 6.0
WYNN AM Florence, SC 540 December 1, 2003 B N.A. 0.3 0.2
</TABLE>

17
<PAGE> 18

<TABLE>
<CAPTION>
HEIGHT POWER
ABOVE (IN
AVERAGE KILOWATTS)
EXPIRATION FCC TERRAIN -------------
MARKET STATIONS CITY OF LICENSE FREQUENCY DATE OF LICENSE CLASS (IN FEET) DAY NIGHT
------ -------- --------------- --------- --------------- ----- --------- --- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WHLZ FM Manning, SC 92.5 December 1, 2003 C 1171 98.0 98.0
WYMB AM Manning, SC 920 December 1, 2003 B N.A. 2.3 1.0
WCMG FM Latta, SC 94.3 December 1, 2003 C3 502 10.5 10.5
WHSC AM Hartsville, SC 1450 December 1, 2003 C N.A. 1.0 1.0
WHSC FM Hartsville, SC 98.5 December 1, 2003 A 328 3.0 3.0
WBZF FM Marion, SC 100.5 December 1, 2003 C3 354 21.5 21.5
WMXT FM Pamplico, SC 102.1 December 1, 2003 C2 479 50.0 50.0
WWFN FM Lake City, SC 100.1 December 1, 2003 A 433 3.3 3.3
Fort Smith, AR......... KLSZ FM Van Buren, AR 102.7 June 1, 2004 C3 476 12.0 12.0
KOMS FM Poteau, OK 107.3 June 1, 2005 C 1811 100.0 100.0
Laurel-Hattiesburg,
MS..................... WEEZ FM Heidelberg, MS 99.3 June 1, 2004 C2 492 50.0 50.0
WFOR AM Hattiesburg, MS 1400 June 1, 2004 C N.A. 1.0 1.0
WHER FM Hattiesburg, MS 103.7 June 1, 2004 C 1057 100.0 100.0
Montgomery, AL......... WMSP AM Montgomery, AL 740 April 1, 2004 B N.A. 10.0 0.0
WNZZ AM Montgomery, AL 950 April 1, 2004 B N.A. 1.0 0.4
WMXS FM Montgomery, AL 103.3 April 1, 2004 C 1096 100.0 100.0
WLWI FM Montgomery, AL 92.3 April 1, 2004 C 1096 100.0 100.0
WHHY FM Montgomery, AL 101.9 April 1, 2004 C 1096 100.0 100.0
WHHY AM Montgomery, AL 1440 April 1, 2004 B N.A. 5.0 1.0
WXFX FM Prattville, AL 95.1 April 1, 2004 C2 476 50.0 50.0
Myrtle Beach, SC....... WSYN FM Georgetown, SC 106.5 December 1, 2003 C2 492 50.0 50.0
WDAI FM Pawley's Island, 98.5 December 1, 2003 A 328 6.0 6.0
WJXY FM Conway, SC 93.9 December 1, 2003 A 420 3.7 3.7
WXJY FM Georgetown, SC 93.7 December 1, 2003 A 328 6.0 6.0
WJXY AM Conway, SC 1050 December 1, 2003 B N.A. 5.0 0.5
WSEA FM Atlantic Beach, SC 100.3 December 1, 2003 A 476 2.6 2.6
Muscle Shoals, AL...... WLAY FM Muscle Shoals, AL 105.5 April 1, 2004 A 742 1.1 1.1
WLAY AM Muscle Shoals, AL 1450 April 1, 2004 C N.A. 1.0 1.0
WKGL FM Russellville, AL 97.7 April 1, 2004 A 430 3.5 3.5
Pensacola, FL.......... WWRO FM Pensacola, FL 100.7 February 1, 2004 C 1555 100.0 100.0
WCOA AM Pensacola, FL 1370 February 1, 2004 B N.A. 5.0 5.0
Salisbury -- Ocean
City, MD............... WLVW FM Salisbury, MD 105.5 October 1, 2003 A 384 2.1 2.1
WLBW FM Fenwick Island, DE 92.1 August 1, 2006 A 308 6.0 6.0
Salisbury -- Ocean
City, MD............... WQHQ FM Salisbury, MD 104.7 October 1, 2003 B 610 33.0 33.0
WTGM AM Salisbury, MD 960 October 1, 2003 B N.A. 5.0 5.0
WOSC FM Bethany Beach, DE 95.9 October 1, 2003 B1 377 18.8 18.8
WWFG FM Ocean City, MD 99.9 October 1, 2003 B 315 50.0 50.0
WSBY FM Salisbury, MD 98.9 October 1, 2003 A 325 6.0 6.0
WJDY AM Salisbury, MD 1470 October 1, 2003 B N.A. 5.0 0.0
Savannah, GA........... WJCL FM Savannah, GA 96.5 April 1, 2004 C 1161 100.0 100.0
WIXV FM Savannah, GA 95.5 April 1, 2004 C1 856 100.0 100.0
WSIS FM Springfield, GA 103.9 April 1, 2004 A 328 6.0 6.0
WBMQ AM Savannah, GA 630 April 1, 2004 B N.A. 5.0 5.0
WEAS FM Savannah, GA 93.1 April 1, 2004 C1 981 97.0 97.0
WJLG AM Savannah, GA 900 April 1, 2004 B N.A. 4.4 0.2
WZAT FM Savannah, GA 102.1 April 1, 2004 C 1306 100.0 100.0
Tallahassee, FL........ WHBX FM Tallahassee, FL 96.1 February 1, 2004 C2 479 37.0 37.0
WBZE FM Tallahassee, FL 98.9 February 1, 2004 C1 604 100.0 100.0
WHBT AM Tallahassee, FL 1410 February 1, 2004 B N.A. 5.0 0.0
WWLD FM Tallahassee, FL 106.1 February 1, 2004 A 328 6.0 6.0
WGLF FM Tallahassee, FL 104.1 February 1, 2004 C 1394 90.0 90.0
Tupelo, MS............. WESE FM Baldwyn, MS 92.5 June 1, 2004 A 328 5.4 5.4
WTUP AM Tupelo, MS 1490 June 1, 2004 C N.A. 1.0 1.0
WNRX AM Tupelo, MS 1060 June 1, 2004 B N.A. 9.6 0.0
WWZD FM New Albany, MS 106.7 June 1, 2004 C2 656 28.0 28.0
Wilmington, NC......... WWQQ FM Wilmington, NC 101.3 December 1, 2003 C2 545 40.0 40.0
WQSL FM Jacksonville, NC 92.3 December 1, 2003 C2 725 22.7 22.7
</TABLE>

18
<PAGE> 19

<TABLE>
<CAPTION>
HEIGHT POWER
ABOVE (IN
AVERAGE KILOWATTS)
EXPIRATION FCC TERRAIN -------------
MARKET STATIONS CITY OF LICENSE FREQUENCY DATE OF LICENSE CLASS (IN FEET) DAY NIGHT
------ -------- --------------- --------- --------------- ----- --------- --- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WXQR FM Jacksonville, NC 105.5 December 1, 2003 C2 794 19.0 19.0
WAAV FM Leland, NC 94.1 December 1, 2003 A 148 5.0 5.0
WAAV AM Leland, NC 980 December 1, 2003 B N.A. 5.0 5.0
SOUTHWEST REGION
Abilene, TX............ KCDD FM Hamlin, TX 103.7 August 1, 2005 C1 745 100.0 100.0
KBCY FM Tye, TX 99.7 August 1, 2005 C 984 98.0 98.0
KFQX FM Abilene, TX 106.3 August 1, 2005 C2 492 50.0 50.0
KHXS FM Merkel, TX 102.7 August 1, 2005 C1 1148 66.0 66.0
Amarillo, TX........... KZRK FM Canyon, TX 107.9 August 1, 2005 C1 476 100.0 100.0
KZRK AM Canyon, TX 1550 August 1, 2005 B N.A. 1.0 0.2
KARX FM Claude, TX 95.7 August 1, 2005 C1 390 100.0 100.0
KPUR AM Amarillo, TX 1440 August 1, 2005 B N.A. 5.0 1.0
KPUR FM Canyon, TX 107.1 August 1, 2005 A 315 6.0 6.0
KQIZ FM Amarillo, TX 93.1 August 1, 2005 C1 699 100.0 100.0
Beaumont -- Port
Arthur, TX............. KAYD FM Beaumont, TX 97.5 August 1, 2005 C 1200 100.0 100.0
KQXY FM Beaumont, TX 94.1 August 1, 2005 C 1099 100.0 100.0
KQHN AM Nederland, TX 1510 August 1, 2005 B N.A. 5.0 0.0
KIKR AM Beaumont, TX 1450 August 1, 2005 C N.A. 1.0 1.0
KTCX FM Beaumont, TX 102.5 August 1, 2005 C2 492 50.0 50.0
Grand Junction, CO..... KBKL FM Grand Junction, CO 107.9 April 1, 2005 C 1460 100.0 100.0
KEKB FM Fruita, CO 99.9 April 1, 2005 C 1542 79.0 79.0
KMXY FM Grand Junction, CO 104.3 April 1, 2005 C 1460 100.0 100.0
KKNN FM Delta, CO 95.1 April 1, 2005 C 1424 100.0 100.0
KEXO AM Grand Junction, CO 1230 April 1, 2005 C N.A. 1.0 1.0
KQIL AM Grand Junction, CO 1340 April 1, 2005 C N.A. 1.0 1.0
Lake Charles, LA....... KKGB FM Sulphur, LA 101.3 June 1, 2004 C3 289 25.0 25.0
KBIU FM Lake Charles, LA 103.7 June 1, 2004 C1 469 100.0 100.0
KYKZ FM Lake Charles, LA 96.1 June 1, 2004 C 1204 97.0 97.0
KXZZ AM Lake Charles, LA 1580 June 1, 2004 B N.A. 1.0 1.0
Odessa-Midland, TX..... KBAT FM Midland, TX 93.3 August 1, 2005 C1 440 100.0 100.0
KODM FM Odessa, TX 97.9 August 1, 2005 C1 1000 100.0 100.0
KNFM FM Midland, TX 92.3 August 1, 2005 C 984 100.0 100.0
KGEE FM Monahans, TX 99.9 August 1, 2005 C1 574 98.0 98.0
Odessa -- Midland, TX KMND AM Midland, TX 1510 August 1, 2005 B N.A. 2.4 0.0
KRIL AM Odessa, TX 1410 August 1, 2005 B N.A. 1.0 1.0
Topeka, KS............. KDVV FM Topeka, KS 100.3 August 1, 2005 C 984 100.0 100.0
KMAJ FM Topeka, KS 107.7 August 1, 2005 C 988 100.0 100.0
KMAJ AM Topeka, KS 1440 August 1, 2005 B N.A. 5.0 1.0
KTOP AM Topeka, KS 1490 August 1, 2005 C N.A. 1.0 1.0
Wichita Falls, TX...... KLUR FM Wichita Falls, TX 99.9 August 1, 2005 C1 830 100.0 100.0
KQXC FM Wichita Falls, TX 102.5 August 1, 2005 A 312 4.5 4.5
KYYI FM Burkburnett, TX 104.7 August 1, 2005 C 1017 100.0 100.0
KOLI FM Electra, TX 94.9 August 1, 2005 C2 492 50.0 50.0
NORTHEAST REGION
Augusta-Waterville,
ME..................... WABK FM Gardiner, ME 104.3 April 1, 2006 B 371 50.0 50.0
WKCG FM Augusta, ME 101.3 April 1, 2006 B 322 50.0 50.0
WIGY FM Madison, ME 97.5 April 1, 2006 A 328 6.0 6.0
Boothbay Harbor,
WCME FM ME 96.7 April 1, 2006 B1 417 15.5 15.5
WFAU AM Gardiner, ME 1280 April 1, 2006 B N.A. 5.0 5.0
WTOS FM Skowhegan, ME 105.1 April 1, 2006 C 243 50.0 50.0
WCTB FM Fairfield, ME 93.5 April 1, 2006 C3 499 10.5 10.5
WSKW AM Skowhegan, ME 1160 April 1, 2006 B N.A. 10.0 7.3
Bangor, ME............. WQCB FM Brewer, ME 106.5 April 1, 2006 C 1079 98.0 98.0
WBZN FM Old Town, ME 107.3 April 1, 2006 C2 436 50.0 50.0
WWMJ FM Ellsworth, ME 95.7 April 1, 2006 B 1030 11.5 11.5
WEZQ FM Bangor, ME 92.9 April 1, 2006 B 787 20.0 20.0
WDEA AM Ellsworth, ME 1370 April 1, 2006 B 5.0 5.0 5.0
</TABLE>

19
<PAGE> 20

Regulatory Approvals. The Communications Act 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 grant or renew a broadcast
license or permit it to be assigned or transferred, the FCC considers a number
of factors pertaining to the licensee, including compliance with various rules
limiting common ownership of media properties, financial qualifications of the
licensee, the "character" of the licensee and those persons holding
"attributable" interests, and compliance with the Communications Act's
limitation on non-U.S. ownership, as well as compliance with other FCC rules and
policies, including programming and filing 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. The FCC publishes a notice assigning a file number to the
application and advising the public 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 the grant of an
application.

Once the 30-day public notice period ends, the staff generally will
complete its processing, assuming that no petitions or informal objections were
received and that the application is otherwise consistent with FCC rules and
acceptable to the staff. The staff often grants the application by delegated
authority approximately 10 to 15 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," and is subject to petitions
seeking staff reconsideration or full FCC review of the staff action by the FCC
on its own motion.

If no such reconsideration or review is sought or undertaken within 40 days
after the grant of application, the grant becomes final by operation of law and
generally is no longer subject to administrative or judicial review, although
such action can nevertheless be set aside in rare circumstances.

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

Ownership Matters. Under the Communications Act, the Company is restricted
to having no more than one-fourth of its stock owned or voted by non-U.S.
persons, foreign governments or non-U.S. corporations. The Company will be
required to take appropriate steps to monitor the citizenship of its
shareholders, such as through representative samplings on a periodic basis, to
provide a reasonable basis for certifying compliance with the foreign ownership
restrictions of the Communications Act.

The Communications Act 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, we would not be permitted to acquire any daily newspaper or
television broadcast station (other than low power television) in a local market
where we 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 Telecom Act directed the FCC to
extend this waiver policy to stations in the top 50 television markets, although
the FCC has not yet implemented this change. For purposes of these rules, a
"market" is defined by reference to the signal coverage(s) of the station(s)
involved.

The Telecom Act and the 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:

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

- in a market with between 30 and 44 (inclusive) commercial radio signals,
an entity may own up to seven commercial radio stations, not more than
four of which are in the same service;

20
<PAGE> 21

- in a market with between 15 and 29 (inclusive) commercial radio signals,
an entity may own up to six commercial radio stations, not more than four
of which are in the same service; and

- in a market with 14 or fewer commercial radio signals, 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 the Company's
current ownership of radio broadcast stations or precludes consummation of the
pending acquisitions, except that petitions to deny or informal objections have
been filed against the acquisition of stations in the Grand Junction, Colorado;
Tallahassee, Florida; Columbus-Starkville, Mississippi; and Augusta, Georgia
markets alleging that such acquisitions would result in undue market
concentration. These FCC rules and policies will limit the number of additional
stations, which the Company may acquire in the future in certain of its markets.
In addition, where acquisitions would result in certain local radio advertising
revenue concentration thresholds being met the FCC staff has a policy of
reviewing applications for proposed radio station acquisitions with respect to
local market concentration concerns, and specifically invites public comment on
such applications. Such policy may help trigger petitions to deny and informal
objections against FCC applications for certain pending acquisitions and future
acquisitions.

Because of these multiple and cross-ownership rules, a purchaser of voting
stock of the Company which acquires an "attributable" interest in the Company
may violate the FCC's rules if it also has an attributable or a non-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 the Company violates
any of these ownership rules, we may be unable to obtain from the FCC one or
more authorizations needed to conduct our radio station business and may be
unable to obtain FCC consents for certain 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 subject to 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, directors and persons or entities
that directly or indirectly can vote 5% or more of the corporation's stock (10%
or more of such stock in the case of insurance companies, investment companies,
bank trust departments and certain other "passive investors" that hold such
stock for investment purposes only) generally are attributed with ownership of
the radio stations, television stations and daily newspapers the corporation
owns.

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
where the limited partnership agreement expressly "insulates" the limited
partner from such material involvement, 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 and otherwise
"insulated" limited partnership interests) and significant employment positions.

21
<PAGE> 22

This policy may limit the permissible investments a purchaser of the Company's
voting stock may make or hold. It also may limit the Company's ability to
acquire stations in the same local market in which any of the Company's
non-attributable investors has an attributable media interest.

Programming and Operation. The Communications Act requires broadcasters to
serve the "public interest." Broadcasters are required to present programming
that is responsive to community problems, needs and interests and to maintain
certain 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 to the FCC 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 1998, the U.S. Court of Appeals for the District of Columbia
Circuit ruled that the FCC's rules requiring licensees to develop and implement
programs designed to promote equal employment opportunities were
unconstitutional. Subsequently, the FCC suspended its requirement that licensees
submit reports to the FCC. The broadcast of contests and lotteries 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-term" (less than the maximum term) renewal or, for particularly egregious
violations, the denial of a license renewal application or the revocation of a
license.

The FCC rules also 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 radio frequency radiation in excess of certain
guidelines. The Company anticipates that compliance with these radio frequency
radiation guidelines will not have a material effect on its business.

Local Marketing Agreements. Over the past six years, a number of radio
stations, including certain of the Company's stations, have entered into what
are commonly referred to as "local marketing agreements" or "time brokerage
agreements." In a typical LMA, the licensee of a station makes available, for a
fee, airtime on its station to a party, which supplies programming to be
broadcast during that airtime, and collects revenues from advertising aired
during such programming. LMAs are subject to compliance with the antitrust laws
and the FCC's rules and policies, including the requirement that the licensee of
each station maintain 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 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 an LMA 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 an LMA 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 a station from
simulcasting more than 25% of its programming on another station in the same
broadcast service (i.e., 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 an LMA arrangement.

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:

- 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;

22
<PAGE> 23

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

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

The FCC has made no decision in these matters. At this time, no
determination can be made as to what effect, if any, this proposed rulemaking
will have on the Company.

From time to time Congress and the FCC have considered, 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 the Company's radio stations, result in the loss
of audience share and advertising revenues for the Company's radio stations, and
affect the ability of the Company to acquire additional radio stations or
finance such acquisitions. Such matters include:

- the FCC's rules and regulations 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 lines; and

- proposals to limit the tax deductibility of advertising expenses by
certain types of advertisers.

In February, 1999 the FCC proposed rules to authorize the operation of two
new classes of low power FM radio stations; a 1,000-watt service and a 100-watt
service. The FCC also requested comment on whether a third 1 to 10-watt service
should be established, and whether any or all of such classes of new low power
FM stations should be limited to non-commercial operations. While the Company
cannot predict whether such rules will ultimately be adopted, such new low power
stations, if permitted to be established, may compete with the Company's
stations for advertising and other revenues and may cause interference with the
Company's broadcast signals.

The FCC, on April 2, 1997, awarded two licenses for the provision of
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 their entire system within six years. The
Company cannot predict whether the service will be subscription-based 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 audio
broadcasting following industry analysis of technical standards and has invited
and received comments on a petition requesting the FCC to initiate a rule making
with respect to digital audio broadcasting. 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.

In November, 1998 the FCC proposed rules that would require broadcast
licensees to inform women and members of minority groups of job vacancies.

The Company cannot predict whether any of the foregoing 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, the Telecom Act and specific FCC rules and policies. This
description does not purport to be comprehensive and reference should

23
<PAGE> 24

be made to the Communications Act, 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.

Antitrust and Market Concentration Considerations. The Department of
Justice, which evaluates transactions to determine whether those transactions
should be challenged under the federal antitrust laws, has been active recently
in its review of radio station acquisitions, particularly where an operator
proposes to acquire additional stations in its existing markets or multiple
stations in new markets. The Department of Justice has opened investigations
with respect to the Company's pending acquisitions in Grand Junction, Colorado;
and Tallahassee, Florida areas, which potentially affect the acquisition of up
to an additional four stations in the aggregate. The Department of Justice has
issued civil investigation demands to the Company and to other parties to those
pending acquisitions and to the Company and the other party to an LMA with
respect to three stations in the Montgomery, Alabama area, seeking additional
information regarding market concentration issues. The Department of Justice has
also informally requested that the Company supply certain information regarding
the acquisition of additional two stations in the Augusta-Waterville, Maine
area, and additional two stations in the Columbus, Georgia area. There can be no
assurance that one or more of these pending acquisitions will not be the subject
of an enforcement action by the Department of Justice or the Federal Trade
Commission or that other pending acquisitions will not be the subject of
investigation or action by the Department of Justice or the FCC. In addition,
the FCC staff has stated publicly that it is currently reviewing proposed
acquisitions with respect to local radio market concentration if publicly
available sources indicate that, following such acquisitions, one party would
receive 50% or more of the radio advertising revenues in such local radio
market, or that any two parties would together receive 70% or more of such
revenues, notwithstanding that the proposed acquisitions would comply with the
station ownership limits in the Telecom Act and the FCC's multiple-ownership
rule.

The FCC places a specific notation on the public notices with respect to
proposed radio station acquisitions that it believes may raise local market
concentration concerns inviting public comment on such matters. The FCC has
placed such specific notations on the public notices with respect to the
Company's pending acquisitions in the Tallahassee, Florida, Augusta-Waterville,
Maine, and the Columbus, Georgia areas. FCC approval of a number of pending
radio station acquisitions by various parties, including acquisitions by the
Company in several markets has been delayed while this review is taking place.
The FCC has issued a Notice of Inquiry, which, among other things, seeks public
comment on these issues. There can be no assurance that the Department of
Justice, the Federal Trade Commission or the FCC will not prohibit or require
the restructuring of future acquisitions, including one or more of the pending
acquisitions.

Competitors have also filed petitions or informal objections before the FCC
on market concentration grounds in four markets (Grand Junction, Colorado;
Columbus-Starkville, Mississippi; Tallahassee, Florida; and Augusta Georgia),
and all such petitions or objections must be resolved before FCC approval can be
obtained and the acquisitions consummated. The purchase agreements with respect
to the proposed acquisitions permit either party to terminate such agreement if
the acquisition has not been consummated by a certain date. While we have not
been notified of the intent of any other party to a proposed acquisition to
terminate a purchase agreement due to delays resulting from the failure of the
FCC to approve a proposed acquisition, there can be no assurance that one or
more agreements will not be terminated in the future.

For an acquisition meeting certain size thresholds, the Hart-Scott Rodino
Act (the "HSR Act") 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 transaction. If the agencies determine that the
transaction does not raise significant antitrust issues, then they will either
terminate the waiting period or allow it to expire after the initial thirty
days. On the other hand, if either of the agencies determines that the
transaction requires a more detailed investigation, then at the conclusion of
the initial thirty-day period, it will issue a formal request for additional
information ("Second Request").

During the initial thirty-day period after the filing, the agencies decide
which of them will investigate the acquisition, which in the case of radio
broadcasting has generally been the Department of Justice. The

24
<PAGE> 25

issuance of a Second 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 Second 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 consummation of the acquisition during their
pendency.

At any time before or after the consummation of a proposed acquisition, the
Department of Justice or the Federal Trade Commission 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 the Company. Acquisitions that are not
required to be reported under the HSR Act also may be investigated by the
Department of Justice or the Federal Trade Commission under the antitrust laws
before or after consummation. The Department of Justice can issue Civil
Investigative Demands to require the production of documents and/or the
testimony of witness, and may sue to enforce such demands in federal court.

The Department of Justice thus far has issued Civil Investigative Demands
to the Company and to sellers of stations proposed to be acquired by the Company
in three markets (Grand Junction, Colorado; Tallahassee, Florida; and
Montgomery, Alabama), and has informally requested information with respect to
pending acquisitions in two other markets; Augusta-Waterville, Maine and
Columbus, Georgia; and there can be no assurance that additional demands will
not be issued for other pending acquisitions or future acquisitions. In
addition, private parties may under certain circumstances bring legal action to
challenge an acquisition under the antitrust laws.

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 LMAs, joint sale agreements and other similar agreements
customarily entered into in connection with radio station ownership transfers
prior to the expiration of the waiting period under the HSR Act could violate
the HSR Act. In connection with acquisitions subject to the waiting period under
the HSR Act, the Company will not commence operation of any affected station to
be acquired under an LMA or similar agreement until the waiting period has
expired or been terminated.

ITEM 2. PROPERTIES

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

At December 31, 1998, the Company owned studio facilities in seventeen
markets and it owned transmitter and antenna sites in thirty-seven markets. We
lease additional studio and office facilities in twenty-five markets and
additional transmitter and antenna sites in nineteen markets. In addition, the
Company leases corporate office space in Atlanta, GA, Chicago, IL, and
Milwaukee, WI, which in the aggregate approximates 19,000 sq.ft. We do not
anticipate any difficulties in renewing any facility leases or in leasing
alternative or additional space, if required. The Company owns substantially all
of its other equipment, consisting principally of transmitting antennae,
transmitters, studio equipment and general office equipment.

No single property is material to our operations. We believe that our
properties are generally in good condition and suitable for our operations;
however, we continually look for opportunities to upgrade our properties and
intend to upgrade studios, office space and transmission facilities in certain
markets.
25
<PAGE> 26

ITEM 3. LEGAL PROCEEDINGS

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

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth
quarter of 1998.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Shares of the Company's Class A Common Stock, par value $.01 per share (the
"Class A Common Stock"), have been quoted on the Nasdaq Stock Market under the
symbol CMLS since the consummation of the initial public offering of the
Company's Class A Common Stock on June 26, 1998. The following table sets forth,
for the calendar quarters indicated, the high and low closing sales prices of
the Class A Common Stock on the Nasdaq Stock Market, as reported in published
financial sources.

<TABLE>
<CAPTION>
YEAR HIGH LOW
- ---- ---- ---
<C> <S> <C> <C>
1998
Third Quarter........................................... $17.88 $7.75
Fourth Quarter.......................................... $17.25 $4.88
1999 First Quarter (through February 28th)................... $18.00 $9.13
</TABLE>

As of February 28, 1999, there were approximately 20 holders of record of
the Class A Common Stock. The Company was informed by the underwriters in its
initial public offering that such underwriters expected that subsequent to such
offering there would be a sufficient number of beneficial owners of the
Company's common stock to comply with the minimum shareholder maintenance
standards set by the Nasdaq Stock Market.

The Company has not declared or paid any cash dividends on its common stock
since its inception and does not currently anticipate paying any cash dividends
on its common stock in the foreseeable future. The Company intends to retain
future earnings for use in its business. The Company is currently subject to
restrictions under the terms of the Credit Facility (as defined herein), the
indenture (the "Indenture") governing the Notes (as defined herein) and the
certificates of designations (the "Certificate of Designations") governing the
13.75% Series A Cumulative Exchangeable Redeemable Preferred Stock (the "Series
A Preferred Stock") that limit the amount of cash dividends that may be paid on
its Class A Common Stock. The Company may pay cash dividends on its Class A
Common Stock in the future only if certain financial tests set forth in the
Credit Facility, the Indenture and the Certificates of Designation are met and
only if it fulfills its obligations to pay dividends to the holders of its
Series A Preferred Stock.

Pursuant to a Registration Statement on Form S-1 (Commission File No.
333-48849) declared effective by the Securities and Exchange Commission on June
26, 1998 (the "Registration Statement"), the Company sold 7,228,572 shares
(including 800,000 shares pursuant to the exercise of the Underwriters' over
allotment options) of the Class A Common Stock, in an initial public offering
(the "Common Stock Offering"). An additional 1,170,000 shares of the Class A
Common Stock were sold by a selling stockholder in the Common Stock Offering. Of
the 7,598,572 shares of Class A Common Stock sold, 1,519,714 shares were sold in
an offering outside the U.S. and Canada (the "International Common Stock
Offering", and together with the Common Stock Offering, the "Common Stock
Offerings"). The offering price of the Class A Common Stock was $14.00 per
share, resulting in an aggregate offering price of $101.2 million for the
account of the Company and $16.4 million for the selling stockholder. After
underwriting discounts, the proceeds to the Company from

26
<PAGE> 27

the Common Stock Offerings were $94.2 million and the proceeds to the selling
stockholder were $15.2 million. All of the shares registered in the Common Stock
Offerings were sold.

Concurrently with the Common Stock Offerings, the Company sold in a
Preferred Stock Offering of $125.0 million of its 13 3/4% Series A Cumulative
Exchangeable Redeemable Preferred Stock Due 2009 (the "Preferred Stock
Offering"). Concurrently with the Common Stock Offering and the Preferred Stock
Offering, the Company sold in a debt offering of $160.0 million of its 10 3/8%
Senior Subordinated Notes due 2008 (the "Debt Offering"). The net proceeds of
the Preferred Stock Offering and the Debt Offering were $87.3 million and $156.0
million, respectively.

The Common Stock Offering closed on July 1, 1998 and the managing
underwriters for the Common Stock Offering were Lehman Brothers Inc., Bear,
Stearns & Co. Inc., and BT Alex. Brown. The International Common Stock Offering
also closed on July 1, 1998 and the managing underwriters for the Common Stock
Offering were Lehman Brothers International, Bear, Stearns International
Limited, BT Alex. Brown International, and Credit Lyonnais Securities.

The Preferred Stock Offering closed on July 1, 1998 and the managing
underwriters for the Preferred Stock Offering were Bear, Stearns & Co. Inc., and
Lehman Brothers Inc. The Debt Offering closed on July 1, 1998 and the managing
underwriters for the Debt Offering were Bear, Stearns & Co. Inc. and Lehman
Brothers Inc.

The net offering proceeds to the Company were used for the repayment of
bank debt (approximately $79.5 million); to complete the certain acquisitions
(approximately $230.7 million of which closed on or prior to December 31, 1998,
and the balance of which will close over the next three to six months, subject
to all applicable regulatory approvals), and finally to fund working capital,
capital expenditures, and other general corporate purposes.

Of these amounts, none were direct or indirect payments to officers,
directors or their associates, or persons owning 10% or more of any class of
equity securities of the Company. All material use of proceeds were direct or
indirect payments to others.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS)

The selected consolidated historical financial data presented below has
been derived from the annual audited consolidated financial statements of
Cumulus Media Inc. as of and for the year ended December 31, 1998 and as of and
for the period from the Company's inception on May 22, 1997 to December 31,
1997. The consolidated historical financial data of Cumulus Media Inc. are not
comparable from year to year because of the acquisition and disposition of
various radio stations by the Company during the periods covered. This data
should be read in conjunction with the consolidated financial statements of
Cumulus Media Inc., with the related notes thereto, as set forth in Part II,
Item 8 and with "Management's Discussion and Analysis of Financial Conditions
and Results of Operations" set forth in Part II, Item 7 herein.

The terms "Broadcast Cash Flow" and "EBITDA, before non-cash stock
compensation expense," are used in various places in this report.

Broadcast Cash Flow consists of:

- operating income (loss) before

- depreciation,

- amortization,

- non-cash stock compensation expense and

- corporate general and administrative expense.

27
<PAGE> 28

EBITDA, before non-cash stock compensation expense, consists of:

- operating income (loss) before

- depreciation,

- amortization and

- non-cash stock compensation expense.

EBITDA, before non-cash stock compensation expense, as defined by the
Company, may not be comparable to similarly titled measures used by other
companies. Although Broadcast Cash Flow and EBITDA, before non-cash stock
compensation expense, are not measures of performance calculated in accordance
with generally accepted accounting principles ("GAAP"), we believe that they are
useful to an investor in evaluating the Company because they are measures widely
used in the broadcast industry to evaluate a radio company's operating
performance. However, Broadcast Cash Flow and EBITDA, before non-cash stock
compensation expense, 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 GAAP, or as measures of
liquidity or profitability.

<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION ON
YEAR ENDED MAY 22, 1997 TO
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ---------------
<S> <C> <C>
Net revenues................................................ $ 98,787 $ 9,163
Station operating expenses excluding depreciation and
amortization.............................................. 72,154 7,147
Depreciation and amortization............................... 19,584 1,671
Corporate general and administrative expenses............... 5,607 1,276
Non-cash stock compensation expense......................... -- 1,689
--------- --------
Operating income (loss)..................................... 1,442 (2,620)
Net interest expense........................................ 13,178 837
Loss before extraordinary item.............................. (11,864) (3,578)
Extraordinary loss on early extinguishment of debt.......... 1,837 --
Preferred stock dividends and accretion of discount......... 13,591 274
Net loss attributable to common stockholders................ $ (27,292) $ (3,852)
Basic and diluted loss per common share..................... $ (1.70) $ (.31)
OTHER FINANCIAL DATA:
Broadcast Cash Flow......................................... $ 26,633 $ 2,016
EBITDA...................................................... 21,026 740
Net cash used in operating activities....................... (4,653) (1,887)
Net cash used in investing activities....................... (351,025) (95,100)
Net cash provided by financing activities................... 378,990 98,560
BALANCE SHEET DATA:
Total assets................................................ $ 517,631 $110,441
Long-term debt (including current portion).................. 222,767 42,801
Preferred stock subject to mandatory redemption............. 133,741 13,426
Stockholders' equity........................................ 125,135 49,976
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW

The following is a discussion of the key factors that have affected our
business over the past two years. The following information should be read in
conjunction with the consolidated financial statements and related

28
<PAGE> 29

notes thereto included elsewhere in this report. Unless otherwise indicated,
amounts set forth herein are expressed in thousands.

The terms "Broadcast Cash Flow" and "EBITDA, before non-cash stock
compensation expense," are used in various places in this report.

Broadcast Cash Flow consists of

- operating income (loss) before

-- depreciation,

-- amortization,

-- non-cash stock compensation expense and

-- corporate general and administrative expense.

EBITDA, before non-cash stock compensation expense, consists of:

-- operating income (loss) before

-- depreciation,

-- amortization and,

-- non-cash stock compensation expense.

RESULTS OF OPERATIONS

Management's discussion and analysis of results of operations for 1998 vs.
1997 have been presented on an as-reported basis. Additionally, for net revenue,
operating expenses, and operating income before depreciation and amortization we
have included Management's discussion and analysis of results on a pro forma
basis. The pro forma results for 1998 and 1997 assume all of the acquisitions
described in Item I, Part I of this report had occurred on January 1, 1997.

YEAR ENDED DECEMBER 31, 1998 VERSUS THE PERIOD FROM INCEPTION ON MAY 22, 1998
THROUGH DECEMBER 31, 1997.

The majority of the growth from 1997 to 1998 in "as reported" net revenue
($89,624), station operating expenses excluding depreciation and amortization
($65,007), and depreciation and amortization expense ($17,913), was due to the
following two factors: (i) the Company commenced operations on May 22, 1997, and
only began acquiring radio stations during the second half of 1997; and (ii)
there were additional revenues, station operating expenses excluding
depreciation and amortization, and depreciation and amortization expense
associated with the radio properties acquired during 1998. The tangible and
intangible assets associated with the above mentioned radio station acquisitions
account for the majority of the increase in the as reported depreciation and
amortization for 1998 over 1997. The increase in corporate general and
administrative expense ($4,331) is due directly to the investment in additional
corporate resources to effectively manage growth and the Company's growing radio
station portfolio. Interest expense, net of interest income during 1998
increased $12,341 as a result of the $160.0 million 10 3/8% Senior Subordinated
Notes

29
<PAGE> 30

offering that was completed on June 26, 1998 and the resulting greater average
outstanding long term debt levels that resulted from this offering and from the
aforementioned acquisitions.

Preferred stock dividends increased $13,317 as a result of the $125.0
million 13.75% Series A Cumulative Exchangeable Redeemable Preferred Stock Due
2009 offering that was completed on June 26, 1998. Additionally, on September
30, 1998, the Company recorded a one-time charge of $2,924 associated with the
accelerated accretion of discount on its 12% Class A Cumulative Preferred Stock
that was exchanged for the Series A Cumulative Exchangeable Redeemable Preferred
Stock.

On March 2, 1998, the Company recorded an extraordinary loss of $1,837
related to the write-off of previously capitalized debt issuance costs related
to its old credit facility. For 1998 the net loss attributable to common
stockholders (including an extraordinary loss of $1,837 and the one-time charge
of $2,924) was $27,292. Broadcast Cash Flow and EBITDA, before non-cash stock
compensation expense, for the twelve-month period ending December 31, 1998 were
$26,633 and $21,026, respectively. The growth in Broadcast Cash Flow from 1997
to 1998 is a direct result of the growth in net revenues, partially offset by
the growth in station operating expenses excluding depreciation and amortization
described above. The growth in EBITDA is also a result of the growth in net
revenues, offset partially by both the growth in station operation expenses
excluding depreciation and amortization described above, and the growth in
corporate general and administrative expense.

PRO FORMA -- YEAR ENDED DECEMBER 31, 1998 VERSUS THE YEAR ENDING DECEMBER 31,
1997.

The pro forma results for 1998 vs. 1997 presented below assume that the 195
radio stations owned or operated by the Company for any portion of 1998 were
acquired effective January 1, 1997.

<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
Net revenues.......................................... $131,099 $116,987
Station operating expenses excluding depreciation and
amortization........................................ 98,533 92,216
-------- --------
Operating income before depreciation and
amortization........................................ $ 32,566 $ 24,771
======== ========
</TABLE>

Net revenue for the year ended December 31, 1998 increased 12.1% to
$131,099. Station operating expenses excluding depreciation and amortization for
this twelve-month period increased 6.9% to $98,533. The majority of improvement
in pro forma net revenue from 1997 to 1998 is due to an improvement in the
utilization of advertising spot inventory at the station level during the
calendar year. The majority of the increase in pro forma station operating
expenses excluding depreciation and amortization is due to the increase in
programming, promotion and selling expenses associated with the increase in
revenue, and with the Company's operation of the radio stations subsequent to
the respective acquisition dates.

SEASONALITY

The Company expects that its operations and revenues will be seasonal in
nature, with generally lower revenue generated in the first quarter of the year
and generally higher revenue generated in the fourth quarter of the year. The
seasonality of the Company's business reflects the adult orientation of the
Company's formats and relationship between advertising purchases on these
formats with the retail cycle. This seasonality causes and will likely continue
to cause a variation in the Company's quarterly operating results. Such
variations could have an effect on the timing of the Company's cash flows.

YEAR 2000 COMPLIANCE

The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of our computer
programs or hardware that have date-sensitive software or embedded chips may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could cause

30
<PAGE> 31

a system failure or miscalculations in our broadcasting, and corporate locations
which could cause disruptions of operations, including, among other things, a
temporary inability to produce broadcast signals, process financial
transactions, or engage in other normal business activities.

Based on recent system evaluations, surveys, and on-site inventories, we
have determined that we will be required to modify or replace portions of our
software and certain hardware so that those systems will properly utilize dates
beyond December 31, 1999. We presently believe that with modifications or
replacements of existing software and certain hardware, the Year 2000 issue can
be mitigated. If such modifications and replacements are not made, or are not
completed in time, the Year 2000 issue could have a material impact on our
operations.

The Year 2000 issue involves the identification and assessment of the
existing problem, plan of remediation, as well as a testing and implementation
plan. To date, we have substantially completed the identification and assessment
process, with the following significant financial and operational components
identified as being affected by the Year 2000 issue:

- Computer hardware running critical financial and operational software
that is not capable of recognizing a four-digit code for the applicable
year.

- Our advertising inventory management software responsible for managing,
scheduling and billing customer's broadcasting purchases.

- Broadcasting studio equipment and software necessary to deliver radio
programming.

- Corporate financial accounting and information system software.

- Significant non-technical systems and equipment that may contain micro
controllers which are not Year 2000 compliant.

We have instituted the following remediation plan to address the Year 2000
issues:

A computer hardware replacement plan for computers running essential
broadcast, operational and financial software applications with Year 2000
compatible computers has been instituted.

As of December 31, 1998 approximately 68% of all essential computers
related to broadcast or studio equipment are Year 2000 compatible. Approximately
90% of all essential financial based computers are Year 2000 compliant. We
anticipate this replacement plan to be 100% complete by the end of the third
quarter in 1999.

Software upgrades or replacement with advertising inventory management
software which is Year 2000 compliant have been planned, are in process, or have
been completed as of December 31, 1998. We have received assurances from
substantially all of our software vendors that supply our advertising inventory
management software that their software is Year 2000 compliant. For
non-compliant vendors, we will install inventory management software from a
compliant vendor by the end of the third quarter of 1999. Approximately 70% of
the broadcasting properties have Year 2000 compliant advertising inventory
management software as of December 31, 1998.

We have received assurances from our software vendors that supply
broadcasting digital automation systems that the software used by us is
currently compliant or has upgrades currently available that are compliant.
Broadcast software and studio equipment is considered to be 80% compliant as of
December 31, 1998 and is anticipated to be 100% compliant by the third quarter
of 1999. Financial accounting software for the broadcasting segment has been
replaced and is Year 2000 compliant.

While we believe our efforts will provide reasonable assurance that
material disruptions will not occur due to internal failure, the possibility of
interruption still exists. We are currently querying other significant vendors
that do not share information systems with us (external agents). To date, we are
not aware of any external agent with a Year 2000 issue that would materially
impact our results of operations, liquidity, or capital resources. However, we
have no means of ensuring that external agents will be Year 2000 ready. The
inability of external agents to complete their Year 2000 resolution process in a
timely fashion could materially impact us. The effect of non-compliance by
external agents is not determinable.

31
<PAGE> 32

In the ordinary course of business, we have acquired or plan to acquire a
substantial amount of Year 2000 compliant hardware and software. These purchases
are part of specific operational and financial system enhancements with
completion dates during 1998 and early 1999 that were planned without specific
regard to the Year 2000 issue. These system enhancements resolve many Year 2000
problems and have not been delayed (or accelerated) as a result of any
additional efforts addressing the Year 2000 issue. Accordingly, these costs have
not been included as part of the costs of Year 2000 remediation. However, there
are several hardware and software expenditures that have been or will be
incurred to specifically remediate Year 2000 non-compliance. Incremental
hardware and software costs that we have attributed to the Year 2000 issue are
estimated to be less than $1,000,000. The majority of these expenditures will be
incurred over the first 9 months in 1999. Of this cost, approximately 10% will
be expensed as modification or upgrade costs with the remaining costs being
capitalized as new hardware or software. Sources of funds for these expenditures
will be supplied through cash flow generated from operations and/or available
borrowings from our Credit Facility.

Our accounting policy is to expense costs incurred due to maintenance,
modification or upgrade costs and to capitalize the cost of new hardware and
software. We believe we have an effective program in place to resolve the Year
2000 issue in a timely manner. As noted above, we have not yet completed all
necessary phases of the Year 2000 program. In the event that we do not complete
any additional phases, we could experience disruptions in its operations,
including among other things, a temporary inability to produce broadcast
signals, process financial transactions, or engage in similar normal business
activities. In addition, disruptions in the economy generally resulting from the
Year 2000 issues could also materially adversely affect us, such as one or more
advertising customers' inability to purchase advertising due to their
non-compliant hardware or software. We could be subject to litigation for
computer systems failures, equipment shutdowns or failure to properly date
business records. The amount of potential liability and lost revenue cannot be
reasonably estimated at this time. We currently have no contingency plans in
place in the event we do not complete all phases of the Year 2000 program. We
plan to evaluate the status of completion in May 1999 and determine whether such
contingency plans are necessary.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal need for funds has been to fund the acquisition of
radio stations, and to a lesser extent, working capital needs, capital
expenditures and interest and debt service payments. The Company's principal
sources of funds for these requirements have been cash flow from financing
activities, such as the proceeds from the offering of the Company's debt and
equity securities, and borrowings under credit agreements. The Company's
principal need for funds in the future are expected to include the need to fund
future acquisitions, interest and debt service payments, working capital needs,
and capital expenditures. The Company anticipates that its principal sources of
funds will continue to be borrowings under its Credit Facility and for the
fiscal year ending December 31, 1999, cash flows from operations.

Historical Acquisitions. During the year ended December 31, 1998, the
Company consummated fifty-six acquisitions across thirty-five markets having an
aggregate purchase price of $344.0 million. Additional acquisitions have been
subsequently completed in 1999 in six markets for an aggregate purchase price of
$23.0 million. The sources of funds for these acquisitions were primarily the
proceeds of the Company's credit facilities (see " Sources of Liquidity").

Pending Acquisitions. The aggregate purchase price of the pending
acquisitions is expected to be approximately $72 million, consisting almost
entirely of cash. We intend to finance the pending acquisitions with the
proceeds of our Credit Facility and cash flow from operations. We believe the
sources of capital available to us are adequate to finance the pending
acquisitions.

We expect to consummate most of our pending acquisitions during the second,
third and fourth quarters of 1999, although there can be no assurance that the
transactions will be consummated within that time frame. In five of the markets
in which there are pending acquisitions (Grand Junction, Colorado; Tallahassee,
Florida; Columbus-Starkville, Mississippi; Augusta, Georgia, and Wichita Falls,
Texas), petitions to deny or informal objections have been filed against the
Company's FCC assignment applications. All such petitions, objections and FCC
staff inquiries must be resolved before FCC approval can be obtained and the
acquisitions

32
<PAGE> 33

consummated. In addition, the Department of Justice is investigating pending
acquisitions in three markets (Grand Junction, CO; Tallahassee, FL; and
Montgomery, AL). There can be no assurance that the pending acquisitions will be
consummated. The ability of the Company to make future acquisitions in addition
to the pending acquisitions is dependent upon on the Company's ability to obtain
additional equity and/or debt financing. There can be no assurance that the
Company will be able to obtain such financing.

Sources of Liquidity. The Company financed its acquisitions primarily
through equity financing, proceeds from its debt and equity issuances
consummated in July 1998 and borrowings under its credit facilities.

In March 1998, the Company entered into a $190.0 million Credit Facility
with Lehman Brothers Inc., as arranger, and Lehman Commercial Paper Inc., as
lender, syndication agent and administrative agent pursuant to which the Company
has available a revolving line of credit of $110.0 million until March 2, 2006,
and an eight-year term loan facility of $80.0 million. The proceeds of the
borrowings under the credit facility were used to finance acquisitions and to
repay the Company's outstanding indebtedness under a prior credit facility. In
the first quarter of 1998, the Company recorded an extraordinary loss related to
the early termination of such prior credit facility of $1.8 million. The
Company's credit facility was amended in June, 1998, to provide for a revolving
credit line of $25.0 million until March 2, 2006 and two eight-year term loan
facilities which combined total $125.0 million.

The Company's obligations under its current credit facility are
collateralized by substantially all of its assets in which a security interest
may lawfully be granted (including, to the extent permitted by applicable law
and the rules of the FCC, any FCC licenses held by the Company's subsidiaries),
including, without limitation, intellectual property, real property, and all of
the capital stock of the Company's direct and indirect domestic subsidiaries and
65% of the capital stock of any foreign subsidiaries and are guaranteed by each
of the domestic subsidiaries of the Company. As of March 19, 1999, approximately
$77.5 million was outstanding under the credit facility.

Both revolving credit and term loan borrowings under our credit facility
bear interest, at the Company's option, at a rate equal to the Base Rate (as
defined under the terms of our credit facility, 7.75% as of December 31, 1998)
plus a margin ranging between 0.50% to 1.75%, or the Eurodollar Rate (as defined
under the terms of the credit facility, 4.75 % as of December 31, 1998) plus a
margin ranging between 1.50% to 2.75% (in each case dependent upon the leverage
ratio of the Company). A commitment fee calculated at a rate ranging from 0.50%
to 0.75% per annum (depending upon our leverage ratio) of the average daily
amount available under the revolving line of credit and the amount available
under the term loan facility is payable quarterly in arrears, and fees in
respect of letters of credit issued under our Credit Facility equal to the
lesser of (i) the interest rate margin then applicable to Eurodollar Rate loans
and (ii) 2.50% is also payable quarterly in arrears. At December 31, 1998 the
effective interest rate for amounts outstanding under the credit facility was
8.50%.

In addition, a fronting fee to be agreed to by the Company and the issuing
bank of such letter of credit calculated at a rate not to exceed 0.0125% per
annum on the maximum amount of each letter of credit is payable quarterly to the
issuing bank. The revolving credit and term loan borrowings are repayable in
quarterly installments beginning in 2000. The scheduled annual amortization of
the term loans is $2.0 million in each of the years 2000 through 2002, $10.0
million in 2003, $20.0 million in 2004, $69.0 million in 2005, and $20.0 million
at maturity. The scheduled annual reduction in availability under the revolving
credit loans is $7.5 million in each of the years 2003 through 2005, and $2.5
million at maturity in 2006. Certain mandatory prepayments of the term loan
facility and the revolving credit line and reductions in the availability of the
revolving credit line are required to be made, including:

- subject to certain exceptions, 100% of the net proceeds from any issuance
of capital stock in connection with an initial public offering or
incurrence of indebtedness;

- 100% of the net proceeds from certain asset sales; and

- between 50% and 75% (dependent on the leverage ratio of the Company) of
the excess cash flow of the Company.

33
<PAGE> 34

As of April 14, 1999 the Company was in negotiations with its existing
lender regarding a new credit facility. In connection with these negotiations
the existing credit facility was amended to modify certain restrictive financial
and operating covenants. The Company expects to have negotiations for a new
credit facility concluded by June 30, 1999.

The Company has issued $160.0 million in aggregate principal amount of
10 3/8% Senior Subordinated Notes (the "Notes") which have a maturity date of
July 1, 2008. The Notes are general unsecured obligations of the Company and are
subordinated in right of payment to all existing and future senior debt of the
Company (including obligations under its credit facility). Interest on the Notes
is payable semi-annually in arrears.

The Company has issued $125.0 million of 13 3/4% Series A Cumulative
Exchangeable Redeemable Preferred Stock Due 2009. The holders of the Series A
Preferred Stock are entitled to receive cumulative dividends at an annual rate
equal to 13 3/4% of the liquidation preference per share of Series A Preferred
Stock, payable quarterly, in arrears. On or before July 1, 2003, the Company
may, at its option, pay dividends in cash or in additional fully paid and
non-assessable shares of Series A Preferred Stock. After July 1, 2003, dividends
may only be paid in cash.

The shares of Series A Preferred Stock are subject to mandatory redemption
on July 1, 2009 at a price equal to 100% of the liquidation preference plus any
and all accrued and unpaid cumulative dividends. The Series A Preferred Stock
may be redeemed by the Company prior to such date under certain circumstances.

The Indenture and the Certificate of Designations limit the amount the
Company many borrow without regard to the other limitations on incurrence of
indebtedness contained therein under all credit facilities (including the Senior
Credit Facility) to $150.0 million. As of March 19, 1999, the Company would be
permitted, by the terms of the Indenture and the Certificate of Designation, to
incur $72.5 million of additional indebtedness under the Senior Credit Facility.

ACCOUNTING PRONOUNCEMENTS

As of January 1, 1998, we adopted Statement of Financial Accounting
Standards No. 130 "Reporting Comprehensive Income". Statement 130 establishes
standards for the reporting and display of comprehensive income and its
components. Comprehensive income is defined as the change in equity of a
business enterprise during a period from transactions and other events and
circumstances from nonowner sources, which are excluded from net income.
Statement 130 requires unrealized gains or losses on foreign currency
translation adjustments, which prior to adoption were reported separately in
shareholders' equity, to be included in comprehensive income. The adoption of
this Statement had no impact on our net income or stockholders' equity.

As of January 1, 1998, we adopted Statement of Financial Accounting
Standards No. 131 "Disclosures about Segments of an Enterprise and Related
Information". Statement 131 establishes new guidelines for identifying and
reporting information about an entity's operating segments. This standard
requires that management identify operating segments based upon the way
management disaggregates the enterprise for making internal operating decisions.
For the twelve months ending December 31, 1998, Company management has
maintained only one operating segment, radio broadcasting. Accordingly, Company
management does not believe that this statement has an impact on the Company's
financial statements.

In June 1998, the Financial Accounting Standards Board issued Statement No.
133, "Accounting for Derivative Instruments and Hedging Activities". Statement
133 standardizes the accounting for derivative instruments by requiring that an
entity recognize those items as assets or liabilities in the statement of
financial position and measure them at fair value. The Company has not engaged
in any derivative or hedging transactions. As a result, we do not anticipate
that the adoption of this new Statement will have a significant effect on our
earnings or financial position. Statement 133 is required to be adopted in years
beginning after June 15, 1999.

In April 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued SOP 98-5, "Accounting for the
Costs of Start Up Activities". SOP 98-5, effective
34
<PAGE> 35

for 1999, requires organization costs to be expensed as incurred. The Company
will write-off $362 in 1999 representing the balance of capitalized organization
costs at December 31, 1998.

SAFE HARBOR PROVISION OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report contains certain forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934 about us. Although we
believe that, in making any such statements, our expectations are based on
reasonable assumptions, any such statement may be influenced by factors that
could cause actual outcomes and results to be materially different from those
projected. When used in this document, the words "anticipates," "believes,"
"expects," "intends," and similar expressions, as they relate to us or our
management, are intended to identify such forward-looking statements. These
forward-looking statements are subject to numerous risks and uncertainties.

Important factors that could cause actual results to differ materially from
those in forward-looking statements, certain of which are beyond our control,
include:

- the impact of general economic conditions in the U.S. and in other
countries in which we currently do business;

- industry conditions, including competition;

- fluctuations in exchange rates and currency values;

- capital expenditure requirements;

- legislative or regulatory requirements;

- interest rates;

- taxes; and

- access to capital markets.

Our actual results, performance or achievements could differ materially
from those expressed in, or implied by, these forward-looking statements.
Accordingly, we cannot be certain that any of the events anticipated by the
forward-looking statements will occur or, if any of them do, what impact they
will have on us.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

INTEREST RATE RISK

At December 31, 1998, approximately 28% of the Company's long-term debt
bears interest at variable rates. Accordingly, the Company's earnings and after
tax cash flow are affected by changes in interest rates. Assuming the current
level of borrowings at variable rates and assuming a two percentage point change
in the 1998 average interest rate under these borrowings, it is estimated that
the Company's 1998 interest expense and net income would have changed by $1.3
million. In the event of an adverse change in interest rates, management would
likely take actions to further mitigate its exposure. However, due to the
uncertainty of the actions that would be taken and their possible effects,
additional analysis is not possible at this time. Further, such analysis would
not consider the effects of the change in the level of overall economic activity
that could exist in such an environment.

FOREIGN CURRENCY

As a result of the 1997 acquisition of Caribbean Communications Company
Ltd., ("CCC"), the Company has operations in 5 countries throughout the
English-speaking Eastern Caribbean. All foreign operations are measured in their
local currencies. As a result, the Company's financial results could be affected
by factors such as changes in foreign currency exchange rates or weak economic
conditions in the foreign markets in which the Company has operations.

35
<PAGE> 36

The Company maintains no derivative instruments to mitigate the exposure to
translation and/or transaction risk. However, this does not preclude the
adoption of specific hedging strategies in the future. Our foreign operations
reported a loss of $715,000 for the year ended December 31, 1998.

It is estimated that a 5% change in the value of the U.S. dollar to the
Eastern Caribbean dollar or the Trinidad and Tobago dollar would change net
income for the year ended December 31, 1998 by an amount less than $100,000.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The information in response to this item is included in the Company's
consolidated financial statements, together with the report thereon of
PricewaterhouseCoopers LLP, appearing on pages F-1 through F-25 of this Form
10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Not Applicable

PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

MANAGEMENT

The following table sets forth certain information with respect to the
directors and executive officers and managers of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION(S)
---- --- -----------
<S> <C> <C>
Richard W. Weening(1).................. 53 Executive Chairman, Treasurer and Director
Lewis W. Dickey, Jr.(1)................ 37 Executive Vice Chairman and Director
William M. Bungeroth(1)................ 52 President and Director
Richard J. Bonick, Jr.................. 47 Vice President and Chief Financial Officer
Terrence Baun.......................... 50 Director of Engineering
John Dickey............................ 31 Director of Programming
Terrence Leahy......................... 44 Secretary and General Counsel
Daniel O'Donnell....................... 38 Director of Corporate Finance
Mini Srivathsa......................... 29 Director of Technology
Jeffrey J. Roznowski................... 41 Vice President and General Manager -- Cumulus
Wireless Services
Robert H. Sheridan, III(2)(3).......... 36 Director
Ralph B. Everett(2)(3)................. 46 Director
</TABLE>

- -------------------------
(1) Member of the Executive Committee.

(2) Member of the Compensation Committee.

(3) Member of the Audit Committee.

RICHARD W. WEENING has served as Executive Chairman, Treasurer and Director
of the Company since March 1998. Mr. Weening served as Chairman of Cumulus from
its inception on May 22, 1997 until March 1998. Mr. Weening was a founder and an
initial investor in Cumulus Media, LLC through his ownership interest in CML
Holdings LLC ("CML"), an investment fund managed by QUAESTUS Management
Corporation, a private equity investment and advisory firm specializing in
information services and media and new media companies. QUAESTUS Management
Corporation was also a Managing Member of Cumulus Media, LLC. Mr. Weening served
as Chairman and Chief Executive Officer of Cumulus Media, LLC from its inception
in April 1997 until its dissolution in June 1998. Mr. Weening founded QUAESTUS

36
<PAGE> 37

Management Corporation in 1989 and served as Chairman and Chief Executive
Officer until March 1998. Mr. Weening has over 20 years experience as a chief
executive officer and investor in the information and media industry including,
text and reference book publishing and business magazine publishing, radio
broadcasting, interactive information services and electronic commerce software
and services. In 1985, Mr. Weening founded Caribbean Communications Company
Ltd., a radio broadcasting company acquired by the Company in May 1997. He
currently serves as a director of QUAESTUS Management Corporation and ARI
Network Services, Inc. He holds a Bachelor of Arts degree from St. John's
University.

LEWIS W. DICKEY, JR. has served as Executive Vice Chairman and Director of
the Company since March 1998. Mr. Dickey was a founder and an initial investor
in Cumulus Media, LLC through his interest in CML Holdings LLC and owns 75% of
the outstanding capital stock of DBBC of Georgia, LLC, a Managing Member of
Cumulus Media, LLC. He served as Executive Vice Chairman and a Director of
Cumulus Media, LLC from its inception in April 1997 until its dissolution in
June 1998. Mr. Dickey is the founder and was President of Stratford Research,
Inc. from September 1985 to March 1998 and owns 25% of the outstanding capital
stock of Stratford Research, Inc. Stratford Research, Inc. is a strategy
consulting and market research firm advising radio and television broadcasters
as well as other media related industries. From January 1988 until March 1998,
Mr. Dickey served as President and Chief Operating Officer of Midwestern
Broadcasting, which operated two stations in Toledo, Ohio that were acquired by
the Company in November 1997. He also has an ownership interest (along with
members of his family and Mr. Weening) in three stations in Nashville,
Tennessee: WQQK-FM, WNPL-FM and WVOL-AM. Mr. Dickey is a nationally regarded
consultant on radio strategy and the author of The Franchise -- Building Radio
Brands, published by the National Association of Broadcasters, one of the
industry's leading texts on competition and strategy. He holds Bachelor of Arts
and Master of Arts degree from Stanford University and a Master of Business
Administration degree from Harvard University. Mr. Dickey is the brother of John
Dickey.

WILLIAM M. BUNGEROTH has served as President and Director of Cumulus and
President and Chief Executive Officer of Cumulus Broadcasting, Inc. since the
companies began operations in May 1997. Mr. Bungeroth joined Cumulus from WPNT
Radio in Chicago where he was Vice President and General Manager of this
flagship property of Century Broadcasting Corp. Prior to joining Century
Broadcasting Corp. in 1992, he was President of Consulting Partners, which
specialized in improving the operations of radio stations in mid-size markets.
From August 1989 to July 1990, Mr. Bungeroth was Vice President of Major Market
Affiliations at Unistar Radio Networks. From August 1987 to August 1989, he was
President and Chief Operating Officer of Sunbelt Communications. From 1982 to
1987, he was Vice President of Sales and Operations at Century Broadcasting. He
holds a Bachelor of Arts degree from Lafayette College.

RICHARD J. BONICK, JR. has served as Vice President and Chief Financial
Officer of Cumulus since May 1997. Prior to joining Cumulus, Mr. Bonick had a
successful 20 year career with Century Broadcasting where he held various
financial and operating positions, most recently as Executive Vice President and
Chief Financial Officer. He began his career with Price Waterhouse in 1973. Mr.
Bonick is a Certified Public Accountant and holds a Bachelor of Arts degree from
the University of Dayton and a Master of Management degree in finance from the
Kellogg School at Northwestern University.

TERRENCE M. BAUN has served as Director of Engineering of the Company and
Vice President of Cumulus Broadcasting, Inc. since January 1998. Prior to
joining Cumulus, Mr. Baun was President of Criterion Broadcast Services, a
broadcast engineering technical support company serving clients in Wisconsin and
Illinois, from January 1988 to January 1998. Prior to January 1988 he was
Technical Director of Multimedia Broadcasting's Radio Division, and a Chief
Engineer at several Milwaukee stations. Mr. Baun is certified by the Society of
Broadcast Engineers ("SBE") as a Professional Broadcast Engineer and recently
concluded two years of service as SBE President. He is a 20-year member of the
Audio Engineering Society, and holds a Bachelor of Sciences degree from
Marquette University.

JOHN DICKEY has served as Director of Programming of the Company and Vice
President of Cumulus Broadcasting Inc. since March 1998. Mr. Dickey has served
as Executive Vice President of Stratford Research, Inc. since June 1988. He
served as Director of Programming for Midwestern Broadcasting from January 1990
to March 1998 and is a partner in both Stratford Research, Inc. as well as the
Nashville stations.

37
<PAGE> 38

Mr. Dickey also owns 25% of the outstanding capital stock of Stratford Research,
Inc. and 25% of the outstanding capital stock of DBBC of Georgia, LLC. Mr.
Dickey holds a Bachelor of Arts degree from Stanford University. Mr. Dickey is
the brother of Lewis W. Dickey, Jr.

TERRENCE J. LEAHY has served as Secretary and General Counsel of the
Company and Vice President of Cumulus Broadcasting, Inc. since March 1998. Prior
to March 1998, Mr. Leahy served Cumulus in the same capacity as a Managing
Director of QUAESTUS Management Corporation and Vice President of the Company.
Mr. Leahy began his career practicing media, telecommunications and corporate
law and litigation in Washington, D.C. with the law firms of Wilmer, Cutler &
Pickering and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. He joined QUAESTUS
Management Corporation in April 1992 and played a key role in the founding of
Cumulus Media, LLC. He is an honors graduate of Princeton University, Harvard
Law School, and the Executive MBA program at The Wharton School at the
University of Pennsylvania.

DANIEL O'DONNELL has served as Director of Corporate Finance of the Company
and Vice President of Cumulus Broadcasting, Inc. since March 1998. Prior to
joining Cumulus in March 1998, Mr. O'Donnell was a Senior Vice President in the
Corporate Finance Group of Heller Financial, Inc. Prior to joining Heller
Financial Inc.'s Corporate Finance Group in 1992, Mr. O'Donnell held a number of
offices within Heller Financial, Inc., including Vice President, Portfolio
Manager for the Corporate Finance Group's media portfolio, Vice President of
Heller's Corporate Asset Quality Group, and Vice President, Finance for Heller
International Corporation. Prior to joining Heller Financial, Inc., Mr.
O'Donnell was a manager and audit supervisor for Arthur Young & Company in the
Chicago office, which he joined in 1982. Mr. O'Donnell holds a Bachelor of Arts
degree in Accounting from Loyola University in Chicago, and is a Certified
Public Accountant.

MINI SRIVATHSA has served as Director of Technology of the Company and Vice
President of Cumulus Broadcasting, Inc. since March 1998. Prior to joining
Cumulus in January 1998, Ms. Srivathsa was a Senior Consultant for Keane, Inc.
from February 1997 to January 1998. From December 1993 to February 1997, she
served as a Systems Architect for ARI Network Services where she served as the
lead architect for an object-oriented, distributed nation-wide ordering system
and worldwide web-based search engine. From December 1992 to December 1993, Ms.
Srivathsa was a consultant in the Consultant Services Division at the University
of Wisconsin. Ms. Srivathsa has extensive experience in Internet-based
applications, object-oriented technologies and electronic commerce. She was Vice
President of the Wisconsin Java User Group and is a voting committee member of
the Internet Developers Association. She has also published several articles on
Internet technology. She holds a Bachelor of Science degree in Computer Science
from Bangalore University and a Masters of Science degree in Computer Science
from the University of Wisconsin.

JEFFREY J. ROZNOWSKI has served as Vice President and General Manager of
Cumulus Wireless Services, Inc. since December 1998. Prior to joining Cumulus,
Mr. Roznowski had a successful 18-year career with Ameritech where he held a
variety of engineering, financial, and operational positions, most recently
serving as Director of Operations for Ameritech Cellular. He is certified as a
Professional Engineer in the State of Wisconsin and serves on the faculty for
the University of Wisconsin's Department of Engineering Professional
Development. He holds a Bachelor of Science and Master of Business
Administration degree from the University of Wisconsin.

ROBERT H. SHERIDAN, III has served as a Director of the Company since July
1, 1998. Mr. Sheridan has served as a member of the Investment Committee of
Cumulus Media, LLC from April 1997 until its dissolution in June 1998. Mr.
Sheridan is a Managing Director of NationsBank Capital Investors, the principal
investment group within NationsBank Corporation, and a Senior Vice President of
NationsBanc Capital Corp., NationsBanc Investment Corporation and NationsBank,
N.A. NationsBanc Capital Corp. is a stockholder of the Company. Prior to joining
NationsBank Capital Investors in January 1994, Mr. Sheridan worked in the
corporate bank division of NationsBank Corporation and its predecessor from June
1989 to January 1994. Prior to joining NationsBank Corporation, Mr. Sheridan
worked in investment bank and capital markets positions at PaineWebber, Inc.
from 1986 to 1988. Mr. Sheridan holds a Bachelor of Arts degree from Vanderbilt
University and a Master of Business Administration from Columbia University. See
"Security Ownership of Certain Beneficial Owners and Management."

38
<PAGE> 39

RALPH B. EVERETT has served as a Director of the Company since July 1998.
Since 1989, Mr. Everett has been a partner with the Washington, D.C. office of
the law firm of Paul, Hastings, Janofsky & Walker LLP, where he heads the Firm's
Federal Legislative Practice Group. Prior to 1989, he was Chief Counsel and
Staff Director of the United States Senate Committee on Commerce, Science and
Transportation. He is a Director and a member of the Investment Committee of
Shenandoah Life Insurance Company. He is also a member of the Board of Visitors
of Duke University Law School and the Norfolk Southern Corporation Advisory
Board. Mr. Everett holds a Bachelor of Arts degree from Morehouse College and a
Juris Doctor degree from Duke University.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference to the
information set forth under the caption "Executive Compensation" in our
Definitive Proxy Statement, expected to be filed within 120 days of our fiscal
year end.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS & MANAGEMENT

The following table lists information concerning the beneficial ownership
of the Common Stock of Cumulus Media Inc. on March 19, 1999 by (i) each director
and executive officer of Cumulus Media Inc. and their affiliates, (ii) all
directors and executive officers as a group, and (iii) each person known to the
Company to own beneficially more than 5% of the Common Stock of Cumulus Media
Inc.

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
COMMON STOCK COMMON STOCK(1) COMMON STOCK(2)
---------------------- ---------------------- ----------------------
NUMBER OF NUMBER OF NUMBER OF
NAME OF STOCKHOLDER SHARES PERCENTAGE SHARES PERCENTAGE SHARES PERCENTAGE
- ------------------- --------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard W. Weening................... 1,000 * -- --
QUAESTUS Management Corporation(3)... 1,000 * -- -- 437,313 18.40%
CML Holdings, LLC.................... 101,100 1.16% -- -- 1,647,422 69.33%
QUAESTUS Partner Fund................ 35,000 * -- -- -- --
Lewis W. Dickey, Jr. ................ 149,740 1.72% -- -- -- --
DBBC of Georgia, LLC(3).............. -- -- -- -- 291,542 12.27%
William M. Bungeroth(4).............. 88,466 1.02% -- -- -- --
Richard J. Bonick, Jr.(4)............ 88,466 1.02% -- -- -- --
John Dickey.......................... -- -- -- -- -- --
NationsBanc Capital Investors........ -- -- 3,371,246 38.9% -- --
State of Wisconsin Investment
Board.............................. -- -- 3,791,619 43.8% -- --
Heller Equity Capital Corporation.... 125,000 1.44% 803,823 9.3% -- --
The Northwestern Mutual Life Ins.
Co. ............................... -- -- 693,728 8.0% -- --
Putnam Investment Management......... 931,300 10.70% -- -- -- --
J & W Seligman & Co. ................ 824,415 9.48% -- -- -- --
Franklin Advisers, Inc. ............. 785,000 9.02% -- -- -- --
MacKay-Shields Financial Advisors.... 600,000 6.90% -- -- -- --
Mentor Investment Advisors........... 522,100 6.00%
Robert H. Sheridan, III(5)........... -- -- -- -- -- --
Ralph B. Everett(5).................. -- -- -- -- -- --
All Directors & Executive Officers as
a group............................ 464,772 5.34% -- -- 2,376,277 100.00%
</TABLE>

- -------------------------
* Indicates less than one percent

(1) Except upon the occurrence of certain events, holders of Class B Common
Stock are not entitled to vote, whereas each share of Class A Common Stock
entitles its holders to one vote and subject to certain exceptions, each
share of Class C Common Stock entitles its holders to ten votes. Under
certain

39
<PAGE> 40

conditions and subject to prior governmental approval, shares of Class B
Common Stock are convertible into shares of Class A Common Stock and/or
Class C Common Stock.

(2) Subject to certain exceptions, each share of Class C Common Stock entitles
its holders to ten votes. Under certain conditions and subject to prior
governmental approval, shares of Class C Common Stock are convertible into
shares of Class A Common Stock.

(3) Represents beneficial ownership attributable to Messrs. Weening and Dickey
as a result of their controlling interests in QUAESTUS and DBBC
respectively. Does not include options to purchase 1,000,690 shares of Class
C Common Stock granted to each of Messrs. Weening and Dickey under the
Executive Plan.

(4) Does not include options to purchase 235,000 and 30,620 shares of Class A
Common Stock granted to Messrs. Bungeroth and Bonick, respectively, under
the 1998 Plan.

(5) Does not include options to purchase 30,000 shares of Class A Common Stock
granted to each of Messrs. Sheridan and Everett upon their election to Board
of Directors.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

MANAGEMENT SERVICES AGREEMENTS

Lewis W. Dickey, Jr. and John Dickey each have a 25% ownership interest in
Stratford Research, Inc., an entity that provides programming and marketing
consulting and market research services to the Company. Under an agreement with
Stratford Research, Inc., Stratford Research, Inc. receives $25 to evaluate
programming at target radio stations. Annual strategic studies cost the Company
a minimum of $25 negotiable depending on competitive market conditions.
Additionally, Stratford Research, Inc. will provide program-consulting services
for contractually specified amounts over the three years of the agreement. Total
fees paid to Stratford Research by the Company during 1998 and 1997 were $2,735
and $184, respectively.

QUAESTUS Management Corporation, an entity controlled by Mr. Weening,
provides industry research, market support and due diligence support services,
and transaction management for the Company's acquisitions and provides certain
corporate finance and related services in support of the Company's treasury
function. During 1998 and 1997, the Company paid QUAESTUS Management Corporation
$1,423 and $297 respectively for acquisition and corporate finance services.
Under an agreement with QUAESTUS Management Corporation, QUAESTUS Management
Corporation receives a specified rate per transaction between $15 and $60
depending on the number of FM stations acquired in the transaction, and
conditioned on consummation of those transactions. In addition, the Company is
obligated to reimburse QUAESTUS Management Corporation for all of its expenses
incurred in connection with the performance of services under such agreement.

The Company also paid to Cumulus Media, LLC fees in 1998 and 1997
consisting of (i) a non-recurring organizational fee of $300 in 1997 (with
QUAESTUS Management Corporation receiving $180 of such fee and DBBC of Georgia,
LLC, receiving $120 of such fee) and (ii) management fees of $150 and $206 (with
QUAESTUS Management Corporation receiving $90 and $123 respectively, of such
fees from Cumulus Media, LLC and DBBC of Georgia, LLC, receiving $60 and $834
respectively, of such fees from Cumulus Media, LLC). The fees paid to Cumulus
Media, LLC have terminated. Lewis W. Dickey, Jr. and John Dickey have a 75% and
25% ownership interest in DBBC of Georgia LLC, respectively.

One of the Company's Directors is Mr. Ralph B. Everett. Mr. Everett is a
partner with the Washington, D.C. office of the law firm of Paul, Hastings,
Janofsky & Walker LLP, where he heads the Firm's Federal Legislative Practice
Group. The Company also engages the law firm of Paul, Hastings, Janofsky &
Walker LLP on numerous matters dealing with compliance with federal regulations
and corporate finance activities. Total expenses paid to Paul, Hastings,
Janofsky & Walker LLP during fiscal 1998 and 1997 were approximately $1,190 and
$0. Of these expenses paid in 1998 and 1997, $1,131 and $0 were capitalized as
acquisition or financing costs. The remaining expenses have been included as
part of the corporate general and administrative expenses in the statement of
operations. At December 31, 1998 and 1997 amounts payable to Paul, Hastings,
Janofsky & Walker LLP were approximately $642 and $22.

40
<PAGE> 41

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8K

<TABLE>
<S> <C> <C>
(a) 1. Financial Statements
Financial Statement Schedule
The Financial Statements and Financial Statement Schedule
listed in the index to Consolidated Financial Statements of
Cumulus Media Inc. that appear on page F1 of this Report on
Form 10-K are filed as a part of this Report.
2.
Exhibits
3.
The exhibits to this Report on Form 10-K are listed under
item 14(c) below.
(b) Not Applicable
(c) Exhibits:
</TABLE>

<TABLE>
<CAPTION>
NO. DESCRIPTION OF EXHIBIT
--- ----------------------
<C> <S>
2.1* Local Programming and Marketing Agreement dated December 17,
1997 between Cumulus Broadcasting, Inc. and New Frontier
Communications, Inc.
2.2* Local Programming and Marketing Agreement dated January
1,1998 between Cumulus Broadcasting, Inc. and Westwind
Broadcasting, Inc.
2.3* Local Marketing Agreement dated February 10, 1998 between
Cumulus Broadcasting, Inc. and Wiskes/Abaris Communications
KQIZ Partnership.
2.4* Time Brokerage Agreement dated December 15, 1997 between
Cumulus Broadcasting, Inc. and Clearly Superior Radio, LLC.
2.5* Local Marketing Agreement dated February 16, 1998 between
Cumulus Broadcasting, Inc. and Lyle Evans d/b/a Brillion
Radio Company.
2.6* Program Service and Time Brokerage Agreement dated October
31, 1997 between Cumulus Broadcasting, Inc. and Tallahassee
Broadcasting Company.
2.7* Local Marketing Agreement dated January 14, 1998 between
Cumulus Broadcasting, Inc. and Savannah Communications LP.
2.8* Local Programming and Marketing Agreement dated December 23,
1997 between Cumulus Broadcasting, Inc. and Lewis
Broadcasting Corporation.
2.9* Local Marketing Agreement dated February 16, 1998 between
Cumulus Broadcasting, Inc. and Jon A. LeDue.
2.10* Program Services and Time Brokerage Agreement dated February
12, 1998 between Cumulus Broadcasting, Inc. and Pamplico
Broadcasting, LP.
2.11* Asset Purchase Agreement dated December 1, 1997 among
Cumulus Broadcasting, Inc., Cumulus licensing Corporation
and West Jewell Management, Inc.
2.12* Asset Purchase Agreement dated October 30, 1997 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation,
and KIKR Inc.
2.13* Asset Purchase Agreement dated December 5, 1997 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation,
and Wiskes/Abaris Communications KQIZ Partnership
2.14* Asset Purchase Agreement dated January 30, 1998 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation,
Pacific Broadcasting of Beaumont, Inc., Beaumont Skyware
Inc., and Richard Dames.
2.15* Asset Purchase Agreement dated December 30, 1997 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation,
and Sovereign Communications Corporation.
</TABLE>

41
<PAGE> 42

<TABLE>
<CAPTION>
NO. DESCRIPTION OF EXHIBIT
--- ----------------------
<C> <S>
2.16* Asset Purchase Agreement dated December 19, 1997 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation,
Tryon-Seacoast Communications, Inc., Seacoast Broadcasting,
Inc., and Kennebec-Tryon Communications Corp.
2.17* Asset Purchase Agreement dated February 18, 1998 among
Cumulus Broadcasting, Inc. Cumulus Licensing Corporation,
and George H. Buck, Jr. d/b/a WHSC Radio.
2.18* Asset Purchase Agreement dated February 12, 1998 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation
and Pamplico Broadcasting, LP.
2.19* Asset Purchase Agreement dated October 8, 1997 among Cumulus
Broadcasting Inc., Cumulus Licensing Corporation, Connor FM
Broadcasting Co., Connor Broadcasting Corp., J. Parker
Connor and Susan C. Connor.
2.20* Stock Purchase Agreement dated December 17, 1997 among
Cumulus Holdings, Inc., Tommy R. Vascocu, Elizabeth L.
Young, Michael L. Owens, Alan Owens, Robert Podolsky, Larry
Daniels, Sonja Erskine, and Jeffrey D. Erskine.
2.21* Stock Purchase Agreement dated February 17, 1998 among
Cumulus Holdings, Inc. and John M. Borders, Don L. Turner,
Jerry Goos and Kan-D Land, Inc.
2.22* Asset Purchase Agreement dated December 15, 1997 among
Cumulus Broadcasting Inc., Cumulus Licensing Corporation,
Clearly Superior Radio. L.L.C., 3-D Communications
Corporation and Dennis F. Doelitzsch.
2.23* Asset Purchase Agreement dated February 12, 1998 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation
and Lyle R. Evans d/b/a Brillion Radio Company.
2.24* Asset Purchase Agreement dated January 14, 1998 among
Cumulus Broadcasting Inc., Cumulus Licensing Corporation and
Savannah Communications, LP.
2.25* Asset Purchase Agreement dated December 23, 1997 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation
and Lewis Broadcasting Corporation.
2.26* Asset Purchase Agreement dated February 12, 1998 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation,
Jon A. LeDue and American Communications Company, Inc.
2.27* Asset Purchase Agreement dated January 27,1998 among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation, Lesnick
Communications, Inc. and Mrs. Betty Carey.
2.28* Asset Purchase Agreement dated October 29, 1997 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation,
Big Country Broadcasting, Inc., and Tye Broadcasting, Inc.
2.29* Asset Purchase Agreement dated October 29, 1997 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation
and Arbor Radio, LP.
2.30* Asset Purchase Agreement dated March 5, 1997 between Wilks
Broadcasting Acquisitions, Inc. and Cumulus Media, LLC.
2.31* Asset Purchase Agreement dated August 15, 1997 among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation and M & M
Partners.
2.32* Stock Purchase Agreement dated October 16, 1997 between
Cumulus Holdings, Inc. and Philip T. Kelly.
2.33* Stock Purchase Agreement dated November 7, 1997 between
Cumulus Holdings, Inc. and James Maurer.
2.34* Asset Purchase Agreement dated October 29, 1997 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation,
Carolina Broadcasting, Inc., and Georgetown Radio, Inc.
2.35* Asset Purchase Agreement dated October 9, 1997 among
Seacoast Radio Company, LLC., Cumulus Broadcasting, Inc. and
Cumulus Licensing Corporation.
2.36* Asset Purchase Agreement dated October 9, 1997 among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation and Sunny
Broadcasters, Inc.
</TABLE>

42
<PAGE> 43

<TABLE>
<CAPTION>
NO. DESCRIPTION OF EXHIBIT
--- ----------------------
<C> <S>
2.37* Asset Purchase Agreement dated June 26, 1997 among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation, Venice
Michel and Venice Broadcasting Corporation.
2.38* Agreement of Sale dated September 4, 1997 among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation and
Medical College of Georgia Foundation.
2.39* Program Service and Time Brokerage Agreement dated August
18, 1997 between Cumulus Broadcasting, Inc. and Tally Radio,
LLC.
2.40* Asset Purchase Agreement dated August 18, 1997 among Tally
Radio, LLC and Cumulus Broadcasting, Inc. and Cumulus
Licensing Corporation.
2.41* Asset Purchase Agreement dated August 18, 1997 among HVS
Partners and Cumulus Broadcasting, Inc. and Cumulus
Licensing Corporation.
2.42* Asset Purchase Agreement dated August 25, 1997 among HVS
Partners and Cumulus Broadcasting, Inc. and Cumulus
Licensing Corporation.
2.43* Letter Agreement dated January 16, 1998 between Benchmark
Radio Acquisition Fund IV Limited Partnership, Cumulus
Broadcasting, Inc. and Cumulus Licensing Corp.
2.44* WZNY Agreement of Sale dated September 4, 1997 among George
G. Weiss and Cumulus Broadcasting, Inc. and Cumulus
Licensing Corporation.
2.45* Asset Purchase Agreement dated May 1, 1997 between HVS
Partners and Cumulus Media, LLC.
2.46* Asset Purchase Agreement dated April 30, 1997 among Hara
Broadcasting, Inc. and DLM Communications, Inc. and Cumulus
Media, LLC.
2.47* Asset Purchase Agreement dated June 24, 1997 among 62nd
Street Broadcasting of Toledo, LLC, 62nd Street Broadcasting
of Toledo License, LLC, 62nd Street Broadcasting, LLC,
Cumulus Broadcasting, Inc. and Cumulus Licensing
Corporation.
2.48* Local Marketing Agreement dated February 15, 1998 among
Cumulus Broadcasting, Inc., Pacific Broadcasting of
Beaumont, Inc., and Beaumont Skyware Inc.
2.49* Local Marketing Agreement dated December 31, 1997 between
Cumulus Broadcasting, Inc. and Sovereign Communications
Corporation and Madison Radio Group Inc.
2.50* Asset Purchase Agreement dated March 23, 1998 among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation and
Communications Corporation.
2.51* Purchase Agreement dated November 20, 1996 between IQ Radio,
Inc. and Taylor Country Broadcasting, Inc.
2.52* Assignment and Assumption Agreement dated January 20, 1998
among Taylor Country Broadcasting, Inc., Cumulus Licensing
Corp. and Cumulus Broadcasting, Inc.
2.53* Asset Purchase Agreement dated January 2, 1997 among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation and
Westwind Broadcasting Inc.
2.54* Asset Purchase Agreement dated March 16, 1998 among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation and P and
T Broadcasting, Inc.
2.55* Asset Purchase Agreement dated March 1998 among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation and
Crystal Radio Group, Inc.
2.56* Asset Purchase Agreement dated March 1998 among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation and
Ocmulgee Broadcasting Co., Inc.
2.57* Local Marketing Agreement dated March 16, 1998 between
Cumulus Broadcasting, Inc. and Phoenix Broadcast Partners,
Inc.
2.58* Asset Purchase Agreement dated February 1997 between Cumulus
Media, LLC and Value Radio Corporation
(WVBO-FM/WOSH-FM/WOGB-FM).
</TABLE>

43
<PAGE> 44

<TABLE>
<CAPTION>
NO. DESCRIPTION OF EXHIBIT
--- ----------------------
<C> <S>
2.59* Asset Purchase Agreement dated February 1997 between Cumulus
Media, LLC and Value Radio Corporation (WUSW-FM/WNAM-AM).
2.60* Asset Purchase Agreement dated February 26, 1998 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation
and Mustang Broadcasting Company.
2.61* Asset Purchase Agreement dated March 1998 among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation, Robert
Brooks d/b/a Brooks Broadcasting Company and K-Country, Inc.
2.62* Asset Purchase Agreement dated March 24, 1998 among WSEA,
Inc., Cumulus Broadcasting, Inc., and Cumulus Licensing
Corporation.
2.63* Asset Purchase Agreement dated March 30, 1998 among Cumulus
Broadcasting Inc., Cumulus Licensing Corporation and
Mountain Wireless, Inc.
2.64* Asset Purchase Agreement dated February 5, 1998 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation
and Castle Broadcasting Limited Partnership.
2.65* Asset Purchase Agreement dated March 5, 1998 among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation, Missouri
River Broadcasting, Inc. and JKJ Broadcasting, Inc.
2.66* Asset Purchase Agreement dated March 11, 1998 among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation and
Clarendon Country Broadcasting, Co., Inc.
2.67* Asset Purchase Agreement dated April 1998, among Cumulus
Broadcasting, Inc., Cumulus Licensing Corporation, and
Phoenix Broadcast Partners, Inc.
2.68* Stock Purchase Agreement dated January 9, 1998 between
Cumulus Holdings, Inc. and Robert Lowder.
2.69* Asset Purchase Agreement dated February 19, 1997 among
Cumulus Broadcasting, Inc., Cumulus Licensing Corporation,
James Ingstad Broadcasting, Inc., Hometown Wireless, Inc.,
Radio Iowa Broadcasting, Inc. and Ingstad Mankato, Inc.
3.1* Articles of Incorporation of Cumulus Media Inc.
3.2* Forum of Amended and Restated Articles of Incorporation of
Cumulus Media Inc.
3.3* Bylaws of Cumulus Media Inc.
3.4* Form of Amended and Restated Bylaws of Cumulus Media Inc.
3.5* Form of Certificate of Designation with respect to Series A
Cumulative Exchangeable Redeemable Preferred Stock Due 2009.
3.6* Articles of Incorporation of Forjay Broadcasting
Corporation.
3.7* Bylaws of Forjay Broadcasting Corporation.
3.8* Articles of Incorporation of Minority Radio Associates, Inc.
3.9* Bylaws of Minority Radio Associates, Inc.
3.10* Memorandum of Association of GEM Radio Five Ltd.
3.11* Articles of Association of GEM Radio Five Ltd.
3.12* Memorandum of Association of Caribbean Communications
Company Limited.
3.13* Articles of Association of Caribbean Communications Company
Limited.
3.14* Articles of Incorporation of Forjay Licensing Corp.
3.15* Bylaws of Forjay Licensing Corp.
3.16* Articles of Incorporation of MRA Licensing Corp.
3.17* Bylaws of MRA Licensing Corp.
3.18* Articles of Incorporation of Cumulus Broadcasting, Inc.
3.19* Bylaws of Cumulus Broadcasting, Inc.
3.20* Articles of Incorporation of Cumulus Licensing Corp.
</TABLE>

44
<PAGE> 45

<TABLE>
<CAPTION>
NO. DESCRIPTION OF EXHIBIT
--- ----------------------
<C> <S>
3.21* Bylaws of Cumulus Licensing Corp.
3.22* Form of Class A Common Stock Certificate.
3.23* Form of Series A Preferred Stock Certificate.
10.1* Credit Facility dated March 2, 1998 among Cumulus Media
Inc., Lehman Brothers Inc. and Lehman Commercial Paper Inc.
10.2* First Amendment, dated May 1, 1998, to the Credit Facility
among Cumulus Media Inc., Lehman Brothers Inc. and Lehman
Commercial Paper.
10.3* Second Amendment dated June 24, 1998, to the Credit Facility
among Cumulus Media Inc., Lehman Brothers Inc. and Lehman
Commercial Paper.
10.4* Form of Indenture dated 1998 between Cumulus
Media Inc. and Firstar Bank of Minnesota, N.A., as Trustee
10.5* Form of Exchange Debenture Indenture, dated ,
1998 between Cumulus Media Inc. and U.S. Bank Trust National
Association, as Trustee
10.6* Form of Employment Agreement between Cumulus Media Inc. and
Richard W. Weening
10.7* Form of Employment Agreement between Cumulus Media Inc. and
Lewis W. Dickey, Jr.
10.8* Employment Agreement between Cumulus Media Inc. and William
M. Bungeroth
10.9* Employment Agreement between Cumulus Media Inc. and Richard
J. Bonick, Jr.
10.10* Form of Cumulus Media Inc. 1998 Employee Stock Incentive
Plan
10.11* Form of Cumulus Media Inc. 1998 Executive Stock Incentive
Plan
10.12* Services Agreement dated May 1, 1998 by and between QUAESTUS
Management Corporation and Cumulus Media Inc.
10.13* Services Agreement dated March 23, 1998 between Stratford
Research, Inc. and Cumulus Media Inc.
12.1** Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividend Requirements
21.1* Subsidiaries of the Company
23.1** Consent of PricewaterhouseCoopers LLP
24.1* Powers of Attorney, included on page 11.6
27.1** Financial Data Schedule
99.1* Affidavit to dispense with consent of certain directors
</TABLE>

- -------------------------
* Incorporated by reference to the Form S-1 Registration Statement declared
effective on June 26, 1998

** Filed herewith

45
<PAGE> 46

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 14th day of
April, 1999.

CUMULUS MEDIA INC.

By /s/ RICHARD J. BONICK, JR.

------------------------------------
Richard J. Bonick, Jr.
Vice President and Chief Financial
Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RICHARD W. WEENING Executive Chairman and Treasurer April 14, 1999
- ------------------------------------------ (Principal Executive Officer)
Richard W. Weening

/s/ LEWIS W. DICKEY, JR. Executive Vice Chairman April 14, 1999
- ------------------------------------------
Lewis W. Dickey, Jr.

/s/ WILLIAM M. BUNGEROTH President April 14, 1999
- ------------------------------------------
William M. Bungeroth

/s/ RICHARD J. BONICK, JR. Vice President and Chief Financial April 14, 1999
- ------------------------------------------ Officer (Principal Financial Officer)
Richard J. Bonick, Jr.

/s/ ROBERT H. SHERIDAN, III Director April 14, 1999
- ------------------------------------------
Robert H. Sheridan, III

/s/ RALPH E. EVERETT Director April 14, 1999
- ------------------------------------------
Ralph E. Everett
</TABLE>

TO BE DELIVERED FROM THE PRINTERS

46
<PAGE> 47

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
((ITEM 14 (A)(1) AND (2))

CUMULUS MEDIA INC.

<TABLE>
<CAPTION>
PAGE IN THIS
REPORT
------------
<S> <C>
(1) Financial Statements
Report of Independent Accountants........................... F-2
Consolidated Balance Sheets at December 31, 1998 and 1997... F-3
Consolidated Statements of Operations for the fiscal year
ended December 31, 1998 and for the period from inception
on May 22, 1997 to December 31, 1997...................... F-4
Consolidated Statements of Stockholders' Equity for the
fiscal year ended December 31, 1998 and for the period
from inception on May 22, 1997 to December 31, 1997....... F-5
Consolidated Statements of Cash Flows for the fiscal year
ended December 31, 1998 and for the period from inception
on May 22, 1997 to December 31, 1997...................... F-6
Notes to Consolidated Financial Statements.................. F-7
(2) Financial Statement Schedule
Schedule II: Valuation and Qualifying Accounts.............. F-24
</TABLE>

F-1
<PAGE> 48

REPORT OF INDEPENDENT ACCOUNTANTS

TO THE STOCKHOLDERS OF CUMULUS MEDIA INC.

In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) on page F-1 present fairly, in all material
respects, the financial position of Cumulus Media Inc. and subsidiaries at
December 31, 1998 and 1997, and the results of their operations and their cash
flows for the year ended December 31, 1998 and for the period from May 22, 1997
(inception) through December 31, 1997 in conformity with generally accepted
accounting principles. In addition, in our opinion, the financial statement
schedule listed in the index appearing under Item 14(a)(2) on page F-1 presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. These financial
statements and financial statement schedule are the responsibility of the
Company's management; our responsibility is to express an opinion on these
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois
April 14, 1999

F-2
<PAGE> 49

CUMULUS MEDIA INC.

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT FOR SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents................................. $ 24,885 $ 1,573
Accounts receivable, less allowance for doubtful accounts
of $895 and $125 respectively.......................... 28,056 5,241
Prepaid expenses and other current assets................. 2,808 288
-------- --------
Total current assets................................... 55,749 7,102
Property and equipment, net................................. 41,438 8,120
Intangible assets, net...................................... 404,220 90,217
Other assets................................................ 16,224 5,002
-------- --------
Total assets........................................... $517,631 $110,441
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses..................... $ 19,028 $ 3,643
Current portion of long-term debt......................... 20 12
Other current liabilities................................. 768 195
-------- --------
Total current liabilities.............................. $ 19,816 $ 3,850
Long-term debt.............................................. 222,747 42,789
Other liabilities........................................... 1,118 400
Deferred income taxes....................................... 15,074 --
-------- --------
Total liabilities...................................... 258,755 47,039
-------- --------
Preferred stock subject to mandatory redemption, stated
value $10,000 per share, 12,000 shares authorized, 0 and
1,625 shares outstanding.................................. -- 13,426
Series A Cumulative Exchangeable Redeemable Preferred Stock
due 2009, stated value $1,000 per share, 129,286 and 0
shares issued and outstanding, respectively............... 133,741 --
Commitments and Contingencies (Note 10)
Stockholders' equity:
Class A common stock, par value $.01 per share; 50,000,000
shares authorized; 8,700,504 and 0 shares issued and
outstanding............................................ 87 --
Class B common stock, par value $.01 per share; 20,000,000
shares authorized; 8,660,416 and 0 shares issued and
outstanding............................................ 87 --
Class C common stock, par value $.01 per share; 30,000,000
shares authorized; 2,376,277 and 0 shares issued and
outstanding............................................ 24 --
Common stock, $.01 par value; authorized 10,000 shares; 0
and 1,000 shares issued and outstanding,
respectively........................................... -- --
Additional paid-in-capital................................ 142,211 53,549
Accumulated other comprehensive income.................... 5 5
Accumulated deficit....................................... (17,279) (3,578)
-------- --------
Total stockholders' equity.................................. 125,135 49,976
-------- --------
Total liabilities and stockholders' equity................ $517,631 $110,441
======== ========
</TABLE>

See Accompanying Notes to Consolidated Financial Statement

F-3
<PAGE> 50

CUMULUS MEDIA INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT FOR SHARE DATA)

<TABLE>
<CAPTION>
FROM THE PERIOD
FROM INCEPTION ON
YEAR ENDED MAY 22, 1997 TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
Revenues.................................................... $108,172 $10,134
Less: agency commissions.................................... (9,385) (971)
-------- -------
Net Revenues.............................................. 98,787 9,163
Operating expenses:
Station operating expenses, excluding depreciation and
amortization.............................................. 72,154 7,147
Depreciation and amortization............................... 19,584 1,671
Corporate general and administrative expenses............... 5,607 1,276
Non-cash stock compensation................................. -- 1,689
-------- -------
Operating expenses.......................................... 97,345 11,783
Operating income (loss)..................................... 1,442 (2,620)
-------- -------
Nonoperating income (expense):
Interest expense............................................ (15,551) (992)
Interest income............................................. 2,373 155
Other income (expense), net............................ (2) (54)
-------- -------
Nonoperating expenses, net.................................. (13,180) (891)
-------- -------
Loss before income taxes.................................... (11,738) (3,511)
Income tax expense.......................................... 126 67
-------- -------
Loss before extraordinary item.............................. (11,864) (3,578)
Extraordinary loss on early extinguishment of debt.......... (1,837) --
-------- -------
Net loss.................................................... (13,701) (3,578)
Preferred stock dividend and accretion of discount.......... 13,591 274
-------- -------
Net loss attributable to common stockholders................ (27,292) (3,852)
======== =======
Basic and diluted loss per share............................ $ (1.70) $ (.31)
======== =======
Average shares outstanding.................................. 16,085 12,509
======== =======
</TABLE>

See Accompanying Notes to Consolidated Financial Statements

F-4
<PAGE> 51

CUMULUS MEDIA, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT FOR SHARE DATA)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
COMMON STOCK COMMON STOCK COMMON STOCK COMMON STOCK
----------------- ----------------- ----------------- ----------------- ADDITIONAL
NUMBER OF PAR NUMBER OF PAR NUMBER OF PAR NUMBER OF PAR PAID-IN
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE CAPITAL
--------- ----- --------- ----- --------- ----- --------- ----- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of common stock............ 1,000 -- -- $-- -- $-- -- $-- $ 52,748
Comprehensive income (cumulative
translation adjustment)........... -- -- -- -- -- -- -- -- --
Preferred and common stock offering
costs............................. -- -- -- -- -- -- -- -- (614)
Preferred stock dividend and
accretion of discount............. -- -- -- -- -- -- -- -- (274)
Non-cash stock compensation......... -- -- -- -- -- -- -- -- 1,689
Net loss............................ -- -- -- -- -- -- -- -- --
------ --- --------- --- --------- --- --------- --- --------
Balance at December 31, 1997........ 1,000 -- -- -- -- -- -- -- 53,549
====== === ========= === ========= === ========= === ========
Capital Contribution................ -- -- -- -- -- -- -- -- 15,211
Preferred stock dividend and
accretion of discount............. -- -- -- -- -- -- -- -- (13,591)
Reorganization concurrent with
IPO............................... (1,000) -- 1,346,932 14 8,785,416 88 2,376,277 24 --
Proceeds from IPO................... -- -- 7,228,572 72 -- -- -- 101,003
Preferred and common stock offering
costs............................. -- -- -- -- -- -- -- -- (13,961)
Share exchange...................... -- -- 125,000 1 (125,000) (1) -- -- --
Net loss............................ -- -- -- -- -- -- -- -- --
------ --- --------- --- --------- --- --------- --- --------
Balance at December 31, 1998........ -- -- 8,700,504 $87 8,660,416 $87 2,376,277 $24 $142,211
====== === ========= === ========= === ========= === ========

ACCUMULATED
OTHER
COMPREHENSIVE ACCUMULATED COMPREHENSIVE
INCOME DEFICIT LOSS
------------- ----------- -------------
<S> <C> <C> <C>
Issuance of common stock............ $-- $ --
Comprehensive income (cumulative
translation adjustment)........... 5 -- 5
Preferred and common stock offering
costs............................. -- -- --
Preferred stock dividend and
accretion of discount............. -- -- --
Non-cash stock compensation......... -- -- --
Net loss............................ -- (3,578) (3,578)
-- -------- --------
Balance at December 31, 1997........ 5 (3,573) (3,573)
== ======== ========
Capital Contribution................ -- -- --
Preferred stock dividend and
accretion of discount............. -- -- --
Reorganization concurrent with
IPO............................... -- -- --
Proceeds from IPO................... -- -- --
Preferred and common stock offering
costs............................. -- -- --
Share exchange...................... -- -- --
Net loss............................ -- (13,701) (13,701)
-- -------- --------
Balance at December 31, 1998........ $5 $(17,279) $(17,274)
== ======== ========
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

F-5
<PAGE> 52

CUMULUS MEDIA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE PERIOD
FROM INCEPTION ON
MAY 22, 1997
YEAR ENDED TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Net loss.................................................. $ (13,701) $ (3,578)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Extraordinary loss on early extinguishment of debt..... 1,837
Depreciation........................................... 3,590 391
Amortization of goodwill, intangible assets and other
assets............................................... 13,590 1,064
Non-cash stock compensation............................ 1,689
Changes in assets and liabilities, net of effects of
acquisitions:
Accounts receivable.................................... (21,274) (4,546)
Prepaid expenses and other current assets.............. (2,361) (235)
Accounts payable and accrued expenses.................. 14,216 3,401
Other assets........................................... (300) (166)
Other liabilities...................................... (250) 93
--------- --------
Net cash used in operating activities............. $ (4,653) $ (1,887)
--------- --------
Cash flows from investing activities:
Acquisitions.............................................. (342,845) (91,289)
Escrow deposits on pending acquisitions................... (1,335) (1,999)
Capital expenditures...................................... (6,649) (869)
Other..................................................... (196) (943)
--------- --------
Net cash used by investing activities............. $(351,025) $(95,100)
--------- --------
Cash flows from financing activities:
Proceeds from revolving line of credit.................... $ 175,000 74,525
Payments on revolving line of credit...................... (155,035) (31,990)
Proceeds from sale of senior subordinated notes........... 160,000 --
Payments for debt issuance costs.......................... (9,870) (1,754)
Payments on promissory notes.............................. (278) (4)
Proceeds from issuance of preferred stock................. 106,724 13,152
Proceeds from issuance of common stock.................... 116,527 45,245
Payments for preferred and common stock offering costs.... (14,078) (614)
--------- --------
Net cash provided by financing activities......... $ 378,990 $ 98,560
--------- --------
Increase in cash and cash equivalents....................... 23,312 1,573
Cash and cash equivalents at beginning of period............ $ 1,573 $ --
--------- --------
Cash and cash equivalents at end of period.................. $ 24,885 $ 1,573
========= ========
Supplemental disclosures of cash information:
Interest paid............................................. $ 7,258 $ 25
Non-cash operating and financing activities:
Trade revenue............................................. $ 6,226 $ 757
Trade expense............................................. 6,157 712
Assets acquired through notes payable..................... 2,065 520
Liabilities assumed through acquisitions.................. 942 --
Capital contribution from Cumulus Media LLC............... 15,136 7,503
</TABLE>

See Accompanying Notes to Consolidated Financial Statements

F-6
<PAGE> 53

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Description of Business

Cumulus Media Inc., formerly known as Cumulus Holdings, Inc., ("Cumulus" or
the "Company") is a radio broadcasting corporation incorporated in the state of
Illinois on May 22, 1997 to own and operate commercial radio stations in
mid-size and smaller radio markets in the United States and the Eastern
Caribbean. Between the date of formation of Cumulus Media, LLC, which was April
18, 1997, and May 22, 1997, Cumulus Media, LLC undertook certain activities upon
behalf of the Company pending its incorporation, including the incurrence of
expenses and the funding of escrow deposits for acquisitions. Upon the
incorporation of the Company, these activities and their related account
balances and expenses, were transferred to the Company.

Principles of Consolidation

The consolidated financial statements include the accounts of Cumulus and
its wholly owned subsidiaries. Significant intercompany balances and
transactions have been eliminated in consolidation.

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.

Cash and Cash Equivalents

The Company considers all cash balances and highly liquid investments with
original maturities of three months or less to be cash and cash equivalents.

Concentration of Credit Risks

In the opinion of management, credit risk with respect to accounts
receivable is limited due to the large number of diversified customers and the
geographic diversification of the Company's customer base. The Company performs
ongoing credit evaluations of its customers and believes that adequate
allowances for any uncollectible accounts receivable are maintained.

Property and Equipment

Property and equipment are stated at cost. Depreciation of property and
equipment is computed using the straight-line method over the estimated useful
lives of the assets. Repair and maintenance costs are charged to expense when
incurred.

Intangible Assets and Valuation of Long lived Assets

Intangible assets consist primarily of broadcast licenses, goodwill and
other identifiable intangible assets. The Company amortizes such intangible
assets using the straight-line method over their estimated useful lives. The
Company evaluates the carrying value of intangible assets when events and
circumstances warrant such a review. The Company evaluates the carrying value of
broadcast licenses, goodwill and other intangible assets in relation to the
projected future undiscounted net cash flows, in order to determine if an
impairment has occurred. The carrying value of intangible assets is considered
impaired when the anticipated undiscounted cash flow from such asset is
separately identifiable and is less than its carrying value. In that event, a
loss is recognized based on the amount by which the carrying value exceeds the
fair market value of the asset. Intangible assets to be disposed are reported at
the lower of carrying amount or fair value less cost to sell.

F-7
<PAGE> 54

Organization Costs

Costs related to organizing the Company including incorporation and
recording fees and legal fees are capitalized and amortized to expense over a
three-year period. During the periods ended December 31, 1998 and 1997, the
Company recognized amortization expense of organization costs of approximately
$164 and $91 respectively. In order to comply with Statement of Position 98-5,
"Accounting for the Cost of Start up Activities", in 1999 the Company will write
off $362 representing the remaining balance of capitalized organization costs at
December 31, 1998.

Debt Issuance Costs

The costs related to the issuance of debt are capitalized and amortized to
interest expense over the life of the related debt. During the periods ended
December 31, 1998 and 1997, the Company recognized amortization expense of debt
issuance costs of approximately $210 and $65 respectively.

Revenue Recognition

Revenue is derived primarily from the sale of commercial air-time to local
and national advertisers. Revenue is recognized as commercials are broadcast.

Trade Agreements

The Company trades commercial air time for goods and services used
principally for promotional, sales and other business activities. An asset and
liability is recorded at the fair market value of the goods or services
received. Trade revenue is recorded and the liability relieved when commercials
are broadcast and trade expense is recorded and the asset relieved when goods or
services are received or used.

Local Marketing Agreements

In certain circumstances, the Company enters into a local marketing
agreement ("LMA") or time brokerage agreement with a Federal Communications
Commission licensee of a radio station. In a typical LMA, the licensee of the
station makes available, for a fee, airtime on its station to a party, which
supplies programming to be broadcast on that airtime, and collects revenues from
advertising aired during such programming. Fees paid pursuant to a LMA are
amortized to expense over the term of the agreement using the straight-line
method. LMA fees of $2,404 and $281 are included in amortization expense in the
statement of operations for the periods ending December 31, 1998 and 1997
respectively.

Stock-based Compensation

The Company applies Accounting Principles Board (APB) Opinion 25,
"Accounting for Stock Issued to Employees", and related interpretations in
accounting for stock issued to employees as defined by APB No. 25. In addition,
the Company applies Statement of Financial Accounting Standards (SFAS) No. 123,
"Accounting for Stock Based Compensation", for stock issued to individuals or
groups other than employees.

The Company has disclosed the effects of the application of SFAS No. 123
for the year ended December 31, 1998 on a pro forma basis as described in Note
7.

Income Taxes

Deferred income taxes are recognized for the tax consequences in future
years of differences between the tax bases of assets and liabilities and their
financial reporting amounts based on enacted tax laws and statutory tax rates.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amount more likely than not to be realized.

F-8
<PAGE> 55

Earnings Per Share

The calculation of basic and diluted loss per share was determined by
dividing net loss attributable to common stockholders by the average number of
shares outstanding after giving effect to the exchange of the Company's shares
by Cumulus Media, LLC for the initial public offering as described in Note 7.

New Accounting Pronouncements

As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130 "Reporting Comprehensive Income". Statement 130
establishes standards for the reporting and display of comprehensive income and
its components. Comprehensive income is defined as the change in equity of a
business enterprise during a period from transactions and other events and
circumstances from nonowner sources which are excluded from net income.
Statement 130 requires unrealized gains or losses on foreign currency
translation adjustments to be included in comprehensive income. The adoption of
this Statement had no impact on the Company's net income or stockholders'
equity.

As of January 1998, the Company adopted Statement of Financial Accounting
Standards No. 131 "Disclosures about Segments of an Enterprise and Related
Information". Statement 131 establishes new guidelines for identifying and
reporting information about an entity's operating segments. This standard
requires that management identify operating segments based upon the way
management disaggregates the enterprise for making internal operating decisions.
For the twelve months ending December 31, 1998, Company management has
maintained only one operating segment, radio broadcasting. Accordingly, Company
management does not believe that this statement has an impact on the Company's
financial statements.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities". Statement 133 standardizes the accounting for
derivative instruments by requiring that an entity recognize those items as
assets or liabilities in the statement of financial position and measure them at
fair value. The Company has not engaged in any derivative or hedging
transactions. As a result, we do not anticipate that the adoption of this new
Statement will have a significant effect on our earnings or financial position.
Statement 133 is required to be adopted in years beginning after June 15, 1999.

2. ACQUISITIONS AND DISPOSITIONS

The Company completed fifty-six and ten separate acquisitions of radio
stations for $344.0 million and $99.1 million in cash during 1998 and 1997,
respectively. The aggregate purchase price includes certain acquisition related
costs incurred in 1998 and 1997.

Acquisitions were accounted for by the purchase method of accounting. As
such, the accompanying consolidated balance sheet includes the acquired assets
and liabilities and the statement of operations includes the results of
operations of the acquired entities from their respective dates of acquisition.

An allocation of the aggregate purchase prices to the estimated fair values
of the assets acquired and liabilities assumed is presented below.

<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Current assets, other than cash........................... $ 1,701 $ 757
Property and equipment.................................... 30,192 7,708
Other assets.............................................. 625 --
Intangible assets......................................... 327,516 91,121
Current liabilities....................................... (942) (483)
Deferred taxes............................................ (15,074) --
-------- -------
$344,018 $99,103
======== =======
</TABLE>

F-9
<PAGE> 56

The unaudited consolidated condensed pro forma results of operations data
for the twelve month periods ended December 31, 1998 and 1997, as if the
acquisitions had occurred on January 1, 1997 appears below:

<TABLE>
<CAPTION>
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------- -----------------
(UNAUDITED)
<S> <C> <C>
Net revenues.................................. $131,099 $116,987
Operating loss................................ $ (1,196) $ (8,971)
Net loss...................................... $(22,727) $(30,502)
Net loss attributable to common
stockholders................................ $(41,148) $(48,923)
======== ========
Basic and diluted loss per common share (in
dollars).................................... $ (2.56) $ (3.91)
</TABLE>

Escrow funds of approximately $3.3 million paid by the Company in
connection with pending acquisitions as of December 31, 1998 have been
classified as other assets at December 31, 1998 in the accompanying consolidated
balance sheet.

At December 31, 1998, the Company operated 31 stations under local
marketing agreements ("LMA"). The statement of operations for the year ended
December 31, 1998 includes the revenue and broadcast operating expenses of these
radio stations and any related fees associated with the LMA from the effective
date of the LMA through December 31, 1998.

3. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
ESTIMATED USEFUL LIFE 1998 1997
--------------------- ---- ----
<S> <C> <C> <C>
Land....................................... $ 3,059 $ 407
Broadcasting and other equipment........... 3 to 7 years 28,820 4,377
Furniture and fixtures..................... 5 years 4,661 2,679
Buildings and improvements................. 20 years 8,191 879
Construction in process.................... 688 169
------- ------
45,419 8,511
Less accumulated depreciation.............. (3,981) (391)
------- ------
$41,438 $8,120
======= ======
</TABLE>

4. INTANGIBLE ASSETS

Intangible assets consist of the following:

<TABLE>
<CAPTION>
ESTIMATED USEFUL LIFE 1998 1997
--------------------- ---- ----
<S> <C> <C> <C>
Broadcasting licenses and goodwill....... 25 years $406,010 $89,472
Other intangibles........................ 2 to 5 years 11,785 1,649
-------- -------
417,795 91,121
Less accumulated amortization............ (13,575) (904)
-------- -------
$404,220 $90,217
======== =======
</TABLE>

F-10
<PAGE> 57

5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Accounts payable............................................ $ 1,960 $2,124
Accrued compensation........................................ 934 --
Accrued royalties........................................... 390 --
Accrued commissions......................................... 1,183 --
Accrued state income taxes.................................. 152 67
Barter payable.............................................. 1,326 --
Accrued professional fees................................... 642 --
Due to sellers.............................................. 1,142 --
Accrued interest............................................ 9,195 901
Other....................................................... 2,104 551
------- ------
Total accounts payable and accrued liabilities.............. $19,028 $3,643
======= ======
</TABLE>

6. LONG-TERM DEBT

The Company's long-term debt at December 31, 1998 and 1997 is summarized as
follows:

<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Revolving line of credit of $70,000 at 9%................. $ -- $42,535
Term loan facility of $125,000 at 8.5%.................... 62,500 --
Senior Subordinated Notes, 10 3/8, due 2008............... 160,000 --
Other..................................................... 267 266
-------- -------
222,767 42,801
Less: Current portion of long-term debt................... (20) (12)
-------- -------
$222,747 $42,789
======== =======
</TABLE>

A summary of the future maturities of long-term debt follows:

<TABLE>
<S> <C>
1999........................................................ 20
2000........................................................ 1,020
2001........................................................ 1,020
2002........................................................ 1,020
2003........................................................ 5,020
Thereafter.................................................. 214,667
--------
$222,767
========
</TABLE>

On July 1, 1998, the Company issued $160.0 million in aggregate principal
amount of 10 3/8% Senior Subordinated Notes which have a maturity date of July
1, 2008. The Senior Subordinated Notes are general unsecured obligations of the
Company and are subordinated in right of payment to all existing and future
senior debt of the Company (including obligations under its credit facility).
Interest on the Senior Subordinated Notes is payable semi-annually in arrears.

In March 1998, the Company entered into a $190.0 million senior credit
facility pursuant to which the Company has available a revolving line of credit
of $110.0 million until March 2, 2006, and an eight-year term loan facility of
$80.0 million. The proceeds of the borrowings under the credit facility were
used to finance acquisitions and to repay the Company's outstanding indebtedness
under a prior credit facility. In the first quarter of 1998, the Company
recorded an extraordinary loss related to the early termination of such prior
credit facility of $1.8 million. In connection with the completion of the
initial public offerings, the Company's credit facility was amended, to provide
for a revolving credit line of $25.0 million until March 2, 2006 and two
eight-year term loan facilities of $62.5 million. As of December 31, 1998,
approximately $62.5 million was outstanding

F-11
<PAGE> 58

under the credit facility. The Company's obligations under its current credit
facility are collateralized by substantially all of its assets in which a
security interest may lawfully be granted (including, to the extent permitted by
applicable law and the rules of the FCC, any FCC licenses held by the Company's
subsidiaries), including, without limitation, intellectual property, real
property, and all of the capital stock of the Company's direct and indirect
domestic subsidiaries and 65% of the capital stock of any foreign subsidiaries
and are guaranteed by each of the domestic subsidiaries of the Company.

A commitment fee calculated at a rate ranging from 0.50% to 0.75% per annum
(depending upon our leverage ratio) of the average daily amount available under
the revolving line of credit and the amount available under the term loan
facility is payable quarterly in arrears, and fees in respect of letters of
credit issued under our Credit Facility equal to the lesser of (i) the interest
rate margin then applicable to Eurodollar Rate loans and (ii) 2.50% is also
payable quarterly in arrears. In addition, a fronting fee to be agreed to by the
Company and the issuing bank of such letter of credit calculated at a rate not
to exceed 0.0125% per annum on the maximum amount of each letter of credit is
payable quarterly to the issuing bank.

The revolving credit and term loan borrowings are repayable in quarterly
installments beginning in 2000. The scheduled annual amortization of the term
loans is $2.0 million in each of the years 2000 through 2002, $10.0 million in
2003, $20.0 million in 2004, $69.0 million in 2005, and $20.0 million at
maturity. The scheduled annual reduction in availability under the revolving
credit loans is $7.5 million in each of the years 2003 through 2005, and $2.5
million at maturity in 2006. Certain mandatory prepayments of the term loan
facility and the revolving credit line and reductions in the availability of the
revolving credit line are required to be made, including:

- subject to certain exceptions 100% of the net proceeds from any issuance
of capital stock in connection with an initial public offering or
incurrence of indebtedness;

- 100% of the net proceeds from certain asset sales; and

- between 50% and 75% (dependent on the leverage ratio of the Company) of
the excess cash flow of the Company.

The Company is subject to certain restrictive financial and operating
covenants, including but not limited to maximum leverage covenants, minimum
interest and fixed charge coverage covenants, limitations on asset dispositions
and the payment of dividends. The failure to comply with those covenants would
result in an event of default under the applicable instruments, which in turn
would permit acceleration of debt under those instruments. At December 31, 1998,
the Company was in compliance with such financial and operating covenants.

7. COMMON STOCK AND MANDATORILY REDEEMABLE CUMULATIVE PREFERRED STOCK

(a) Initial Public Offering

On July 1,1998, the Company completed its initial public offering of common
and preferred stock and debt totaling $391.0 million. The common stock offering
was for 7,598,572 shares of Class A Common Stock, par value $.01 per share (the
"Class A Common Stock"), including 6,428,572 shares sold by the Company and
1,170,000 shares sold by State of Wisconsin Investment Board. Of the 7,598,572
shares of Class A Common Stock sold, 1,519,714 shares were sold in an offering
outside the U.S. and Canada and 6,078,858 shares were sold in a concurrent
offering in the United States and Canada. In addition, on July 31, 1998 the
underwriters exercised a portion of the over-allotment options and the Company
sold an additional 800,000

F-12
<PAGE> 59

shares of Class A Common Stock for net proceeds to the Company of $10.4 million.
These offerings are collectively referred to as the "Stock Offerings."

At December 31, 1998 the Company also has 8,660,416 shares of Class B
Common Stock, and 2,376,277 shares of Class C Common Stock issued and
outstanding. Except with respect to voting and conversion, shares of Class A
Common Stock, Class B Common Stock and Class C Common Stock are identical in all
respects. Holders of shares of Class A Common Stock are entitled to one vote per
share; except as provided below, holders of Class B Common Stock are not
entitled to vote; and, subject to the next sentence, holders of shares of Class
C Common Stock are entitled to ten votes per share. During the period of time
commencing with the date of conversion of any Class B Common Stock to Class C
Common Stock by either NationsBanc Capital Corp. or the State of Wisconsin
Investment Board and ending with the date on which NationsBanc Capital Corp. and
State of Wisconsin Investment Board (together with their respective affiliates)
each ceases to beneficially own at least 5% of the aggregate shares of Common
Stock held by such holders immediately prior to the consummation of the
Company's initial public offerings in July 1998, holders of Class C Common Stock
shall be entitled to only one vote per share.

All actions submitted to a vote of the Company's stockholders are voted on
by holders of Class A Common Stock and Class C Common Stock, voting together as
a single class. Holders of Class B Common Stock are not entitled to vote, except
with respect to the following fundamental corporate actions:

- any proposed amendment to the Company's Articles of Incorporation or
Bylaws;

- any proposed merger, consolidation or other business combination, or
sale, transfer or other disposition of all or substantially all of the
assets of the Company;

- any proposed voluntary liquidation, dissolution or termination of the
Company; and

- any proposed transaction resulting in a change of control and except as
set forth below.

The affirmative vote of the holders of a majority of the outstanding shares
of Class A Common Stock and Class C Common Stock, voting together as a single
class, and the consent of the holders of a majority of the outstanding shares of
Class B Common Stock, consenting separately as a class, are required to approve
any fundamental corporate action; provided that such consent rights will cease
with respect to such holder of Class B Common Stock and the shares of Class B
Common Stock held by such holder shall not be included in determining the
aggregate number of shares outstanding for consent purposes, upon the failure of
any such holder (together with its affiliates) to beneficially own at least 50%
of the shares of common stock held by such holder immediately prior to the
consummation of the Company's initial public offerings in July 1998.

Concurrently with the Stock Offerings, the Company sold in a Preferred
Stock Offering (the "Preferred Stock Offering") $125.0 million of 13 3/4 %
Series A Cumulative Exchangeable Redeemable Preferred Stock Due 2009 (the
"Series A Preferred Stock") approximately $34.5 million of which was sold
directly by the Company to The Northwestern Mutual Life Insurance Company at a
purchase price equal to the price to the public (as described below) and $160.0
million of 10 3/8 % Senior Subordinated Notes Due 2008 (the "Notes") (the "Debt
Offering" and, together with the Stock Offerings and the Preferred Stock
Offering, the "Offerings"). The holders of the Series A Preferred Stock are
entitled to receive cumulative dividends at an annual rate equal to 13 3/4% of
the liquidation preference per share of Series A Preferred Stock, payable
quarterly, in arrears.

At December 31, 1998 the Series A Cumulative Exchangeable Redeemable
Preferred Stock due 2009 disclosed on the balance sheet represents 129,286
shares outstanding (each with a $1,000.00 par value), plus accrued dividends of
$4,445,000, representing a quarterly dividend of $34.45 per share. This dividend
was paid in additional shares of preferred stock on January 1, 1999.

On or before July 1, 2003, the Company may, at its option, pay dividends in
cash or in additional fully paid and non-assessable shares of Series A Preferred
Stock. After July 1, 2003, dividends may only be paid in cash. The shares of
Series A Preferred Stock are subject to mandatory redemption on July 1, 2009 at
a price equal to 100% of the liquidation preference plus any and all accrued and
unpaid cumulative dividends. The Series A Preferred Stock may be redeemed by the
Company prior to such date under certain circumstances.
F-13
<PAGE> 60

Immediately prior to the completion of the Offerings, (i) all shares of the
Company's 12% Class A Cumulative Preferred Stock which were held by The
Northwestern Mutual Life Insurance Company (the "NML Preferred Stock") plus all
accrued and unpaid dividends thereon as of the exchange date were exchanged for
shares of Series A Preferred Stock having an equivalent aggregate liquidation
value; and (ii) Cumulus Media LLC, the Company's parent prior to the
consummation of the Offerings ("Media LLC") was liquidated and the Shares of
Class A Common Stock, Class B Common Stock and Class C Common Stock of the
Company held by Media LLC was distributed by Media LLC to its members in
liquidation (the "Reorganization").

Prior to the completion of the offerings, the Company was authorized to
issue 12,000 shares of Mandatorily Redeemable 12% Class A Cumulative Preferred
Stock ("NML Preferred Stock"), $.01 par value, stated value $10,000. In November
1997, the Company issued 1,625 shares for proceeds of $13,152. In February 1998,
the Company issued an additional 1,625 shares of the NML Preferred Stock in
exchange for $16,250. Dividends on the outstanding NML Preferred Stock accrued
at an annual rate of 12% of the stated value per share compounded quarterly, and
accrued and were payable quarterly, subject to the Company's right to pay
dividends by issuing Payment in Kind (PIK) shares, which are shares of NML
Preferred Stock. At December 31, 1997, the Company had accrued the value of
preferred stock dividends and accretion of discount in the amount of $274. The
Company declared a PIK dividend of 52.36 shares in February 1998. All of the
issued and outstanding shares of the Mandatorily Redeemable 12% Class A
Cumulative Preferred Stock were redeemed in connection with the issuance of the
Series A Preferred Stock.

(b) Stock Options

1998 STOCK INCENTIVE PLAN

The Company's Board of Directors has adopted the 1998 Stock Incentive Plan
to provide officers, other key employees and non-employee directors of the
Company (other than participants in the Company's Executive Plan described
below), as well as consultants to the Company, with additional incentives by
increasing their proprietary interest in the Company. An aggregate of 1,288,834
shares of Class A Common Stock is subject to the 1998 Stock Incentive Plan, of
which a maximum of 1,288,834 shares of Class A Common Stock is subject to
incentive stock options and a maximum of 100,000 shares of Class A Common Stock
is available to be awarded as restricted stock. In addition, subject to certain
equitable adjustments, no one person will be eligible to receive options for
more than 300,000 shares in any one calendar year and the maximum amount of
restricted stock which will be awarded to any one person during any calendar
year is $500,000.

The 1998 Stock Incentive Plan permits the Company to grant awards in the
form of stock options (including both incentive stock options that meet the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended,
and non-qualified stock options) and restricted shares of the Class A Common
Stock. All stock options awarded under the plan will be granted at an exercise
price of not less than fair market value of the Class A Common Stock on the date
of grant. No award is allowed to be granted under the 1998 Stock Incentive Plan
after June 22, 2008.

The 1998 Stock Incentive Plan is administered by the Compensation Committee
of the Board, which has exclusive authority to grant awards under the plan and
to make all interpretations and determinations affecting the plan. The
Compensation Committee has discretion to determine the individuals to whom
awards are granted, the amount of such award, any applicable vesting schedule,
whether awards vest upon the occurrence of a Change in Control (as defined in
the 1998 Stock Incentive Plan) and other terms of any award. The Compensation
Committee may delegate to certain senior officers of the Company its duties
under the plan subject to such conditions or limitations as the Compensation
Committee may establish.

Any award made to a non-employee director must be approved by the Company's
Board of Directors. In the event of any changes in the capital structure of the
Company, the Compensation Committee will make equitable adjustments to
outstanding awards so that the net value of the award is not changed.

F-14
<PAGE> 61

As of December 31, 1998, there are outstanding options to purchase a total
of 1,120,745 shares of Class A Common Stock exercisable at a price of $14.00 per
share under the 1998 Stock Incentive Plan. These options vest, in general, over
five years starting on July 1, 1998, with the possible acceleration of vesting
for some options if certain performance criteria are met. In addition, all
options vest upon a change of control as more fully described in the 1998 Stock
Incentive Plan.

EXECUTIVE STOCK INCENTIVE PLAN

The Company's Board of Directors has also adopted the Executive Stock
Incentive Plan (the "Executive Plan") to provide certain key executives of the
Company with additional incentives by increasing their proprietary interest in
the Company. An aggregate of 2,001,380 shares of Class C Common Stock is subject
to the Executive Plan. In addition, no one person will be eligible to receive
options for more than 1,000,690 shares in any one calendar year. Richard W.
Weening, Executive Chairman, Treasurer and Director, and Lewis W. Dickey, Jr.,
Executive Vice Chairman and Director are the sole participants in the Executive
Plan.

The Executive Plan permits the Company to grant awards in the form of stock
options (including both incentive stock options that meet the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended, and non-qualified
stock options) of Class C Common Stock.

Stock options under the Executive Plan were granted on July 1, 1998 and are
divided into three groups. Group 1 consists of time vested options with an
exercise price equal to $14.00 per share and vest quarterly in equal
installments over a four-year period (subject to accelerated vesting in certain
circumstances). Group 2 and Group 3 also consist of time-based options which
vest in four equal annual installments on July 1, 1999, July 1, 2000, July 1,
2001 and July 1, 2002 (subject to accelerated vesting in certain circumstances).
The first installment of both the Group 2 options and Group 3 options are
exercisable at a price of $14.00 per share on July 1, 1999 and subsequent
installments are exercisable at a price 15% (or 20% in the case of Group 3
options) greater than the prior year's exercise price for each of the next three
years.

The Executive Plan is administered by the Compensation Committee of the
Board, which will have exclusive authority to grant awards under the Executive
Plan and to make all interpretations and determinations affecting the Executive
Plan. In the event of any changes in the capital structure of the Company, the
Compensation Committee will make equitable adjustments to outstanding awards
granted under the Executive Plan so that the net value of the award is not
changed. As of December 31, 1998, there are outstanding options to purchase a
total of 2,001,380 shares of Class C Common Stock under the Executive Plan.

1998 EMPLOYEE STOCK PURCHASE PLAN

The Company's Board of Directors has adopted the 1998 Employee Stock
Purchase Plan, subject to approval by our shareholders at our next annual
meeting. The 1998 Employee Stock Purchase Plan is designed to qualify for
certain income tax benefits for employees under Section 423 of the Internal
Revenue Code of 1986, as amended, and contains 1,000,000 shares of Class A
Common Stock.

The plan allows qualifying employees to purchase Class A Common Stock at
the end of each calendar year, commencing with the calendar year beginning
January 1, 1999, at 85% of the lesser of the fair market value of the Class A
Common Stock on the first or last trading days of the year. The amount each
employee can purchase is limited to the lesser of (i) 15% of pay or (ii) $25,000
of stock valued on the first trading day of the year. An employee must be
employed at least six months as of the first trading day of the year in order to
participate in the 1998 Employee Stock Purchase Plan.

Cumulus Media Inc. applies APB Opinion No. 25 in accounting for its Stock
Options issued to employees and SFAS No. 123 in accounting for stock options
issued to non-employees. Accordingly, no compensation cost has been recognized
for its stock options in the consolidated financial statements. Had Cumulus
Media Inc. determined compensation cost based on the fair value at the grant
date for its stock

F-15
<PAGE> 62

options under SFAS No. 123, the Company's net loss attributable to common
shareholders would have been increased $2.3 million to the as reported and pro
forma amounts indicated below:

<TABLE>
<CAPTION>
1998
----
<S> <C>
Net loss attributable to Common Shareholders:
As reported............................................... $(27,292)
Pro forma................................................. $(29,596)
Basic and diluted loss per Common Share
As reported............................................... $(1.70)
Pro forma................................................. $(1.83)
</TABLE>

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted average
assumptions used for grants: expected volatility of 65.6% for 1998; risk-free
interest rate of 4.73% for 1998; dividend yield of 0% and expected lives of four
years and five years from the date of grant for shares issued under the
Executive Stock Incentive Plan and the 1998 Stock Incentive Plan, respectively.

Following is a summary of activity in the employee option plans and
agreements discussed above for the year ended December 31, 1998:

<TABLE>
<CAPTION>
1998
WEIGHTED AVERAGE
SHARES EXERCISE PRICE
------ ----------------
<S> <C> <C>
Outstanding at beginning of year............................ -- $ 0.00
Granted..................................................... 3,142,925 15.56
Exercised................................................... -- 0.00
Canceled.................................................... (20,800) 14.00
--------- ------
Outstanding at end of year.................................. 3,122.125 $15.55
--------- ------
Options exercisable at year end............................. 3,122,125
---------
Weighted average fair value of options granted during the
year...................................................... $ 6.43
</TABLE>

The following table summarizes information about stock options outstanding
at December 31, 1998:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
-------------------
NUMBER OUTSTANDING WEIGHTED AT AVERAGE
AND EXERCISABLE AT REMAINING WEIGHTED AVERAGE
RANGE OF EXERCISE PRICES DECEMBER 31, 1998 CONTRACTUAL LIFE EXERCISE PRICE
------------------------ ------------------ ------------------- ----------------
<S> <C> <C> <C>
$14.00 (Class A Shares)........................ 1,120,745 4.5 years $14.00
$14.00 (Class C Shares)........................ 969,419 3.5 years $14.00
$16.10 to $24.19 (Class C Shares).............. 1,031,961 3.5 years $19.59
--------- ------
3,122,125 $15.55
========= ======
</TABLE>

F-16
<PAGE> 63

8. INCOME TAXES

Income tax expense for 1998 and 1997 consisted of the following components:

<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Current tax expense:
Federal................................................... $ -- $ --
State and Local........................................... 126 67
------- -----
Total current expense.................................. $ 126 $ 67
------- -----
Deferred tax expense (benefit):
Federal................................................... $(4,451) $(356)
State and Local........................................... (620) 21
Less: Change in valuation allowance......................... 5,071 335
------- -----
Total deferred expense................................. 0 0
------- -----
Total income tax expense............................... $ 126 $ 67
======= =====
</TABLE>

Total income tax expense differed from the amount computed by applying the
federal standard tax rate of 35% for the periods ended December 31, 1998 and
1997 due to the following:

<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Pretax loss at federal statutory rate...................... $(4,108) $(1,194)
State income tax expense, net of federal benefit......... (1,135) 58
Nondeductible stock compensation......................... -- 574
Nondeductible Goodwill................................... 278 --
Other.................................................... 20 294
Change in valuation allowance............................ 5,071 335
------- -------
Net income tax expense................................... $ 126 $ 67
======= =======
</TABLE>

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities at December 31, 1998 and
1997 are presented below:

<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Deferred tax asset:
Net operating loss.......................................... $ 7,376 $ 468
Accounts receivable....................................... 340 41
Property, plant and equipment............................. -- 4
Other..................................................... 215 --
------- -----
Total deferred tax assets.............................. $ 7,931 $ 513
Less valuation allowance:................................... (5,405) (335)
------- -----
Net deferred tax assets................................... $ 2,525 $ 178
------- -----
Deferred tax liabilities:
Intangible assets......................................... 17,378 178
Other..................................................... 221 --
------- -----
Total deferred tax liabilities......................... $17,599 $ 178
------- -----
Net deferred tax liability............................. $15,074 $ --
======= =====
</TABLE>

Deferred tax assets and liabilities are computed by applying the U.S.
federal income tax rate in effect to the gross amounts of temporary differences
and other tax attributes, such as net operating loss carryforward. The Company
has established a valuation allowance against its deferred tax assets following
an assessment of the likelihood of realizing such amounts. In arriving at the
determination as to the amount of the valuation allowance required, the Company
considered its operating history as well as significant acquisitions made in

F-17
<PAGE> 64

1998 and pending acquisitions, statutory restrictions on the use of operating
losses, tax planning strategies and its expectation of the level and timing of
future taxable income.

The foreign operations of the Company have incurred operating losses of
$715 and $834 for the year ending December 31, 1998 and for the period from
inception on May 22, 1997 through December 31, 1997, respectively, the benefits
of which remains unlikely. Accordingly, the Company has not recognized a tax
benefit for these loss carryforwards since it is not assured it could utilize
the loss carryforward in the future.

At December 31, 1998, the Company has a federal net operating loss
carryforward available to offset future income of approximately $18,328 which
expires after 2012.

9. EARNINGS PER SHARE

The following table sets forth the computation of basic loss per share for
the year ended December 31, 1998 and for the period from May 22, 1997 through
December 31, 1997. In order to reflect the initial public offering on July 1,
1997, the weighted average number of shares outstanding for the period from May
22, 1997 through December 31, 1997 and from January 1, 1998 through June 30,
1998 were determined after giving effect to the exchange of the Company's shares
by Cumulus Media, LLC for the initial public offering (see Note 7).

<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Numerator:
Net loss before extraordinary item........................ $(11,864) $(3,578)
Preferred stock dividend.................................. (10,667) --
Accretion of preferred stock discount..................... (2,924) (274)
-------- -------
Numerator for basic earnings per share -- income available
for common stockholders................................ $(25,455) $(3,852)
-------- -------
Denominator:
Denominator for basic earnings per share -- weighted
average shares after giving effect to initial public
offering............................................... 16,085 12,509
-------- -------
Net loss per common share -- before extraordinary item.... $(1.58) $(0.31)
Extraordinary item........................................ (0.12) --
-------- -------
Net loss per common share................................. $ (1.70) $ (0.31)
======== =======
</TABLE>

During 1998 the Company issued options to key executives and employees to
purchase shares of common stock as part of the Company's stock option plans (see
Note 7). At December 31, 1998 there were options issued to purchase the
following classes of common stock:

<TABLE>
<S> <C>
Options to purchase class A common stock.................... 1,120,745
Options to purchase class C common stock.................... 2,001,380
</TABLE>

Earnings per share assuming dilution has not been presented as the effect
of the options above would be antidilutive.

10. LEASES

The Company has noncancelable operating leases, primarily for office space
and various capital leases primarily for equipment and vehicles. The operating
leases generally contain renewal options for periods ranging from one to ten
years and require the Company to pay all executory costs such as maintenance and
insurance. Rental expense for operating leases (excluding those with lease terms
of one month or less that were not renewed) was approximately $2,073 and $201
for the period ended December 31, 1998 and 1997 respectively.

F-18
<PAGE> 65

Future minimum lease payments under noncancelable operating leases (with
initial or remaining lease terms in excess of one year) as of December 31, 1998
are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31:
------------
<S> <C>
1999................................................... $2,630
2000................................................... 2,393
2001................................................... 2,054
2002................................................... 1,702
2003................................................... 1,214
Thereafter............................................. 3,670
</TABLE>

11. COMMITMENTS AND CONTINGENCIES

The Company is a defendant from time to time in various lawsuits, which are
generally incidental to its business. The Company is vigorously contesting all
such matters and believes that their ultimate resolution will not have a
material adverse effect on its consolidated financial position, results of
operations or cash flows.

As of December 31, 1998 the Company has also entered into asset purchase
agreements to acquire stations across seventeen markets for an aggregate
purchase price of approximately $72,261. In general, the transactions are
structured such that if the Company can not consummate these acquisitions
because of a breach of contract, the Company may be liable for five percent of
the purchase price.

12. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of receivables, payables, and accrued expenses
approximate fair value due to the short maturity of these instruments. The
estimated fair value of long term debt and preferred stock subject to mandatory
redemption are estimated based on current market rates and approximate the
carrying value.

13. RELATED PARTY TRANSACTIONS

On November 12, 1997, the Company purchased substantially all of the assets
of The Midwestern Broadcasting Company, including WWWM-FM and WLQR-AM, for
approximately $10,000. The President of Midwestern Broadcasting Company is the
Executive Vice-Chairman and a Director of the Company.

Substantially all of the Company's broadcast strategy consulting services
and programming research are contracted with Stratford Research the co-owner of
which is the Executive Vice Chairman and a Director of the Company. Total fees
paid to Stratford Research during fiscal 1998 and 1997 were approximately $2,735
and $184. Of these expenses paid in 1998 and 1997, $1,204 and $117 were
capitalized as acquisition costs. The remaining expenses have been included as
part of the station operating expenses in the statement of operations. At
December 31, 1998 and 1997 amounts owed to Stratford Research were approximately
$371 and $240 respectively.

During 1998 and 1997, the Company remitted $150 and $206 respectively, to
Cumulus Media, LLC representing fees for management services. These fees are
included in corporate general and administrative expenses. The Company has also
paid Cumulus Media, LLC $300 in 1997 for organizational costs, which have been
included in other assets.

During 1998 and 1997, the Company paid $1,423 and $297 respectively to
QUAESTUS Management Corporation for services rendered in connection with the
acquisition of stations and corporate finance services. Of these expenses paid
in 1998 and 1997, $1,223 and $297 were capitalized as acquisition costs. The
remaining expenses have been included as part of the corporate general and
administrative expenses in the statement of operations. Amounts owed to QUAESTUS
at December 31, 1998 and 1997 totaled $78 and $0, respectively.

F-19
<PAGE> 66

Walker LLP on numerous matters dealing with compliance with federal regulations
and corporate finance activities. Total expenses paid to Paul, Hastings,
Janofsky & Walker LLP during fiscal 1998 and 1997 were approximately $1,190 and
$0. Of these expenses paid in 1998 and 1997, $1,131 and $0 were capitalized as
acquisition or financing costs. The remaining expenses have been included as
part of the corporate general and administrative expenses in the statement of
operations. At December 31, 1998 and 1997 amounts payable to Paul, Hastings,
Janofsky & Walker LLP were approximately $642 and $22.

14. NON-CASH STOCK COMPENSATION

Cumulus Media, LLC issued 1,630 shares of common stock to two key employees
of the Company. In addition, Cumulus Media, LLC issued 1,564 shares and 2,346
shares of common stock to DBBC of Georgia, LLC, the co-owner of which is the
Vice Chairman and a Director of the Company, and Quaestus Management Corporation
(consulting service organizations), respectively. During the period ended
December 31, 1997, the Company has recognized compensation expense of $1,689
related to these shares. The value of the Cumulus Media, LLC stock was estimated
through the use of a discounted cash flow analysis. The valuation included
various assumptions regarding Cumulus Media, LLC's future performance, which the
Company believed to be reasonable at the date of grant (the measurement date).
The valuation also considered the priority return of other equity instruments
issued by Cumulus Media, LLC.

15. DEFINED CONTRIBUTION PLAN

Effective January 1, 1998, the Company adopted a qualified profit sharing
plan under Section 401(k) of the Internal Revenue Code. All employees meeting
eligibility requirements are qualified for participation in the plan.
Participants in the plan may contribute 1% to 15% of their annual compensation
through payroll deductions. Under the plan, the Company will provide a matching
contribution of 25% of the first 6% of each participant's contribution. Matching
contributions are to be remitted to the plan by the Company monthly. During
1998, the Company contributed approximately $200 to the plan.

16. GUARANTORS' FINANCIAL INFORMATION

All of the Company's direct and indirect subsidiaries (all such
subsidiaries are directly or indirectly wholly owned by the Company) of the
Company will provide full and unconditional senior subordinated guarantees for
the senior subordinated notes on a joint and several basis. There are no
significant restrictions on the ability of the guarantor subsidiaries to pay
dividends or make loans to the Company.

Following is consolidating condensed financial information pertaining to
the Company and its subsidiary guarantors. The Company has not presented
separate financial statements for the subsidiary guarantors because management
has determined that such information is not material to investors.

<TABLE>
<CAPTION>
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998
-----------------------------------------------------
GUARANTOR TOTAL
PARENT SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net revenue....................................... $ -- $98,787 $ -- $ 98,787
Operating expense................................. 6,503 90,842 -- 97,345
-------- ------- ------- --------
Operating income (loss)........................... (6,503) 7,945 -- 1,442
Net interest income (expense) and other........... (13,172) (134) -- (13,306)
-------- ------- ------- --------
Loss before extraordinary item.................... (19,675) 7,811 -- (11,864)
Extraordinary loss................................ (1,837) -- -- (1,837)
Net revenue (loss) before equity adjustment....... (21,512) 7,811 -- (13,701)
Equity revenue (loss) in subsidiaries............. 7,811 -- (7,811) --
Net revenue (loss)................................ (13,701) 7,811 (7,811) (13,701)
Preferred stock dividend.......................... 13,591 -- -- 13,591
-------- ------- ------- --------
Net income (loss) attributable to common
adjustment...................................... $(27,292) $ 7,811 $(7,811) $(27,292)
======== ======= ======= ========
</TABLE>

F-20
<PAGE> 67

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1998
-----------------------------------------------------
GUARANTOR TOTAL
PARENT SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Current assets.................................... $ 10,888 $ 44,861 $ -- $ 55,749
Equipment, net.................................... 1,188 40,250 -- 41,438
Investment in subsidiaries........................ 444,078 -- (444,078) --
Intangible assets, net............................ -- 404,220 -- 404,220
Other assets...................................... 32,166 3,775 (19,717) 16,224
-------- -------- --------- --------
Total assets.................................... $488,320 $493,106 $(463,795) $517,631
======== ======== ========= ========
Current liabilities............................... $ 11,447 $ 8,370 $ (1) $ 19,816
Long-term debt, excluding current portion......... 222,747 -- -- 222,747
Other liabilities................................. 3,513 17,322 (19,717) 1,118
Deferred income taxes............................. -- 15,074 -- 15,074
-------- -------- --------- --------
Total liabilities............................... 237,707 40,766 (19,718) 258,755
-------- -------- --------- --------
Preferred stock................................... 133,741 -- -- 133,741
Stockholder's equity.............................. 116,872 452,340 (444,077) 125,135
-------- -------- --------- --------
Total liabilities and stockholder's equity...... $488,320 $493,106 $(463,795) $517,631
======== ======== ========= ========
</TABLE>

<TABLE>
<CAPTION>
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998
--------------------------------------------------------
GUARANTOR TOTAL
PARENT SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net cash (used in) provided by operating
activities................................. $(24,597) $ 19,944 $ -- $ (4,653)
-------- --------- --------- ---------
Cash flows from investing activities:
Acquisitions.................................. -- (342,845) -- (342,845)
Investment in subsidiaries.................... (342,845) -- 342,845 --
Escrow deposits on pending acquisitions....... (1,335) -- -- (1,335)
Other......................................... (1,154) (5,691) -- (6,845)
-------- --------- --------- ---------
Net cash used by investing activities.... (345,334) (348,536) 342,845 (351,025)
-------- --------- --------- ---------
Cash flows from financing activities:
Contribution from parent...................... -- 342,845 (342,845) --
Proceeds from revolving line of credit........ 175,000 -- -- 175,000
Payments on revolving line of credit.......... (155,035) -- -- (155,035)
Payments for debt issuance costs.............. (9,870) -- -- (9,870)
Payments on promissory note................... (278) -- -- (278)
Proceeds from Senior Notes.................... 160,000 -- -- 160,000
Proceeds from issuance of Preferred stock..... 101,710 -- -- 101,710
Proceeds from issuance of Common stock........ 107,463 -- -- 107,463
-------- --------- --------- ---------
Net cash provided by financing
activities............................ 378,990 342,845 (342,845) 378,990
-------- --------- --------- ---------
Increase in cash and cash equivalents.... 9,059 14,253 -- 23,312
Cash and cash equivalents at beginning of
period................................ 1,080 493 -- 1,573
Cash and cash equivalents at end of
period................................ $ 10,139 $ 14,746 $ -- $ 24,885
======== ========= ========= =========
</TABLE>

F-21
<PAGE> 68

<TABLE>
<CAPTION>
FOR THE PERIOD FROM
INCEPTION ON MAY 22, 1997 TO DECEMBER 31, 1997
-------------------------------------------------------
GUARANTOR TOTAL
PARENT SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net revenues...................................... $ -- $9,163 $ -- $ 9,163
Operating expenses................................ 3,072 8,711 -- 11,783
Operating income (loss)........................... (3,072) 452 -- (2,620)
Net interest income (expense) and other........... (891) -- -- (891)
Income (loss) before income taxes................. (3,963) 452 -- (3,511)
Income tax expense................................ 67 -- -- 67
Income (loss) before equity income
In subsidiaries................................. (4,030) 452 -- (3,578)
Equity income in subsidiaries..................... 452 -- (452) --
Income (loss)..................................... (3,578) 452 (452) (3,578)
Preferred stock dividend.......................... 274 -- -- 274
Net income (loss) attributable to Common
stockholders.................................... $(3,852) $ 452 $(452) $(3,852)
======= ====== ===== =======
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
--------------------------------------------------------
GUARANTOR TOTAL
PARENT SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Current Assets................................... $ 3,588 $ 3,514 $ -- $ 7,102
Equipment, net................................... 317 7,803 -- 8,120
Investment in subsidiaries....................... 101,732 40 (101,772) --
Intangible assets, net........................... -- 90,217 -- 90,217
Other assets..................................... 2,706 2,296 -- 5,002
-------- -------- --------- --------
Total Assets................................ $108,343 $103,870 $(101,772) $110,441
======== ======== ========= ========
Current liabilities.............................. $ 1,869 $ 1,981 $ -- $ 3,850
Long-term debt, excluding current portion........ 42,789 -- -- 42,789
Other liabilities................................ 286 2,269 (2,155) 400
Total liabilities........................... 44,944 4,250 (2,155) 47,039
-------- -------- --------- --------
Preferred stock.................................. 13,426 -- -- 13,426
Stockholder's equity............................. 49,973 99,620 (99,617) 49,976
-------- -------- --------- --------
Total liabilities and stockholders equity... $108,343 $103,870 $(101,772) $110,441
======== ======== ========= ========
</TABLE>

F-22
<PAGE> 69

<TABLE>
<CAPTION>
FOR THE PERIOD FROM
INCEPTION ON MAY 22, 1997 TO DECEMBER 31, 1997
--------------------------------------------------------
GUARANTOR TOTAL
PARENT SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net cash (used in) provided by operating
activities.................................. $ (2,970) $ 1,083 $ -- $ (1,887)
-------- -------- -------- --------
Cash flows from investing activities:
Acquisitions................................... -- (91,289) -- (91,289)
Investment in subsidiaries..................... (91,289) -- 91,289 --
Escrow deposits on pending acquisitions........ (1,999) -- -- (1,999)
Other.......................................... (1,273) (539) -- (1,812)
-------- -------- -------- --------
Net cash used by investing activities..... (94,561) (91,828) 91,289 (95,100)
-------- -------- -------- --------
Cash flows from financing activities:
Contribution from parent....................... -- 91,289 (91,289) --
Proceeds from revolving line of credit......... 74,525 -- -- 74,525
Payments on revolving line of credit........... (31,990) -- -- (31,990)
Payments for debt issuance cost................ (1,754) -- -- (1,754)
Payments on promissory note.................... (4) -- -- (4)
Proceeds from issuance of common stock......... 44,631 -- -- 44,631
Proceeds from issuance of preferred stock...... 13,152 -- -- 13,152
Net cash provided by financing
activities............................. 98,560 91,289 (91,289) 98,560
-------- -------- -------- --------
Increase in cash and cash equivalents..... 1,029 544 -- 1,573
Cash and cash equivalents at beginning of
period................................. -- -- -- --
Cash and cash equivalents at end of
period................................. $ 1,029 $ 544 $ -- $ 1,573
======== ======== ======== ========
</TABLE>

17. SUBSEQUENT EVENTS

From January 1, 1999 through March 31, 1999, the Company completed
acquisitions of radio stations in six separate markets for an aggregate purchase
price of approximately $29,275. These transactions will be accounted for by the
purchase method of accounting.

As of March 19, 1999, the Company has also entered into asset purchase
agreements to acquire stations across seventeen markets for an aggregate
purchase price of approximately $73,254. The Company believes its existing
available credit facilities and cash flow from operations are sufficient to fund
the purchase price for these transactions upon consummation. In general, the
transactions are structured such that if the Company can not consummate these
acquisitions because of breach of contract, the Company may be liable for an
amount that approximates five percent of the purchase price.

As of April 14, 1999, the Company was in negotiations with its existing
lender regarding a new credit facility. In connection with these negotiations,
the existing credit facility was amended to modify certain restrictive financial
and operating covenants. The Company expects to have negotiations for a new
credit facility concluded by June 30, 1999.

18. SUBSEQUENT EVENTS (UNAUDITED)

As of April 14, 1999 a national advertising representation firm has
asserted that the Company owes it approximately $2 million in commissions and
termination payments as a result of a change in the Company's national
representation. The Company contests this assertion and will defend its'
position as management considers appropriate.

F-23
<PAGE> 70

SCHEDULE II

CUMULUS MEDIA INC.

FINANCIAL STATEMENT SCHEDULE
VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
ADDITIONS
-------------------------------------------------------------------
BALANCE AT PROVISION FOR BALANCE
BEGINNING DOUBTFUL ACQUIRED AT END
FISCAL YEAR OF YEAR ACCOUNTS STATIONS(1) WRITE-OFFS OF YEAR
- ----------- ---------- ------------- ----------- ---------- -------
<S> <C> <C> <C> <C> <C>
1998
Allowance for bad debts.................. $125 864 97 (291) $895
1997
Allowance for bad debts.................. $ -- 95 30 -- $125
</TABLE>

- -------------------------
(1) Allowance for doubtful accounts receivable acquired in acquisitions.

F-24
<PAGE> 71

EXHIBIT 12.1

CUMULUS MEDIA INC.

COMPUTATION OF RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS

<TABLE>
<S> <C>
Income before income taxes.................................. $(11,738)
Fixed charges:
Interest Expense.......................................... 15,551
Amortization of loan fees................................. 601
Interest portion of rentals............................... 707
--------
Total fixed charges.................................. 16,859
Preferred Stock dividends................................... 13,591
Ratio of pretax income to income from continuing
operations................................................ 1
--------
After tax preferred dividends............................... 13,591
--------
Total fixed charges and preferred dividends.......... 30,450
Total earnings available for Payment of fixed
charges........................................ 5,121
Ratio of earnings to fixed Charges.............. (A)
</TABLE>

- -------------------------
(A) As a result of the loss incurred in 1998, the Company was unable to fully
cover the indicated fixed charges and preferred dividends. Earnings did not
cover fixed charges and preferred dividends by $25,329 in 1998.

F-25

<PAGE> 1
EXHIBIT 23.1

CUMULUS MEDIA, INC.
CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the Cumulus Media Inc.
registration statements on Form S-8 (File No. 333-68487 and File No. 333-58969)
of our report, dated April 14, 1999, on our audits of the consolidated financial
statements and financial statement schedule of Cumulus Media Inc. and
consolidated subsidiaries as of December 31, 1998 and 1997 and for the year
ended December 31, 1998 and for the period from May 22, 1997 (inception) through
December 31, 1997, which report is included in the 1998 Annual Report of Form
10-K.

PricewaterhouseCoopers LLP

Chicago, Illinois
April 14, 1999

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 24,885,000
<SECURITIES> 0
<RECEIVABLES> 28,951,000
<ALLOWANCES> 895,000
<INVENTORY> 0
<CURRENT-ASSETS> 55,749,000
<PP&E> 45,419,000
<DEPRECIATION> 3,981,000
<TOTAL-ASSETS> 517,631,000
<CURRENT-LIABILITIES> 19,816,000
<BONDS> 222,747,000
133,741,000
0
<COMMON> 198,000
<OTHER-SE> 124,937,000
<TOTAL-LIABILITY-AND-EQUITY> 517,631,000
<SALES> 0
<TOTAL-REVENUES> 108,172,000
<CGS> 0
<TOTAL-COSTS> 9,385,000
<OTHER-EXPENSES> 97,345,000
<LOSS-PROVISION> 864,000
<INTEREST-EXPENSE> 15,551,000
<INCOME-PRETAX> (11,738,000)
<INCOME-TAX> (126,000)
<INCOME-CONTINUING> (11,864,000)
<DISCONTINUED> 0
<EXTRAORDINARY> (1,837,000)
<CHANGES> 0
<NET-INCOME> (13,701,000)
<EPS-PRIMARY> (1.70)
<EPS-DILUTED> (1.70)

</TABLE>