INFINITY BROADCASTING CORP /DE/, S-1/A, 1998-11-12

INFINITY BROADCASTING CORP /DE/
S-1/A, 1998-11-12
RADIO BROADCASTING STATIONS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1998

REGISTRATION NO. 333-63727
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 3

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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INFINITY BROADCASTING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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<S> <C> <C>
DELAWARE 4832 13-4030071
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) NO.)
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40 WEST 57TH STREET
NEW YORK, NEW YORK 10019
TELEPHONE: (212) 314-9200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------

FARID SULEMAN
INFINITY BROADCASTING CORPORATION
40 WEST 57TH STREET
NEW YORK, NEW YORK 10019
TELEPHONE: (212) 314-9200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES TO:

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<S> <C>
MARC S. ROSENBERG, ESQ. VINCENT J. PISANO, ESQ.
CRAVATH, SWAINE & MOORE SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
825 EIGHTH AVENUE 919 THIRD AVENUE
NEW YORK, NEW YORK 10019 NEW YORK, NEW YORK 10022
(212) 474-1000 (212) 735-3000
</TABLE>

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
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If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE

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TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C>
Class A Common Stock, par value $.01 per share........ $3,415,500,000 $949,679(2)
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</TABLE>

(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(a) under the Securities Act of 1933, as amended.

(2) $834,170 of the fee was previously paid.

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2

EXPLANATORY NOTE

This Registration Statement contains two forms of prospectus: one to be
used in connection with an underwritten offering in the United States and Canada
(the "U.S. Prospectus") and one to be used in a concurrent underwritten offering
outside the United States and Canada (the "International Prospectus"). The U.S.
Prospectus and the International Prospectus are identical except for the front
and back cover pages and the section entitled "Underwriting." The form of U.S.
Prospectus is included herein and is followed by the alternate pages to be used
in the International Prospectus. The alternate pages for the International
Prospectus included herein are each labeled "Alternate Page for International
Prospectus." Final forms of each prospectus will be filed with the Securities
and Exchange Commission under Rule 424(b) under the Securities Act.

<PAGE> 3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED NOVEMBER 12, 1998

PROSPECTUS

135,000,000 SHARES

[INFINITY LOGO]

INFINITY BROADCASTING CORPORATION

CLASS A COMMON STOCK
------------------------

All of the shares of Class A Common Stock, par value $.01 per share, offered
hereby are being sold by Infinity Broadcasting Corporation (the "Company"). Of
the 135,000,000 shares of Class A Common Stock offered hereby, 114,750,000
shares are being offered for sale initially in the United States and Canada (the
"U.S. Offering") by the U.S. Underwriters and 20,250,000 shares are being
offered for sale initially in a concurrent offering outside the United States
and Canada (the "International Offering" and, together with the U.S. Offering,
the "Offerings") by the International Managers (collectively with the U.S.
Underwriters, the "Underwriters"). The initial public offering price and the
underwriting discount per share will be identical for both Offerings. See
"Underwriting."

Prior to the Offerings, there has been no public market for the Class A
Common Stock. It is currently estimated that the initial public offering price
of the Class A Common Stock offered hereby will be between $19 and $22 per
share. For a discussion of the factors considered in determining the initial
public offering price of the Class A Common Stock, see "Underwriting."

The Class A Common Stock has been approved for listing on the New York Stock
Exchange under the symbol "INF," subject to official notice of issuance.

(continued on page i)

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN MATERIAL
RISK FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE CLASS A
COMMON STOCK OFFERED HEREBY.
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
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Per Share................................... $ $ $
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Total(3).................................... $ $ $
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(1) The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting."

(2) Before deducting expenses payable by the Company estimated at $ .

(3) The Company has granted the U.S. Underwriters and the International Managers
options to purchase up to an additional 17,212,500 and 3,037,500 shares of
Class A Common Stock, respectively, in each case exercisable within 30 days
after the date hereof, solely to cover over-allotments, if any. If such
options are exercised in full, the total Price to Public, Underwriting
Discount and Proceeds to Company will be $ , $ and
$ , respectively. See "Underwriting."

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

The shares of Class A Common Stock are offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, subject
to approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected that
delivery of the shares of Class A Common Stock will be made in New York, New
York on or about , 1998.
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MERRILL LYNCH & CO.
BT ALEX. BROWN GOLDMAN, SACHS & CO.
ALLEN & COMPANY INCORPORATED CREDIT SUISSE FIRST BOSTON
DONALDSON, LUFKIN & JENRETTE LEHMAN BROTHERS MORGAN STANLEY DEAN WITTER

NATIONSBANC MONTGOMERY SECURITIES LLC SALOMON SMITH BARNEY

BEAR, STEARNS & CO. INC. DEUTSCHE BANK SECURITIES
ING BARING FURMAN SELZ LLC LAZARD FRERES & CO. LLC
PAINEWEBBER INCORPORATED SANFORD C. BERNSTEIN & CO., INC.
SCHRODER & CO. INC. SG COWEN

ABN AMRO ROTHSCHILD BANCBOSTON ROBERTSON STEPHENS CHASE SECURITIES INC.

A DIVISION OF ABN AMRO INCORPORATED

J.P. MORGAN & CO. WASSERSTEIN PERELLA SECURITIES, INC.

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

The date of this Prospectus is , 1998.
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INFINITY LOGO
<PAGE> 5

(continued from front cover)

Following the Offerings, the Company will have two classes of authorized
common stock, the Class A Common Stock and the Class B Common Stock, par value
$.01 per share. The rights of the holders of Class A Common Stock and Class B
Common Stock are substantially identical, except with respect to voting,
conversion and transfer. Each share of Class A Common Stock entitles its holder
to one vote, and each share of Class B Common Stock entitles its holder to five
votes, on all matters submitted to a vote of stockholders. CBS Corporation
beneficially owns all of the Company's outstanding Common Stock and will,
immediately after the Offerings, beneficially own all of the Company's issued
and outstanding Class B Common Stock. Immediately after consummation of the
Offerings (assuming no exercise of the over-allotment options granted to the
U.S. Underwriters and the International Managers), such Class B Common Stock
will represent approximately 96.3% of the combined voting power of the Company.
As a result of such ownership, CBS Corporation will be able to control the vote
on substantially all matters submitted to a vote of stockholders, including the
election of directors and the approval of extraordinary corporate transactions.
The net proceeds from the Offerings will be used to prepay debt owed to CBS. See
"Risk Factors -- Risks Relating to Control by CBS," "Use of Proceeds,"
"Principal Stockholder and Stock Ownership" and "Relationships Between the
Company and CBS."

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CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE CLASS A COMMON
STOCK. SUCH TRANSACTIONS MAY INCLUDE STABILIZATION, THE PURCHASE OF THE CLASS A
COMMON STOCK TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY
BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

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

The Company intends to furnish its stockholders annual reports containing
consolidated financial statements audited by an independent public accounting
firm and quarterly reports for the first three fiscal quarters of each fiscal
year containing interim unaudited financial information.

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For investors outside the United States: No action has been or will be
taken in any jurisdiction by the Company or by any Underwriter that would permit
a public offering of the Class A Common Stock or possession or distribution of
this Prospectus in any jurisdiction where action for that purpose is required,
other than in the United States. Persons into whose possession this Prospectus
comes are required by the Company and the Underwriters to inform themselves
about and to observe any restrictions as to the offering of the Class A Common
Stock and the distribution of this Prospectus.

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The "Infinity" name and mark and the Company's associated brand names and
logos are trade and service marks of the Company. The "CBS" name and mark and
the "eye" logo and CBS's associated brand names are trade and service marks of
CBS Corporation and its subsidiaries.

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FORWARD-LOOKING STATEMENTS; CERTAIN DEFINED TERMS

Certain statements made in this Prospectus under the captions "Prospectus
Summary," "Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Business" and "Relationships Between the
Company and CBS" and elsewhere in this Prospectus are forward-looking statements
that are not historical facts but rather reflect the Company's current
expectations concerning future results and events. The words "believes,"
"expects," "intends," "plans," "anticipates," "likely," "will" and similar
expressions identify such forward-looking statements. These forward-looking
statements are subject to risks, uncertainties and other factors, some of which
are beyond the Company's control, that could cause actual results to differ
materially from those forecast or anticipated in such forward-looking
statements.

Such risks, uncertainties and factors include, but are not limited to:
business conditions and growth in the radio broadcasting and outdoor advertising
industry and the general economy; competitive factors; changes in interest
rates; the failure or inability to renew one or more of the Company's broadcast
licenses; and the factors described in "Risk Factors."

Readers are cautioned not to place undue reliance on these forward-looking
statements which reflect management's view only as of the date of this
Prospectus. The Company undertakes no obligation to update such statements or
publicly release the result of any revisions to these forward-looking statements
which it may make to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.

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

As used herein, "Class A Common Stock" means the Class A Common Stock, $.01
par value per share, of the Company; "Class B Common Stock" means the Class B
Common Stock, $.01 par value per share, of the Company; "Common Stock" means the
Class A Common Stock and the Class B Common Stock; "Offerings" means the U.S.
Offering and the International Offering; "FCC" means the Federal Communications
Commission; "LMAs" means local marketing agreements which would be considered
time brokerage agreements ("TBAs") for FCC purposes; "NYSE" means the New York
Stock Exchange, Inc.; "Commission" means the Securities and Exchange Commission;
"Exchange Act" means the Securities Exchange Act of 1934, as amended; and
"Securities Act" means the Securities Act of 1933, as amended.

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere in
this Prospectus, including information under "Risk Factors." Throughout this
Prospectus, except where the context otherwise requires: (i) the term "CBS"
refers collectively to CBS Corporation and its direct and indirect subsidiaries
(other than the Company), and their respective predecessors; and (ii) the term
"Company" refers collectively to Infinity Broadcasting Corporation and its
direct and indirect subsidiaries and their respective predecessors. Except where
the context otherwise requires, all information in this Prospectus: (i) gives
effect to the amendment of the Company's Certificate of Incorporation to change
its authorized capital stock to Class A Common Stock, Class B Common Stock and
preferred stock, par value $.01 per share (the "Preferred Stock"); (ii) gives
effect to the conversion of each outstanding share of the Company's current
common stock, par value $1.00 per share, into 700,000 shares of its newly
created Class B Common Stock (see "Description of Capital Stock"); (iii) assumes
the Underwriters' over-allotment options, as described in "Underwriting," are
not exercised; and (iv) assumes an initial public offering price of $20.50 per
share of Class A Common Stock, which represents the mid-point of the range set
forth on the cover of this Prospectus.

THE COMPANY

The Company is one of the largest radio broadcasting and outdoor
advertising companies in the United States. The Company's 161 radio stations,
which serve 34 markets, collectively accounted for approximately 11% of total
1997 U.S. radio advertising expenditures. The Company's stations collectively
ranked first or second, in terms of 1997 pro forma radio revenues, in 28 out of
the 34 markets in which the Company operates stations. Approximately 70%, 87%
and 99% of the Company's pro forma 1997 net radio revenues were generated in the
10, 25 and 50 largest U.S. radio markets, respectively. The Company's outdoor
advertising business is conducted through its wholly owned subsidiary, TDI
Worldwide, Inc. ("TDI"). TDI is one of the largest outdoor advertising companies
in the United States, and operates predominantly in major metropolitan markets,
14 of which are also served by the Company's radio stations. TDI also operates
internationally with offices in the United Kingdom, the Republic of Ireland and
Northern Ireland.

The Company operates and seeks to opportunistically acquire radio and
outdoor, or "out-of-home," media properties in the largest markets in the United
States. The Company characterizes its business as out-of-home because the
majority of radio listening, and virtually all viewing of outdoor advertising,
takes place in automobiles, transit systems, on the street and other locations
outside the consumer's home. The Company believes that out-of-home media are an
attractive alternative to other advertising media, particularly as "in-home"
media, including broadcast television, cable and the Internet, increasingly
compete for advertising revenue in the home.

The Company's radio stations serve diverse target demographics through a
broad range of programming formats such as rock, oldies, news/talk, adult
contemporary, sports/talk and country, and the Company has established leading
franchises in news, sports and personality programming. The Company believes
that this diversity provides advertisers with "one-stop-shopping" by enabling
advertisers to select stations to reach a targeted demographic group or to
select groups of stations and outdoor advertising properties to reach broad
groups of consumers within and across markets. The Company believes that this
diversity also reduces its dependence on any single station, local economy,
format or advertiser.

CBS Corporation beneficially owns all of the Company's outstanding common
stock. After giving effect to the Offerings, CBS will beneficially own
approximately 83.8% of the equity, which will represent approximately 96.3% of
the combined voting power, of the Company. CBS also owns, among other assets, 14
television stations covering approximately 31% of U.S. television households,
several cable television networks and the CBS television network, as well as
equity interests in certain Internet Web site providers.

The Company was formed to own and operate the out-of-home media business of
CBS Corporation, which prior to December 1, 1997, was known as Westinghouse
Electric Corporation ("Westinghouse"). In

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November 1995, Westinghouse acquired CBS Inc. In December 1996, Westinghouse
acquired the former Infinity Broadcasting Corporation ("Old Infinity"), which
also owned TDI and had a minority equity interest in and managed Westwood One,
Inc. ("Westwood One"). On June 4, 1998, CBS acquired the radio broadcasting
operations of American Radio Systems Corporation ("American Radio"). Both Old
Infinity and American Radio were publicly traded companies prior to their
acquisition by Westinghouse and CBS, respectively. Prior to the Offerings, CBS
will have transferred substantially all its radio, outdoor advertising and
related assets to the Company.

Infinity Broadcasting Corporation is a corporation organized under the laws
of Delaware. Its principal executive offices are located at 40 West 57th Street,
New York, New York 10019, and its telephone number is (212) 314-9200.

BUSINESS STRATEGY AND COMPETITIVE STRENGTHS

Growth Potential for Out-of-Home Media. The Company believes that the
radio business has significant growth potential. Radio currently represents
approximately 7% of all advertising spending in the United States. The Company
believes that this market share may not yet fully reflect the operational
benefits which it expects will result from the consolidation that has taken
place in the radio business since the enactment of the Telecommunications Act of
1996 (the "Telecom Act"). The Telecom Act eliminated the national ownership
ceiling previously applicable to radio broadcasters and relaxed restrictions
previously applicable to ownership of radio stations within single markets,
providing an opportunity for increased consolidation within the radio industry.
The Company believes that this consolidation has made radio more competitive
with newspapers, television and other media which can deliver large audiences
across a wide range of demographics. The Company believes that the outdoor
advertising business has also become more competitive due to similar industry
consolidation. In addition, should the number and variety of in-home media
continue to increase (whether as a result of the introduction of new
technologies or otherwise), the Company believes that the smaller number of
media competing in the out-of-home market will provide it with a greater
competitive advantage than it has to date.

Focus on Large Market Assets. Approximately 94% of the Company's radio
stations are located in the 50 largest radio markets in the United States. As of
September 30, 1998, the Company owned 9 of the 16 highest billing radio stations
(measured by 1997 net revenues) in the United States. The Company believes that
this focus on large markets makes it more appealing to advertisers, enables it
to attract more highly skilled management, employees and on-air talent, and also
enables it to more efficiently manage its business and generate higher levels of
cash flow than would be the case if it managed a larger number of smaller
stations.

Strategic Acquisitions. While the Company does not believe that it needs
to make acquisitions to grow its business, it intends to pursue acquisition
opportunities that would enable it to continue to compete more effectively for
advertising revenues and to increase its growth rate of cash flow. As an
experienced operator of out-of-home media properties, the Company believes that
it will have opportunities to acquire additional properties and to improve their
operating performance. In general, the Company intends to pursue acquisitions of
radio stations primarily in the 50 largest radio markets in the United States.
This strategy may include acquiring radio stations in markets where the Company
currently owns stations, as well as in markets in which the Company does not
currently operate. The Company will also seek to acquire additional outdoor
properties both in the United States and internationally.

Diversification of Revenues. The Company seeks to maintain substantial
diversity among its stations in many respects. The geographically wide-ranging
stations serve diverse target demographics through a broad range of programming
formats such as rock, oldies, news/talk, adult contemporary, sports/talk and
country. This diversity reduces the Company's dependence on any particular
station, local economy, format, on-air personality or advertiser. Similarly, the
Company places an emphasis on increasing local and regional

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advertising revenues to avoid dependence on national advertising. During the
year ended December 31, 1997, the Company generated approximately 72% of its net
radio revenues from local and regional advertising.

Proven Management Team. The Company's four executive officers have more
than 70 years combined experience in the radio and outdoor advertising business,
and Mel Karmazin, the Company's Chairman, President and Chief Executive Officer,
and Farid Suleman, the Company's Executive Vice President, Chief Financial
Officer, Treasurer and Secretary, have worked together at the Company's
predecessors since 1986. The Company believes that this proven management team
is a significant competitive asset for the Company.

Cost Controls. The Company strives to maximize its stations' cash flow by
instituting strict financial reporting requirements and cost controls, directing
promotional activities, developing programming to improve the stations' appeal
to a targeted audience group and enhancing advertising sales efforts. While the
Company's local management is responsible for the day-to-day operations of each
station, corporate management is responsible for long-range planning,
establishing policies and procedures, maximizing cost savings where centralized
activity is appropriate, allocating resources and maintaining overall control of
the stations.

Programming. The overall mix of each station's programming is designed to
fit the station's specific format and serve its local community. The Company's
general programming strategy includes acquiring significant on-air talent,
sports franchises and news for its radio stations. The Company believes that
this strategy, in addition to developing loyal audiences for its radio stations,
creates the opportunity for the Company to obtain additional revenues from
syndicating such programming franchises to other radio stations. Similarly, the
Company's relationship with CBS gives it access to certain CBS programming.

RELATIONSHIPS WITH CBS

CBS beneficially owns all of the Company's outstanding common stock. After
the Offerings, CBS will beneficially own approximately 83.8% of the equity,
which will represent approximately 96.3% of the combined voting power, of the
Company. As a result of such ownership, CBS will be able to control the vote on
substantially all matters submitted to a vote of the Company's stockholders,
including the election of directors and the approval of extraordinary corporate
transactions.

The Company believes that it derives substantial benefits from its
relationships with CBS. CBS owns, among other assets, 14 television stations
covering approximately 31% of U.S. television households, several cable
television networks (including The Nashville Network and Country Music
Television) and the CBS television network, as well as equity interests in
certain Internet Web site providers. Through its affiliation with CBS, the
Company is able to offer its customers "one-stop shopping" in a broader array of
media and markets than that available to the Company's competitors. Because the
Company's Chief Executive Officer will also be the Chief Executive Officer of
CBS, the Company believes it is well positioned to identify and benefit from the
synergies between the Company's businesses and those of CBS.

After the Offerings, the relationship between CBS and the Company will be
governed by an Intercompany Agreement and a Tax Sharing Agreement. The
Intercompany Agreement will require CBS to make available to the Company the
services of Mr. Karmazin, the Company's Chairman, President and Chief Executive
Officer, and Mr. Suleman, the Company's Executive Vice President, Chief
Financial Officer, Treasurer and Secretary. CBS will also make available certain
services, including financial, tax and legal services, to the Company. The
Company will pay CBS its allocated costs for these management and other
services. The Intercompany Agreement also establishes certain principles
governing the allocation of marketing opportunities, costs and revenues, the
provision of promotional time and space, access to programming and other aspects
of the Company's operating relationship with CBS on terms that are generally
consistent with past practices between the parties. As a result of CBS's
controlling interest in the Company and their overlapping managements and boards
of directors, relationships between CBS and the Company will not always be on
arm's-length terms.

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On September 18, 1998, Old Infinity issued a floating rate promissory note
as a dividend to CBS, in the aggregate principal amount of $2.5 billion (the
"CBS Note"). The dividend was declared and paid in the form of the CBS Note, in
order to provide CBS with funds to be used for CBS's general corporate purposes.
The CBS Note is payable on September 18, 2003. The Company intends to use the
net proceeds of the Offerings to prepay the CBS Note, and any proceeds in excess
thereof will be used for the Company's general corporate purposes, including
working capital, repayment of debt and possible acquisitions. See "Use of
Proceeds."

For a more detailed discussion of the Company's relationships with CBS, see
"Risk Factors -- Risks Relating to Control by CBS" and "Relationships Between
the Company and CBS."

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THE OFFERINGS

Of the 135,000,000 shares of Class A Common Stock being offered hereby by
the Company, 114,750,000 shares are being offered initially in the United States
and Canada by the U.S. Underwriters and 20,250,000 shares are being offered
initially outside the United States and Canada by the International Managers.
See "Underwriting."

Class A Common Stock Offered by the
Company(1):

U.S. Offering........................ 114,750,000 shares

International Offering............... 20,250,000 shares

Total(1)..................... 135,000,000 shares

Common Stock to be Outstanding After
the Offerings:

Class A Common Stock(1)(2)........... 135,000,000 shares

Class B Common Stock(3).............. 700,000,000 shares

Total(1)(2).................. 835,000,000 shares

Voting Rights.......................... The Class A Common Stock and Class B
Common Stock vote as a single class
on all matters, except as otherwise
required by law, with each share of
Class A Common Stock entitling its
holder to one vote and each share of
Class B Common Stock entitling its
holder to five votes. All of the
shares of Class B Common Stock are
beneficially owned by CBS. After the
Offerings, CBS will beneficially own
shares of Common Stock having
approximately 96.3% of the combined
voting power of the outstanding
shares of Common Stock
(approximately 95.8% if the over-
allotment options are exercised in
full). See "Principal Stockholder
and Stock Ownership" and
"Description of Capital Stock."

Use of Proceeds........................ The Company intends to use the net
proceeds from the Offerings to
prepay the CBS Note, and any
proceeds in excess thereof will be
used for the Company's general
corporate purposes, including for
working capital, repayment of debt
and possible acquisitions. See "Use
of Proceeds."

Listing................................ The Class A Common Stock has been
approved for listing on the NYSE
under the symbol "INF," subject to
official notice of issuance.

- ---------------
(1) Does not include up to 17,212,500 and 3,037,500 shares subject to
over-allotment options granted by the Company to the U.S. Underwriters and
the International Managers, respectively.

(2) Excludes 19,750,000 shares of Class A Common Stock reserved for issuance
under the Company's 1998 Plan, Annual Incentive Plan and Savings Plans (each
as defined herein). See "Management -- Long-Term Incentives," "-- Annual
Incentives" and "-- Savings Plans."

(3) All of the Class B Common Stock will be beneficially owned by CBS.

RISK FACTORS

See "Risk Factors" for a description of certain risks to be considered
before making an investment in the Class A Common Stock.

5
<PAGE> 12

SUMMARY COMBINED AND PRO FORMA FINANCIAL DATA
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

The summary historical combined financial data of the Company presented
below as of December 31, 1996 and 1997, and for the years ended December 31,
1995, 1996 and 1997 have been derived from, and are qualified by reference to,
the audited Combined Financial Statements of the Company included elsewhere in
this Prospectus. The summary historical combined financial data of the Company
presented below as of September 30, 1998 and for the nine-month periods ended
September 30, 1997 and 1998 have been derived from, and are qualified by
reference to, the unaudited combined financial statements of the Company
included elsewhere in this Prospectus. The summary historical combined financial
data of the Company presented below as of December 31, 1993, 1994 and 1995 and
for the years ended December 31, 1993 and 1994 have been derived from unaudited
Combined Financial Statements of the Company not included in this Prospectus.
The summary combined financial data should be read in conjunction with
"Capitalization," "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Combined Financial Statements and the related
Notes thereto and the other financial information included elsewhere in this
Prospectus. The Company's unaudited financial statements as of September 30,
1998 and for the nine-month periods ended September 30, 1997 and 1998 include,
in the opinion of management, all adjustments, consisting only of normal
recurring adjustments, which the Company considers necessary for a fair
presentation of the financial position and results of operations of the Company
for these periods. Results for the nine-month periods are not necessarily
indicative of the results to be expected for the full year.

The summary pro forma statement of earnings and other operating data give
pro forma effect to the acquisition of American Radio and its acquisitions as if
they had taken place on January 1, 1997. The pro forma statement of earnings and
other operating data do not give pro forma effect to the issuance of the CBS
Note because it is expected to be substantially or entirely repaid from the
proceeds of the Offerings. The pro forma adjustments are based upon available
information and certain assumptions that management of the Company believes are
reasonable. The pro forma financial data do not purport to represent the results
of operations or the financial position of the Company which actually would have
occurred had the American Radio acquisition taken place on the date indicated,
nor are they necessarily indicative of future operating results. The summary pro
forma statement of earnings and other operating data should be read in
conjunction with "Unaudited Combined Pro Forma Financial Information."

YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
HISTORICAL PRO
------------------------------------------------------------ FORMA
1993 1994 1995 1996 1997 1997(1)
----------- ----------- -------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
DATA:
Net revenues............. $180,739 $174,722 $216,288 $554,088 $1,480,091 $1,873,413
Operating expenses
excluding depreciation
and amortization....... 113,908 103,456 136,419 343,920 888,405 1,147,155
Depreciation and
amortization........... 14,670 15,591 17,914 57,528 197,135 285,685
Corporate expenses....... 8,134 8,492 8,736 13,434 22,277 30,484
-------- -------- -------- -------- ---------- ----------
Operating earnings....... 44,027 47,183 53,219 139,206 372,274 410,089
Interest expense, net.... -- -- -- -- 3,645 50,639
Net earnings............. $28,243 $42,649 $27,673 $71,566 $177,629 $160,527
Net earnings per common
share -- basic and
diluted................ $0.04 $0.06 $0.04 $0.10 $0.25 $0.23
Weighted average shares
outstanding -- basic
and diluted............ 700,000 700,000 700,000 700,000 700,000 700,000

<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------------------------
HISTORICAL PRO
------------------------- FORMA
1997 1998 1998(1)
----------- ----------- -----------
<S> <C> <C> <C>
STATEMENT OF EARNINGS
DATA:
Net revenues............. $1,068,289 $1,319,690 $1,487,065
Operating expenses
excluding depreciation
and amortization....... 654,489 767,507 886,345
Depreciation and
amortization........... 149,061 177,249 214,356
Corporate expenses....... 16,881 13,145 18,615
---------- ---------- ----------
Operating earnings....... 247,858 361,789 367,749
Interest expense, net.... 3,519 22,038 41,843
Net earnings............. $115,967 $165,580 $155,713
Net earnings per common
share -- basic and
diluted................ $0.17 $0.24 $0.22
Weighted average shares
outstanding -- basic
and diluted............ 700,000 700,000 700,000
</TABLE>

(footnotes on following page)

6
<PAGE> 13
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
HISTORICAL PRO
------------------------------------------------------------ FORMA
1993 1994 1995 1996 1997 1997(1)
----------- ----------- -------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
OTHER OPERATING DATA:
EBITDA(2)................ $ 61,413 $ 93,095 $ 71,324 $197,043 $ 575,387 $ 703,751
Capital expenditures..... 3,438 7,843 9,368 6,682 15,264 17,311
After-tax Cash Flow(2)... 42,913 58,240 45,587 129,094 374,764 446,212
Cash flow from operating
activities............. 40,582 25,287 49,401 103,943 310,264 342,289
Cash flow from investing
activities............. (15,789) 3,976 (1,213,810) (1,000,847) 21,870 (406,697)
Cash flow from financing
activities............. (24,743) (29,131) 1,164,221 916,771 (329,494) 195,798

<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------------------------
HISTORICAL PRO
------------------------- FORMA
1997 1998 1998(1)
----------- ----------- -----------
<S> <C> <C> <C>
OTHER OPERATING DATA:
EBITDA(2)................ $ 397,489 $ 540,825 $ 584,141
Capital expenditures..... 9,818 19,793 23,372
After-tax Cash Flow(2)... 265,028 342,829 370,069
Cash flow from operating
activities............. 239,099 316,417 340,538
Cash flow from investing
activities............. 18,944 (1,397,696) (1,437,823)
Cash flow from financing
activities............. (251,003) 1,133,053 1,170,455
</TABLE>

<TABLE>
<CAPTION>
AT DECEMBER 31, AT SEPTEMBER 30, 1998
---------------------------------------------------------- -----------------------------
1993 1994 1995 1996 1997 ACTUAL AS ADJUSTED(3)
-------- -------- ---------- ---------- ---------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets..................... $477,568 $485,747 $1,878,208 $7,261,952 $7,074,103 $10,406,311 $10,563,111
Long-term debt (including current
portion)....................... -- -- -- 150,494 2,092 3,151,274 651,274
Stockholders' equity............. 454,813 511,453 1,659,602 6,418,701 6,397,388 5,831,054 8,487,854
Working capital.................. 29,668 32,238 79,500 273,403 247,206 350,098 506,898
</TABLE>

- ---------------
(1) The pro forma statement of earnings and other operating data give effect to:
(i) the Company's acquisition of American Radio; and (ii) American Radio's
acquisitions and dispositions in 1997 as if such transactions occurred at
January 1, 1997. See "Unaudited Combined Pro Forma Financial Information."
The pro forma statement of earnings and other operating data do not give
effect to the issuance by Old Infinity of the CBS Note because it is
expected to be substantially or entirely repaid from the net proceeds of the
Offerings. To the extent the net proceeds of the Offerings are not
sufficient to repay the CBS Note, additional interest expense would be
incurred. Based on current interest rates, approximately $6.0 million in
additional annual interest expense would result for every $100.0 million of
unpaid principal of the CBS Note.

(2) EBITDA represents earnings before interest, taxes, depreciation and
amortization. After-tax Cash Flow represents net earnings plus depreciation
and amortization. Although EBITDA and After-tax Cash Flow are not measures
of performance calculated in accordance with generally accepted accounting
principles, management believes that they are useful to an investor in
evaluating the Company because they are measures widely used in the
broadcast industry to evaluate a company's operating performance. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Use of EBITDA." Nevertheless, EBITDA and After-tax Cash Flow
should not be considered in isolation or as a substitute for operating
income, cash flows from operating activities or any other measure for
determining the Company's operating performance or liquidity that is
calculated in accordance with generally accepted accounting principles. As
EBITDA and After-tax Cash Flow are not measures of performance calculated in
accordance with generally accepted accounting principles, these measures may
not be comparable to similarly titled measures employed by other companies.
Management's discretionary use of funds depicted by EBITDA and After-tax
Cash Flow may be limited by working capital, debt service and capital
expenditure requirements and by restrictions related to legal requirements,
commitments and uncertainties.

(3) As adjusted to give effect to the Offerings and the application of the net
proceeds therefrom. See "Use of Proceeds."

7
<PAGE> 14

RISK FACTORS

Prospective purchasers should carefully consider the following factors, in
addition to the other information set forth in this Prospectus, in connection
with an investment in the shares of Class A Common Stock offered hereby.

RISKS RELATING TO CONTROL BY CBS

Immediately following the Offerings, CBS will continue to control the
Company and CBS will beneficially own 100% of the outstanding Class B Common
Stock, which will represent approximately 96.3% of the combined voting power of
all the outstanding Common Stock. As a result of this ownership, CBS generally
will be able to exercise a controlling influence over the business and affairs
of the Company, and to unilaterally determine the outcome of any matter
submitted to a vote of the Company's stockholders. See "-- Possible
Anti-Takeover Effects of Certain Charter Provisions."

Possible Conflicts of Interest. Because CBS and the Company are both
engaged in the sale of advertising time and space, there exist numerous actual
and potential conflicts of interest between them. The Company and CBS will to
some extent be competing with each other when offering their products and
services to potential customers, who often are deciding how much of their
advertising budgets to allocate to television, radio, outdoor or other media.
The Company's Restated Certificate of Incorporation (the "Restated Certificate")
contains certain provisions addressing potential conflicts of interest between
the Company and CBS and the allocation between the Company and CBS of certain
transactions that, absent such allocation, could constitute corporate
opportunities of both the Company and CBS. These provisions effectively create a
presumption that such opportunities need not be made available to the Company
absent a clear indication that they were directed to the Company. See "Certain
Provisions of the Certificate of Incorporation and By-Laws of the
Company -- Corporate Opportunity and Conflict of Interests Policies." In
addition, as a major advertiser, CBS from time to time utilizes the Company's
advertising time and space. Similarly, the Company promotes its programming on
stations and networks owned by CBS.

Prior to the Offerings, CBS and the Company will enter into the
Intercompany Agreement, which will, among other things, govern the terms on
which the parties will jointly market their products and services and provide
promotional advertising time and space to each other. In particular, in certain
circumstances consistent with past practice, the Intercompany Agreement will
permit CBS to continue to utilize radio promotion time without charge. The
Intercompany Agreement generally contemplates that the parties will maintain
their relationships in a manner consistent with their past practice. However,
neither the Intercompany Agreement nor any future agreements between the Company
and CBS resulted or will necessarily result from arm's-length negotiations and
such agreements therefore may be in some respects and in certain instances less
favorable to the Company than those that it could obtain from unaffiliated third
parties. Moreover, many of the transactions between the Company and CBS are of
an informal nature and do not lend themselves to formulaic allocations of costs
and benefits. Thus, there inevitably will be some discretion left to the
parties, who are subject to the potentially conflicting interests described
herein.

Risks Relating to Joint Management and Boards of Directors. Mr. Karmazin,
the Company's Chairman, President and Chief Executive Officer, and Mr. Suleman,
the Company's Executive Vice President, Chief Financial Officer, Treasurer and
Secretary, will continue to hold senior management positions with CBS after the
Offerings (in Mr. Karmazin's case, as Chief Executive Officer of CBS effective
January 1, 1999). These Company officers will be employed by CBS, rather than by
the Company, and will spend a substantial part of their professional time and
effort on behalf of CBS. In many instances, such efforts for CBS will relate to
activities which are unrelated (and in some circumstances may be adverse) to the
interests of the Company. The Company has not established any minimum time
requirements for such officers. In addition, Messrs. Karmazin and Suleman will
continue to participate in CBS stock option and other benefit plans and

8
<PAGE> 15

Mr. Karmazin is one of CBS's largest stockholders. The Company's other executive
officers and a significant number of its employees will continue to hold shares
of and/or options to purchase shares of common stock of CBS acquired or granted
prior to their transfer to the Company, and will not yet have received
comparable interests under the Company's plans. In addition, following the
Offerings, certain employees of the Company will continue to participate in CBS
benefit plans which provide an opportunity to receive additional shares of
common stock of CBS. These substantial interests in CBS's equity may present
these officers and employees with incentives different from those of the
Company's stockholders, and may exacerbate the conflicts described herein.

In addition, immediately following the Offerings, only two of the Company's
eight directors will be individuals who are not currently associated with CBS or
the Company. In addition to Messrs. Karmazin and Suleman, the Company expects
that its Board of Directors will include four non-management directors who will
also be officers or directors of CBS. For so long as CBS maintains voting
control of the Company, CBS will have the ability to change the size or
composition of the Board of Directors.

Mr. Karmazin is a Director of Westwood One and Mr. Suleman is the Chief
Financial Officer and Secretary and a Director of Westwood One, which positions
will continue to impose demands on their time and present potential conflicts of
interest following the Offerings. Westwood One produces and distributes
syndicated and network radio programming to the Company's radio stations as well
as to competitors of the Company. See "Business -- Programming."

Dependence upon CBS for Certain Services. Prior to the Offerings, the
Company has been dependent upon CBS for various real estate, financial, tax,
human resource, legal and other functions that typically are performed by
in-house personnel of public companies. Following the Offerings and for at least
some period of time thereafter, the Company will have to continue to rely on CBS
for these services, which are to be made available pursuant to the Intercompany
Agreement. Except as expressly required by the terms of the Intercompany
Agreement, CBS could choose not to provide these services or to take actions
which could result in increased allocations to the Company.

Proceeds of Offerings to be Used to Pay the CBS Note. The net proceeds
from the Offerings will be used to prepay the CBS Note. Therefore, it is
possible that none of the amounts raised in the Offerings will be available for
use in the Company's business.

CBS Credit Agreement. The Company does not currently have any independent
credit facilities with banks or other institutions. Prior to the Offerings, the
Company expects to become a borrower under CBS's existing $4.0 billion senior
unsecured revolving credit facility (the "CBS Credit Agreement"), pursuant to
which up to $1.0 billion will be available to the Company for revolving loans.

The terms of the CBS Credit Agreement impose restrictions on the ability of
CBS and its material subsidiaries (including the Company) to create liens, grant
negative pledges, sell assets and enter into affiliate transactions. In
addition, the terms of the CBS Credit Agreement significantly restrict the
Company's ability to incur additional debt, other than additional borrowings
under the CBS Credit Agreement (which are limited to $1 billion). The terms of
the CBS Credit Agreement require CBS to maintain specified financial ratios and
meet certain tests, including a maximum consolidated leverage ratio and minimum
interest coverage ratio and net worth. In addition, the occurrence of a change
of control of CBS would be an event of default under the CBS Credit Agreement.
Any event of default or declaration of acceleration under any debt instruments
of CBS in an aggregate amount in excess of $100 million could also result in an
event of default under the CBS Credit Agreement. The ability of CBS to comply
with the terms of the CBS Credit Agreement is beyond the control of the Company
and can be affected by events beyond CBS's control. Any defaults under the CBS
Credit Agreement (whether or not related to the business of the Company) could
preclude the Company from borrowing under the CBS Credit Agreement, and could
entitle the lenders to declare all amounts outstanding thereunder to be due and
payable immediately. See "Description of Indebtedness -- CBS Credit Agreement."
The Company may obtain an independent credit facility in the future.

Risks Relating to Tax Consolidation. For so long as CBS continues to own
80% of the vote and value of the Company's capital stock, the Company will be
included in CBS's consolidated group for federal income tax purposes. Under the
Tax Sharing Agreement, the Company will pay to CBS the amount of federal, state
and local income taxes which it would be required to pay to the relevant taxing
authorities if it were a separate

9
<PAGE> 16

taxpayer not included in CBS's consolidated or combined returns. In addition, by
virtue of its controlling ownership and the Tax Sharing Agreement, CBS will
effectively control all of the Company's tax decisions. Under the Tax Sharing
Agreement, CBS will have sole authority to respond to and conduct all tax
proceedings (including tax audits) relating to the Company, to file all income
tax returns on behalf of the Company and to determine the amount of the
Company's liability to (or entitlement to payment from) CBS under the Tax
Sharing Agreement. Moreover, notwithstanding the Tax Sharing Agreement, federal
law provides that each member of a consolidated group is liable for the group's
entire tax obligation. Thus, to the extent CBS or other members of the group
fail to make any federal income tax payments required of them by law, the
Company would be liable for the shortfall. Similar principles apply for state
income tax purposes in many states.

Contingent Liability for CBS Obligations. For so long as CBS continues to
own at least 80% of the voting power of the Company's capital stock, the Company
will be jointly and severally liable (together with all other members of CBS's
"control group") for certain pension funding, termination and excise taxes and
for other pension-related matters. Because the Class B Common Stock held by CBS
is entitled to five votes per share, the Company expects that CBS will retain
its 80% voting interest for the foreseeable future. As of December 31, 1997, the
present value of the liabilities under certain qualified pension plans,
including the Westinghouse Pension Plan, exceeded the fair market value of the
assets held in trust thereunder by approximately $740 million, based upon the
assumptions used for financial reporting purposes under Statement of Financial
Accounting Standards No. 87 and before any tax effect. CBS's liabilities and the
Company's contingent liabilities would be substantially higher under these plans
if such plans were terminated.

In addition, as of September 30, 1998, CBS had outstanding an aggregate of
approximately $2.6 billion principal amount of public debt issued pursuant to
indentures which under certain circumstances could effectively require a
transferee of assets from CBS (including the Company) to assume such debt. The
Company does not believe that such assumption is now required or likely to be
required in the future. Nevertheless, in the event that a CBS bondholder would
assert a claim requiring the Company to assume such debt, it is likely that such
matter would be the subject of litigation, which by its very nature is
unpredictable.

Although the Intercompany Agreement provides that CBS will indemnify the
Company in respect of any such pension liabilities or debt obligations
(including the costs of defending against any assertion of claims against the
Company by CBS bondholders), there can be no assurance that CBS will be able to
fulfill its obligations under such indemnity.

For a more complete discussion of the Company's relationships with CBS, see
"Relationships Between the Company and CBS."

RISK OF ECONOMIC RECESSION

The Company derives substantially all of its revenues from the sale of
advertising on its radio stations and outdoor displays. Because advertisers
generally reduce their spending during economic downturns, the Company could be
adversely affected by a future national recession. In addition, because a
substantial portion of the Company's revenues are derived from local
advertisers, the Company's ability to generate advertising revenues in specific
markets could be adversely affected by local or regional economic downturns.

RISKS RELATING TO ACQUISITION STRATEGY

The Company intends to pursue growth in part through the opportunistic
acquisition of radio broadcasting companies, radio station groups, individual
radio stations, outdoor advertising companies, individual outdoor advertising
displays or other assets that the Company believes are best suited to the
purpose of assisting its customers in marketing their products and services. The
Company routinely engages in discussions and negotiations with respect to
potential acquisitions. Such acquisitions could be material.

Obstacles to Potential Acquisitions. The consummation of radio
broadcasting acquisitions requires prior approval of the FCC with respect to the
transfer of control or assignment of the broadcast licenses of the acquired
stations. The number of radio stations the Company may acquire or operate in any
geographic

10
<PAGE> 17

market, both overall and in each service (i.e., AM or FM) in that market, is
limited by the Communications Act of 1934, as amended (the "Communications
Act"), and FCC rules and policies, and the Company has reached or is close to
reaching the applicable limits in a significant number of the largest markets.
The Company's capacity to acquire stations in a market would be further limited
to the extent CBS now owns or later acquires media properties in that market,
which CBS is free to do if otherwise permissible under FCC multiple ownership
rules and policies. See "-- Government Regulation -- Risks of Mandatory
Dispositions; "One-to-a-Market" Limitation" and "Business -- Government
Regulation."

The FCC staff has recently adopted new procedures relating to local radio
market concentration based upon revenue share, even where proposed acquisitions
would comply with the Communications Act and the FCC's multiple-ownership rules.
In particular, the FCC is inviting comment by the public on certain radio
station transactions that the FCC believes, on initial analysis, present
ownership concentration concerns in the relevant market. FCC approval of a
number of pending radio station acquisitions by various parties has been delayed
as a consequence of this procedure. This uncertainty, and the possibility that
the FCC would take actions to reduce or preclude concentration even if otherwise
allowed by the multiple ownership rules, could adversely affect the Company's
ability to make broadcasting acquisitions that it considers advantageous.

The consummation of certain radio acquisitions is also subject to
applicable waiting periods and possible review by the Department of Justice (the
"DOJ") or the Federal Trade Commission (the "FTC") under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act"), and acquisitions that are
not required to be reported under the HSR Act may still be investigated by the
DOJ or the FTC under the antitrust laws before or after consummation. The DOJ
has been active in reviewing radio broadcasting acquisitions and has challenged
a number of such transactions, some of which have resulted in consent decrees
requiring divestitures of certain stations, terminations of LMAs and other
relief. In general, the DOJ has more closely scrutinized radio mergers and
acquisitions that result in local market shares in excess of 40% of radio
advertising revenues, depending on format, signal strength and other factors.
Due to the level of concentration in the largest markets in the United States,
these policies could limit the Company's ability to make certain acquisitions,
particularly in these markets.

Other Acquisition-Related Risks. To the extent the Company is able to
complete acquisitions, the Company could be required to effectively manage an
expanding and significantly larger portfolio of radio and outdoor advertising
properties. Acquisitions involve numerous other risks, including difficulties in
the integration of operations and systems, the diversion of management's
attention from other business concerns and the potential loss of key employees
of acquired companies or stations. There can be no assurance that such
acquisitions will benefit the Company.

The Company will face competition from other radio and outdoor advertising
companies for available acquisition opportunities, which could result in higher
prices. There can be no assurances that the Company will find acceptable
acquisition opportunities. In addition, payment of the purchase price of
possible acquisitions could require the Company to incur additional debt or seek
to obtain equity financing. The incurrence of additional debt could increase the
Company's leverage, make the Company more vulnerable to economic downturns and
limit its ability to withstand competitive pressures. Additional equity
financing could result in dilution to the existing holders of the Common Stock.

GOVERNMENT REGULATION

Regulation of Radio Broadcasting. The domestic radio broadcasting industry
is subject to extensive federal regulation which, among other things, requires
approval by the FCC for the issuance, renewal, transfer and assignment of
broadcast station operating licenses and limits the number of broadcast
properties the Company may own in any market. The Company's broadcasting
business will continue to be dependent upon maintaining broadcast licenses
issued by the FCC, which are issued for a maximum term of eight years. There can
be no assurance that the FCC will approve future renewal applications, and it is
possible that any renewals will include conditions or qualifications that could
adversely affect the Company's operations. Moreover, governmental regulations
and policies may change over time and such changes could have a material adverse
impact upon the Company's business, financial condition and results of
operations. In addition, the Telecom

11
<PAGE> 18

Act, which became law on February 8, 1996, created uncertainties as to how the
FCC and the courts will enforce and interpret numerous existing provisions of
the telecommunications laws.

Restriction on Ownership by Aliens. The Communications Act provides that
non-U.S. citizens or their representatives, or foreign governments or
representatives thereof, or any corporation organized under the laws of a
foreign country (collectively, "Aliens") may not own of record or vote more than
20% of the stock of a broadcast licensee, such as the Company, and that Aliens
may not own of record or vote more than 25% of the stock of a corporation
controlling a licensee, absent a finding by the FCC that such ownership by a
controlling corporation would be in the public interest. In order to reduce the
likelihood of such ownership, the Restated Certificate restricts the ownership,
voting and transfer of the Company's capital stock in accordance with the
Communications Act and the rules of the FCC, and prohibits the issuance of more
than 20% of the Company's outstanding capital stock (or more than 20% of the
voting rights it represents) to or for the account of Aliens or corporations
otherwise subject to domination or control by Aliens. The Restated Certificate
authorizes the Company's Board of Directors to enforce these prohibitions. In
addition, the Restated Certificate provides that shares of capital stock of the
Company determined by the Company's Board of Directors to be owned beneficially
by an Alien or an entity directly or indirectly owned by Aliens in whole or in
part shall be subject to redemption by the Company by action of the Board of
Directors to the extent necessary, in the judgment of the Board of Directors, to
comply with these alien ownership restrictions. These provisions could adversely
affect the rights of individual holders and, possibly, liquidity in the market
for Class A Common Stock. See "Description of Capital Stock -- Class A Common
Stock and Class B Common Stock -- Foreign Ownership Restrictions."

Risks of Mandatory Station Dispositions; "One-to-a-Market"
Limitation. Under the FCC's "one-to-a-market" rule, a party may not have
attributable interests in radio stations and a television station in the same
market unless a waiver is granted by the FCC. For this purpose, the Company and
CBS are considered one party. CBS has been granted certain temporary waivers of
the "one-to-a-market" rule in certain markets in which the Company currently
operates radio stations. These temporary waivers are subject to the outcome of
pending rulemaking proceedings dealing with possible revisions to the
"one-to-a-market" rule. There can be no assurance that these temporary waivers
will be made permanent, and if they are not made permanent, the Company could be
required to sell some or all of the relevant radio stations. Moreover, similar
issues could arise in the future in connection with potential acquisitions
either by the Company or by CBS (over which the Company would have no control).
See "Business -- Government Regulation -- Ownership Matters."

Regulation of Outdoor Advertising. The outdoor advertising industry is
subject to governmental regulation at the federal, state and local level. These
include regulations on the construction, repair, upgrading, height, size and
location of, and, in some instances, content of advertising copy being displayed
on, outdoor advertising structures adjacent to federally-aided highways and to
other thoroughfares. In addition, the Company is unable to predict what
additional regulations may be imposed on outdoor advertising in the future.
Legislation regulating the content of billboard advertisements and additional
billboard restrictions has been introduced from time to time in the past,
particularly with respect to alcohol and tobacco advertising. Changes in laws
and regulations affecting outdoor advertising at any level of government could
have an adverse effect on the Company.

COMPETITION; CHANGES IN AUDIENCE PREFERENCES

The Company operates in a highly competitive industry. The Company's radio
stations and outdoor advertising properties compete for audiences and
advertising revenues directly with other radio stations and outdoor advertising
companies, as well as with other media, such as broadcast television,
newspapers, magazines, cable television, the Internet and direct mail, within
their respective markets. Audience ratings and market shares are subject to
change and any adverse change in a particular market could have a material
adverse effect on the Company's revenues in that market and possibly adversely
affect revenues in other markets. In addition, from time to time other stations
may change their format or programming to compete directly with the Company's
stations for audiences and advertisers, or engage in aggressive promotional
campaigns, which could result in lower ratings and advertising revenues or
increased promotion and other expenses and, consequently, lower earnings and
cash flow for the Company. Audience preferences as to format

12
<PAGE> 19

or programming may also shift due to demographic or other reasons. Any failure
by the Company to respond, or to respond as quickly as its competitors, could
have an adverse effect on the Company. There can be no assurance that the
Company will be able to maintain or increase its current audience ratings and
advertising revenues.

SIGNIFICANT SUBSIDIARY DEBT COVENANTS

Certain of the indentures pursuant to which American Radio issued bonds
contain a number of covenants which impose significant restrictions on American
Radio's ability to pay dividends to the Company and to engage in business
transactions with other parts of the Company and CBS. On a pro forma basis,
American Radio would have represented 21% and 18% of the Company's net revenues
and EBITDA, respectively, during the year ended December 31, 1997. The bonds are
not fully redeemable until January 15, 2002, and then only at a substantial
premium. See "Description of Indebtedness."

DEPENDENCE ON KEY PERSONNEL

The Company's business is dependent upon the performance of Mr. Karmazin,
its Chairman, President and Chief Executive Officer. The loss of Mr. Karmazin,
who is an employee of CBS and whose services are made available to the Company
pursuant to the Intercompany Agreement, could have a material adverse effect on
the Company. The Company also employs or independently contracts with several
on-air personalities and hosts of syndicated radio programs with significant
loyal audiences in their respective broadcast areas. There can be no assurance
that all such individuals will remain with the Company or will retain their
audiences.

LOSS OF RIGHTS TO OUTDOOR ADVERTISING MEDIA SPACES

The Company sells advertising space on various outdoor media pursuant to
contracts granting exclusive rights to such media. These contracts are generally
limited to five-year terms, with renewal often being based upon competitive
bids. There can be no assurance that the Company will be successful in retaining
the rights to such media, the loss of which could have a material adverse effect
on the Company.

SUBSTANTIAL LEVEL OF INDEBTEDNESS

The Company has a substantial amount of outstanding indebtedness. As of
September 30, 1998, after giving pro forma effect to the Offerings, the
consolidated indebtedness of the Company would have been approximately $651
million ($648 million of which would have been outstanding indebtedness of
American Radio). Prior to the Offerings, the Company expects to become a
borrower under the CBS Credit Agreement, pursuant to which up to $1.0 billion
will be available to the Company for revolving loans. See "Description of
Indebtedness." The Company's level of indebtedness could have important
consequences to the holders of Class A Common Stock, including the following:
(i) a substantial portion of the Company's cash flow from operations must be
dedicated to the payment of the principal of and interest on its indebtedness
and will not be available for other purposes; (ii) the ability of the Company to
obtain financing in the future for working capital needs, capital expenditures,
acquisitions, investments, general corporate purposes or other purposes may be
materially limited or impaired; and (iii) the Company's level of indebtedness
may reduce the Company's flexibility to respond to changing business and
economic conditions.

RISKS RELATED TO AMERICAN RADIO ACQUISITION; RECENT NET LOSSES

On June 4, 1998, CBS acquired the radio broadcasting operations of American
Radio. This acquisition involves several risks, including increased debt service
requirements, compliance with FCC multiple ownership rules and policies,
difficulties in integrating the operations and systems of American Radio into
the Company's business and the diversion of management's attention from other
business concerns. There can be no assurance that the Company's management will
be able to manage effectively the resulting business or that this acquisition
will benefit the Company. See "-- Risks Relating to Acquisition Strategy" and
"-- Government Regulation -- Risks of Mandatory Station Dispositions;
"One-to-a-Market" Limitation."

For the year ended December 31, 1997, and the three-month period ended
March 31, 1998, American Radio realized a net loss from continuing operations of
$4.1 million and $3.9 million, respectively. There can

13
<PAGE> 20

be no assurance that the broadcast business of American Radio will not continue
to generate net losses in the future.

RISKS RELATED TO THE YEAR 2000

Many existing computer programs were designed and developed without
considering the upcoming change in the century, which could lead to the failure
of computer applications or create erroneous results by or at the year 2000. The
Year 2000 issue is a broad business issue, whose impact extends beyond
traditional computer hardware and software to possible failure of a wide variety
of automated systems and instrumentation, including equipment used by the
Company and its third party vendors.

The Company believes that it has substantially completed the process of
assessing its systems and equipment and it is now engaged in remediation
efforts. The Company estimates its cost to achieve Year 2000 compliance to be
approximately $5 million, of which $2 million has been incurred to date. CBS is
expected to incur additional costs of approximately $2 million on behalf of the
Company to ensure compliance of the management information systems
infrastructure. Approximately 60% of the total expenditures relate to the
replacement of existing systems. The Company expects to fund these costs through
its cash flows from operations. However, there can be no assurance that the
Company will be able to successfully address all Year 2000 issues, or that the
associated costs will not materially exceed the Company's estimates. If the
Company is unable to resolve its Year 2000 issues in a timely manner, it could
have a material adverse impact on the Company's financial position, results of
operations or cash flows in future periods.

In addition, the Company has begun to contact significant third-party
suppliers and customers to determine whether such third parties are addressing
their own Year 2000 issues. There can be no assurance that such third parties
will successfully ensure that their systems are Year 2000 compliant. If the
Company's suppliers are unable to resolve such issues in a timely manner with
respect to equipment or services upon which the Company is dependent, or if
customers' businesses are significantly disrupted by Year 2000 problems, there
could be material adverse effects on the Company. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Year 2000."

RISKS PRESENTED BY NEW TECHNOLOGIES

The FCC is considering ways to introduce new technologies to the radio
broadcasting industry, including satellite and terrestrial delivery of digital
audio broadcasting and the standardization of available technologies which
significantly enhance the sound quality of AM and FM broadcasts. New media
technologies that are being developed or introduced include the delivery of
audio programming by cable television systems, over the Internet, by digital
audio broadcasting ("DAB") and by satellite digital audio radio service
("SDARS"). DAB and SDARS provide for the delivery by terrestrial and satellite
means, respectively, of multiple new, high-quality audio programming formats to
local and national audiences. DAB technology may be used in the future by radio
stations either on existing or alternate broadcasting frequencies or on new
frequency bands. If the radio industry were to implement any of these or other
new technologies, the Company would likely incur increased expenses to install,
operate and service the technology, or be at a competitive disadvantage for
having failed to do so. CBS owns (and is not transferring to the Company) a
majority equity interest in, and is the managing general partner of, USA Digital
Radio L.P., which was formed to develop technology to transition AM and FM radio
broadcasting from analog to digital transmission (including In Band On Channel 8
technology).

ABSENCE OF DIVIDENDS

Following the Offerings, the Company does not anticipate paying any
dividends on shares of its Common Stock. The payment of any future dividends
will be determined by the Board of Directors in light of the conditions then
existing, including the Company's financial condition and requirements, future
prospects, business conditions and other factors deemed relevant by the Board of
Directors. In addition, the Company's future financing documents may contain
provisions which restrict the payment of dividends. See "Dividend Policy,"
"Description of Capital Stock" and "Description of Indebtedness."

14
<PAGE> 21

POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER PROVISIONS

As the Company's controlling stockholder, CBS will be in a position to
block any acquisition of the Company, even if it would be on terms favorable to
the other stockholders. Because the Class B Common Stock is entitled to five
votes per share on all matters submitted to a vote of the stockholders (as
compared to one vote per share for the Class A Common Stock), CBS will be able
to maintain a control position even if its economic interest is substantially
diluted. See "-- Risks Relating to Control by CBS." Certain other provisions of
the Restated Certificate and the Restated By-Laws of the Company (the "Restated
By-Laws") also may make it more difficult for a third party to acquire control
of the Company. These provisions include: (i) the availability of authorized but
unissued shares of Preferred Stock for issuance from time to time at the
discretion of the Board of Directors; (ii) prohibitions against stockholders
calling a special meeting of stockholders or acting by written consent in lieu
of a meeting; (iii) the classification of the Board of Directors into three
classes, each of which will serve for different three-year periods; (iv) a
requirement pursuant to Section 141 of the General Corporation Law of the State
of Delaware (the "DGCL"), that, due to the classification of the Board of
Directors, directors of the Company may only be removed for cause; (v) a
requirement that certain provisions of the Restated Certificate may be amended
only with the approval of the holders of at least 80% of the combined voting
power of the Common Stock then outstanding; (vi) requirements for advance notice
for raising business or making nominations at stockholders' meetings; and (vii)
the ability of the Board of Directors to increase the size of the Board of
Directors and to appoint directors to fill newly created directorships. See
"Certain Provisions of the Certificate of Incorporation and By-Laws of the
Company -- Potential Limits on Change of Control."

RISKS RELATING TO POTENTIAL DISTRIBUTION OF CLASS B COMMON STOCK

Each share of the Class B Common Stock will automatically convert into one
share of Class A Common Stock upon its transfer by CBS or its affiliates to any
person other than CBS or its affiliates. However, if CBS were to distribute its
Class B Common Stock to its stockholders in a Tax-Free Spin-Off (as defined in
"Description of Capital Stock"), the Class B Common Stock would, absent an
amendment to the Restated Certificate, continue to entitle the holders thereof
to five votes per share and would not be convertible into shares of Class A
Common Stock. The distribution of shares of Class B Common Stock in a Tax-Free
Spin-Off could have an adverse effect on the market price of the Class A Common
Stock. CBS has agreed that if it distributes the Class B Common Stock to its
stockholders in a Tax-Free Spin-Off, prior to the Tax-Free Spin-Off it will
amend the Restated Certificate to provide for the automatic conversion of shares
of Class B Common Stock into shares of Class A Common Stock at a specified time
following the Tax-Free Spin-Off, if CBS determines that such conversion would be
consistent with qualification of the transaction as a Tax-Free Spin-Off. No
assurance can be given that such amendment or conversion will occur.

ABSENCE OF PRIOR TRADING MARKET; POTENTIAL VOLATILITY OF STOCK PRICE

There has not been a public market for the Class A Common Stock. The Class
A Common Stock has been approved for listing on the NYSE under the symbol "INF,"
subject to official notice of issuance. The Company does not know the extent to
which investor interest in the Company will lead to the development of a trading
market or how liquid that market might be. The initial public offering price for
the shares of Class A Common Stock was determined through negotiations between
the Company and representatives of the Underwriters. See "Underwriting."
Investors may not be able to resell their shares at or above the initial public
offering price due to a number of factors, including variations in actual or
anticipated operating results, changes in or failure to meet earnings estimates
of securities analysts, market conditions in the industry, regulatory actions
and general economic conditions.

In addition, in recent years, the stock market has experienced extreme
price fluctuations, sometimes without regard to the performance of particular
companies. Broad market and industry fluctuations may adversely affect the
trading price of the Class A Common Stock, regardless of the actual operating
performance of the Company.

15
<PAGE> 22

SHARES ELIGIBLE FOR FUTURE SALE

The market price of the Class A Common Stock could drop as a result of
sales of a large number of shares of Class A Common Stock in the market after
the Offerings, or the perception that such sales could occur. These factors also
could make it more difficult for the Company to raise funds through future
offerings of Class A Common Stock.

Upon consummation of the Offerings, there will be outstanding 135,000,000
shares of Class A Common Stock and 700,000,000 shares of Class B Common Stock.
The shares of Class A Common Stock sold in the Offerings will be freely tradable
without restriction, except for any shares acquired by an "affiliate" of the
Company (which can be sold under Rule 144, subject to certain volume and other
limitations). All of the shares of Class B Common Stock will be beneficially
owned by CBS. The Class B Common Stock is convertible into Class A Common Stock
at any time at CBS's option. Although it is an affiliate of the Company, CBS
nevertheless could sell substantial amounts of Common Stock pursuant to Rule 144
and it could cause the Company to register some or all of its shares for public
sale. See "Relationships Between the Company and CBS" and "Shares Eligible for
Future Sale."

DILUTION

Purchasers of the Class A Common Stock will experience immediate and
substantial dilution in net tangible book value of $21.59 per share (or $21.56
per share if the Underwriters' over-allotment options are exercised in full) of
Common Stock from the initial public offering price. See "Dilution."

USE OF PROCEEDS

The net proceeds to the Company from the sale of the Class A Common Stock
offered hereby, after deducting the underwriting discount and estimated offering
expenses payable by the Company, are estimated to be approximately $2.7 billion
(approximately $3.1 billion if the Underwriters' over-allotment options are
exercised in full), assuming an initial public offering price of $20.50 per
share, which represents the mid-point of the range set forth on the cover of
this Prospectus.

The Company intends to use the net proceeds from the Offerings to prepay
the CBS Note, and any proceeds in excess thereof will be used for the Company's
general corporate purposes, including for working capital, repayment of debt and
possible acquisitions. The CBS Note bears interest at a rate per annum equal to
the three-month London Interbank Offered Rate ("LIBOR") plus 0.50% and will
mature on September 18, 2003. Unless net proceeds from the Offerings exceed
amounts due in respect of the CBS Note, none of the amounts raised in the
Offerings will be available for use in the Company's business.

DIVIDEND POLICY

Following the Offerings, the Company does not anticipate paying any
dividends on shares of Common Stock. The payment of any future dividends will be
determined by the Board of Directors in light of the conditions then existing,
including the Company's financial condition and requirements, future prospects,
business conditions and other factors deemed relevant by the Board of Directors.

The Company may enter into future loan or other agreements or issue debt
securities or preferred shares which may restrict the payment of dividends. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and "Description of
Indebtedness."

16
<PAGE> 23

DILUTION

Dilution is the amount by which the initial public offering price per share
paid by the purchasers of the shares of Class A Common Stock will exceed the net
tangible book value per share of Common Stock after the Offerings. The net
tangible book value per share of Common Stock is determined by subtracting the
total liabilities of the Company from the total book value of the tangible
assets of the Company on a consolidated basis and dividing the difference by the
number of shares of Common Stock deemed to be outstanding on the date on which
such book value is determined. The following tables assume that the
Underwriters' over-allotment options have not been exercised.

As of September 30, 1998, the Company had a deficit in net tangible book
value of $3,566 million. After giving effect to the Offerings and the
application of the net proceeds therefrom, the pro forma deficit in net tangible
book value of the Common Stock as of September 30, 1998, would have been
approximately $909 million, or $1.09 per share. This represents an immediate
increase in net tangible book value of $4.00 per share to CBS (the Company's
existing beneficial stockholder) and an immediate dilution in net tangible book
value of $21.59 per share to new investors. The following table illustrates such
per share dilution:

<TABLE>
<S> <C> <C>
Initial public offering price per share..................... $20.50
Deficit in net tangible book value per share as of
September 30, 1998..................................... $5.09
Increase in net tangible book value per share attributable
to the Offerings....................................... 4.00
-------
Pro forma deficit in net tangible book value per share as of
September 30, 1998, after giving effect to the
Offerings................................................. 1.09
-------
Immediate dilution per share to new investors in the
Offerings................................................. $21.59
=======
</TABLE>

The following table sets forth, on a pro forma basis, as of September 30,
1998, the number of shares of Class B Common Stock purchased from the Company,
the total consideration paid to the Company and the average price per share paid
to the Company by CBS, as the existing beneficial stockholder, and by the
investors purchasing shares of Class A Common Stock (before deducting
underwriting discounts and commissions and offering expenses) pursuant to the
Offerings.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------------- ------------------------- AVERAGE
NUMBER AMOUNT PRICE
(IN THOUSANDS) PERCENT (IN THOUSANDS) PERCENT PER SHARE
-------------- ------- -------------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholder(1)............. 700,000 83.8% $5,831,054 67.8% $ 8.33
New investors....................... 135,000 16.2 2,767,500 32.2 20.50
-------- ----- ---------- -----
Total..................... 835,000 100.0% $8,598,554 100.0%
======== ===== ========== =====
</TABLE>

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

(1) After giving effect to the conversion of 1,000 shares of common stock of the
Company into 700,000,000 shares of Class B Common Stock.

The calculations in the above tables exclude 19,750,000 shares of Class A
Common Stock reserved for issuance under the Company's 1998 Plan, Annual
Incentive Plan and Savings Plans. See "Management -- Long-Term Incentives,"
"-- Annual Incentives" and "-- Savings Plans."

17
<PAGE> 24

CAPITALIZATION

The following table sets forth: (i) the actual capitalization of the
Company as of September 30, 1998; and (ii) the capitalization of the Company as
of September 30, 1998, as adjusted to give effect to the sale of 135,000,000
shares of Class A Common Stock in the Offerings and the application of the net
proceeds therefrom, assuming that the Underwriters' over-allotment options have
not been exercised. See "Use of Proceeds." This table should be read in
conjunction with "Selected Combined and Pro Forma Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Combined Financial Statements of the Company and the related Notes thereto
included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1998
---------------------
ACTUAL AS ADJUSTED
------ -----------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Cash and cash equivalents................................... $ 74 $ 231
====== ======

Long-term debt(1)........................................... $ 651 $ 651
CBS Note.................................................... 2,500 --

Stockholders' equity:
Preferred Stock, $.01 par value per share,
50,000,000 shares authorized, zero and zero shares
issued and outstanding................................ -- --
Class A Common Stock, $.01 par value per share,
2,000,000,000 shares authorized, zero and
135,000,000 shares issued and outstanding(2)........... -- 1
Class B Common Stock, $.01 par value per share,
2,000,000,000 shares authorized, zero and
700,000,000 shares issued and outstanding.............. -- 7
Contributed capital in excess of par value................ 5,831 8,480
Accumulated earnings...................................... -- --
------ ------
Total stockholders' equity........................ 5,831 8,488
------ ------
Total capitalization........................................ $8,982 $9,139
====== ======
</TABLE>

- ---------------
(1) Excludes the CBS Note and current portion of long-term debt (aggregating
$0.7 million as of September 30, 1998). For information concerning the
Company's long-term debt, see Note 9 to the Company's Combined Financial
Statements. Prior to the Offerings, the Company expects to become a borrower
under CBS's existing $4.0 billion revolving credit facility, pursuant to
which up to $1.0 billion will be available to the Company for revolving
loans. See "Description of Indebtedness -- CBS Credit Agreement."

(2) Excludes an aggregate of 19,750,000 shares of Class A Common Stock reserved
for issuance under the Company's 1998 Plan, Annual Incentive Plan and
Savings Plans. See "Management -- Long-Term Incentives," "-- Annual
Incentives" and "-- Savings Plans."

18
<PAGE> 25

SELECTED COMBINED AND PRO FORMA FINANCIAL DATA
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

The selected historical combined financial data of the Company presented
below as of December 31, 1996 and 1997, and for the years ended December 31,
1995, 1996 and 1997 have been derived from, and are qualified by reference to,
the audited Combined Financial Statements of the Company included elsewhere in
this Prospectus. The selected historical combined financial data of the Company
presented below as of September 30, 1998 and for the nine-month periods ended
September 30, 1997 and 1998 have been derived from, and are qualified by
reference to, the unaudited combined financial statements of the Company
included elsewhere in this Prospectus. The selected historical combined
financial data of the Company presented below as of December 31, 1993, 1994 and
1995 and for the years ended December 31, 1993 and 1994 have been derived from
unaudited Combined Financial Statements of the Company not included in this
Prospectus. The selected combined financial data should be read in conjunction
with "Capitalization," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Combined Financial Statements and
the related Notes thereto and the other financial information included elsewhere
in this Prospectus. The Company's unaudited financial statements as of September
30, 1998 and for the nine-month periods ended September 30, 1997 and 1998
include, in the opinion of management, all adjustments, consisting only of
normal recurring adjustments, which the Company considers necessary for a fair
presentation of the financial position and results of operations of the Company
for these periods. Results for the nine-month periods are not necessarily
indicative of the results to be expected for the full year.

The selected pro forma statement of earnings and other operating data give
pro forma effect to the acquisition of American Radio and its acquisitions as if
they had taken place on January 1, 1997. The pro forma statement of earnings and
other operating data do not give pro forma effect to the issuance of the CBS
Note because it is expected to be substantially or entirely repaid from the
proceeds of the Offerings. The pro forma adjustments are based upon available
information and certain assumptions that management of the Company believes are
reasonable. The pro forma financial data do not purport to represent the results
of operations or the financial position of the Company which actually would have
occurred had the American Radio acquisition taken place on the date indicated,
nor are they necessarily indicative of future operating results. The selected
pro forma statement of earnings and other operating data should be read in
conjunction with "Unaudited Combined Pro Forma Financial Information."

YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
HISTORICAL PRO
------------------------------------------------------ FORMA
1993 1994 1995 1996 1997 1997(1)
-------- -------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS DATA:
Net revenues................... $180,739 $174,722 $216,288 $554,088 $1,480,091 $1,873,413
Operating expenses excluding
depreciation and
amortization................. 113,908 103,456 136,419 343,920 888,405 1,147,155
Depreciation and
amortization................. 14,670 15,591 17,914 57,528 197,135 285,685
Corporate expenses............. 8,134 8,492 8,736 13,434 22,277 30,484
-------- -------- -------- -------- ---------- ----------
Operating earnings............. 44,027 47,183 53,219 139,206 372,274 410,089
Interest expense, net.......... -- -- -- -- 3,645 50,639
Net earnings................... $28,243 $42,649 $27,673 $71,566 $177,629 $160,527
Net earnings per common
share -- basic and diluted... $0.04 $0.06 $0.04 $0.10 $0.25 $0.23
Weighted average shares
outstanding -- basic and
diluted...................... 700,000 700,000 700,000 700,000 700,000 700,000

<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------------------
HISTORICAL PRO
----------------------- FORMA
1997 1998 1998(1)
---------- ---------- ----------
<S> <C> <C> <C>
STATEMENT OF EARNINGS DATA:
Net revenues................... $1,068,289 $1,319,690 $1,487,065
Operating expenses excluding
depreciation and
amortization................. 654,489 767,507 886,345
Depreciation and
amortization................. 149,061 177,249 214,356
Corporate expenses............. 16,881 13,145 18,615
---------- ---------- ----------
Operating earnings............. 247,858 361,789 367,749
Interest expense, net.......... 3,519 22,038 41,843
Net earnings................... $115,967 $165,580 $155,713
Net earnings per common
share -- basic and diluted... $0.17 $0.24 $0.22
Weighted average shares
outstanding -- basic and
diluted...................... 700,000 700,000 700,000
</TABLE>

(footnotes on following page)

19
<PAGE> 26
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
HISTORICAL PRO
------------------------------------------------------------ FORMA
1993 1994 1995 1996 1997 1997(1)
-------- -------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
OTHER OPERATING DATA:
EBITDA(2)................. $ 61,413 $ 93,095 $ 71,324 $ 197,043 $ 575,387 $ 703,751
Capital expenditures...... 3,438 7,843 9,368 6,682 15,264 17,311
After-tax Cash Flow(2).... 42,913 58,240 45,587 129,094 374,764 446,212
Cash flow from operating
activities.............. 40,582 25,287 49,401 103,943 310,264 342,289
Cash flow from investing
activities.............. (15,789) 3,976 (1,213,810) (1,000,847) 21,870 (406,697)
Cash flow from financing
activities.............. (24,743) (29,131) 1,164,221 916,771 (329,494) 195,798

<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------------------
HISTORICAL PRO
----------------------- FORMA
1997 1998 1998(1)
---------- ---------- ----------
<S> <C> <C> <C>
OTHER OPERATING DATA:
EBITDA(2)................. $ 397,489 $ 540,825 $ 584,141
Capital expenditures...... 9,818 19,793 23,372
After-tax Cash Flow(2).... 265,028 342,829 370,069
Cash flow from operating
activities.............. 239,099 316,417 340,538
Cash flow from investing
activities.............. 18,944 (1,397,696) (1,437,823)
Cash flow from financing
activities.............. (251,003) 1,133,053 1,170,455
</TABLE>

<TABLE>
<CAPTION>
AT DECEMBER 31, AT SEPTEMBER 30, 1998
---------------------------------------------------------- ----------------------------
1993 1994 1995 1996 1997 ACTUAL AS ADJUSTED(3)
-------- -------- ---------- ---------- ---------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets.......................... $477,568 $485,747 $1,878,208 $7,261,952 $7,074,103 $10,406,311 $10,563,111
Long-term debt (including current
portion)............................ -- -- -- 150,494 2,092 3,151,274 651,274
Stockholders' equity.................. 454,813 511,453 1,659,602 6,418,701 6,397,388 5,831,054 8,487,854
Working capital....................... 29,668 32,238 79,500 273,403 247,206 350,098 506,898
</TABLE>

(3) As adjusted to give effect to the Offerings and the application of the net
proceeds therefrom. See "Use of Proceeds."

20
<PAGE> 27

UNAUDITED COMBINED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma financial information is based on the
historical financial statements of the Company and American Radio and has been
prepared to describe the effects of the following: (i) the Company's acquisition
of the radio operations of American Radio; (ii) American Radio's acquisitions
and dispositions of radio stations during the years ended December 31, 1997, and
the nine months ended September 30, 1998; and (iii) related financing
transactions.

The acquisition of American Radio was accounted for using the purchase
method. The acquisition was completed on June 4, 1998 and, accordingly, has been
reflected in the historical combined balance sheet as of September 30, 1998 and
the results of operations have been included subsequent to the acquisition. The
unaudited pro forma combined statements of earnings give effect to the
acquisition of American Radio as if such transaction had been completed on
January 1, 1997.

During 1997 and 1998, American Radio made certain acquisitions and
dispositions of radio stations. The pro forma adjustments give effect to such
transactions as if they had occurred on January 1, 1997.

The Unaudited Combined Pro Forma Financial Information does not purport to
present the actual results of operations of the Company if the acquisition of
American Radio and its acquisitions had occurred on January 1, 1997, nor are
they necessarily indicative of the results of operations that may be achieved in
the future. The Unaudited Combined Pro Forma Financial Information is based on
certain assumptions and adjustments described in the notes hereto and should be
read in conjunction therewith. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations," the Combined Financial
Statements of the Company and Notes thereto and the Consolidated Financial
Statements of American Radio and Notes thereto included elsewhere in this
Prospectus.

21
<PAGE> 28

INFINITY BROADCASTING CORPORATION

UNAUDITED COMBINED PRO FORMA STATEMENT OF EARNINGS
NINE MONTHS ENDED SEPTEMBER 30, 1998
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
AMERICAN
RADIO AS
ADJUSTED
JANUARY 1, 1998
THE TO JUNE 4, PRO FORMA COMBINED
COMPANY 1998(1) ADJUSTMENTS PRO FORMA
------------- --------------- ----------- ----------
<S> <C> <C> <C> <C>
Net revenues............................ $1,319,690 $167,375 -- $1,487,065
---------- -------- ------- ----------

Operating expenses excluding
depreciation and amortization......... 767,507 118,838 -- 886,345
Depreciation and amortization........... 177,249 27,503 $ 9,604(2) 214,356
Corporate expenses...................... 13,145 5,470 -- 18,615
---------- -------- ------- ----------
Total operating expenses................ 957,901 151,811 9,604 1,119,316
---------- -------- ------- ----------
Operating earnings...................... 361,789 15,564 (9,604) 367,749
Interest expense, net................... (22,038) (30,311) 10,506(3) (41,843)
Other income, net....................... 1,787 249 -- 2,036
---------- -------- ------- ----------
Earnings (loss) before income taxes..... 341,538 (14,498) 902 327,942
Income tax expense (benefit)............ 175,958 (9,372) 5,643(4) 172,229
---------- -------- ------- ----------
Net earnings (loss)..................... $ 165,580 $ (5,126) $(4,741) $ 155,713
========== ======== ======= ==========
Net earnings per common share -- basic
and diluted........................... $ 0.24 $ 0.22
========== ==========
Weighted average shares
outstanding -- basic and diluted...... 700,000 700,000
========== ==========
</TABLE>

See Notes to Unaudited Combined Pro Forma Financial Information

22
<PAGE> 29

INFINITY BROADCASTING CORPORATION

UNAUDITED COMBINED PRO FORMA STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
AMERICAN
THE RADIO AS PRO FORMA COMBINED
COMPANY ADJUSTED (5) ADJUSTMENTS PRO FORMA
---------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
Net revenues................................. $1,480,091 $393,322 -- $1,873,413
---------- -------- ------- ----------
Operating expenses excluding depreciation
and amortization........................... 888,405 258,750 -- 1,147,155
Depreciation and amortization................ 197,135 72,400 $16,150(2) 285,685
Corporate expenses........................... 22,277 8,207 -- 30,484
---------- -------- ------- ----------
Total operating expenses..................... 1,107,817 339,357 16,150 1,463,324
---------- -------- ------- ----------
Operating earnings........................... 372,274 53,965 (16,150) 410,089
Interest expense, net........................ (3,645) (69,686) 22,692(3) (50,639)
Other income, net............................ 5,978 1,999 -- 7,977
---------- -------- ------- ----------
Earnings (loss) before income taxes.......... 374,607 (13,722) 6,542 367,427
Income tax expense (benefit)................. 196,978 (2,991) 12,913(4) 206,900
---------- -------- ------- ----------
Net earnings (loss).......................... $ 177,629 $(10,731) $(6,371) $ 160,527
========== ======== ======= ==========
Net earnings per common share -- basic
and diluted................................ $ 0.25 $ 0.23
========== ==========
Weighted average shares outstanding -- basic
and diluted................................ 700,000 700,000
========== ==========
</TABLE>

See Notes to Unaudited Combined Pro Forma Financial Information
23
<PAGE> 30

NOTES TO UNAUDITED COMBINED PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)

(1) On June 4, 1998, the Company acquired the radio operations of American
Radio. The acquisition was accounted for as a purchase and, accordingly, the
Company recognized the results of the acquired radio operations subsequent
to that date. The historical American Radio results for the period prior to
the acquisition (January 1, 1998 to June 4, 1998) have been adjusted to give
effect to American Radio's related acquisitions and dispositions as of
January 1, 1997.

(2) The adjustment reflects the incremental amortization expense resulting from
the increase in the value of FCC licenses and goodwill to their estimated
fair value at the date of acquisition, based on an estimated 40 years.

(3) The adjustment represents a reduction in interest expense to reflect the
following: (i) reduction of American Radio's stated interest rates to their
estimated fair value at the acquisition date; (ii) adjustment to increase
interest expense for amounts previously recorded as preferred stock
dividends; and (iii) elimination of interest on American Radio's bank debt
which was repaid in connection with the acquisition.

(4) The adjustment reflects the tax consequences of higher non-deductible
goodwill and the net tax effect of lower interest cost and higher FCC
license amortization.

(5) The results of American Radio for the year ended December 31, 1997 have been
adjusted to give effect to American Radio's related acquisitions and
dispositions as of January 1, 1997 as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
-----------------------------------
AMERICAN
RADIO
AMERICAN PRO FORMA AS
RADIO ADJUSTMENTS ADJUSTED
-------- ----------- --------
<S> <C> <C> <C>
Net revenues................................................ $357,020 $36,302(a) $393,322
-------- ------- --------
Operating expenses excluding depreciation and
amortization.............................................. 234,311 24,439(a) 258,750
Depreciation and amortization............................... 58,417 13,983(a) 72,400
Corporate expenses.......................................... 8,207 8,207
-------- ------- --------
Total operating expenses.................................... 300,935 38,422 339,357
-------- ------- --------
Operating earnings.......................................... 56,085 (2,120) 53,965
Interest expense, net....................................... (54,596) (15,090) (69,686)
Other income (expense), net................................. (5,520) 7,519(a) 1,999
-------- ------- --------
Loss before income taxes.................................... (4,031) (9,691) (13,722)
Income tax expense (benefit)................................ 56 (3,047) (2,991)
-------- ------- --------
Loss from continuing operations............................. $(4,087) $(6,644) $(10,731)
======== ======= ========
</TABLE>

(a) During 1997, American Radio made certain acquisitions and dispositions
of radio stations. The pro forma adjustments give effect to such
transactions as if they occurred on January 1, 1997.

24
<PAGE> 31

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

GENERAL

The following discussion and analysis of the Company's financial condition
and results of operations should be read in conjunction with the Combined
Financial Statements and the related Notes thereto included elsewhere in this
Prospectus.

The Company was formed to own and operate the out-of-home media business of
CBS Corporation, which prior to December 1, 1997, was known as Westinghouse
Electric Corporation. Initially, the Company consisted of the Westinghouse radio
stations. In November 1995, Westinghouse acquired CBS Inc. In December 1996,
Westinghouse acquired Old Infinity, which also owned TDI and had a minority
equity interest in and managed Westwood One. On June 4, 1998, CBS acquired the
radio broadcasting operations of American Radio. Prior to the Offerings, CBS
expects to effect a reorganization (the "Reorganization") by contributing to the
Company, at book value, certain subsidiaries (including Old Infinity and
American Radio) and net assets comprising substantially all of CBS's out-of-home
media business. CBS will retain its investment in USA Digital Radio L.P., which
was formed to develop digital technology.

Although the Company was not actually formed until September 1998, the
combined financial statements present the operations of the out-of-home media
business that will be owned and operated by the Company as if the Company had
been a separate entity for all periods presented. Furthermore, although the
acquisitions described above were actually consummated by Westinghouse or CBS,
for purposes of the Combined Financial Statements and the following discussion
and analysis, the acquisitions have been presented as if they were made by the
Company and as if the consideration needed to effect the acquisitions was
contributed to the Company by Westinghouse or CBS.

Thus, for purposes of the Combined Financial Statements and the following
discussion and analysis, on November 24, 1995, the Company (then consisting of
Westinghouse's radio operations) is treated as having acquired the radio
operations of CBS Inc., using cash contributed by CBS (which was then known as
Westinghouse) of $1.2 billion. Similarly, the Company is treated as having
acquired, on December 31, 1996, Old Infinity for $4.7 billion consisting of $3.8
billion of CBS's common stock and $0.9 billion of debt which was repaid
immediately prior to the acquisition. For financial statement purposes, the CBS
common stock and the cash used to repay the debt of Old Infinity are treated as
having been contributed to the Company by CBS. The Company is treated as having
completed, on June 4, 1998, the acquisition of the radio broadcasting operations
of American Radio for $1.4 billion in cash plus the assumption of debt with a
fair value of approximately $1.3 billion. In connection with the acquisition of
American Radio, the Company is treated as having received a $1.4 billion capital
contribution from CBS and as having recorded an additional $0.6 billion capital
contribution which was used to repay debt assumed in the transaction. These
acquisitions were accounted for under the purchase method of accounting. See
"Business -- The Company."

The combined historical financial information is not necessarily indicative
of the results of operations, financial position and cash flows that would have
resulted if the Reorganization had occurred on January 1, 1993 and if the
Company had actually operated as a separate, stand-alone entity during this
period. The combined historical financial information does not reflect the
changes that will occur in the funding and operations of the Company as a result
of the Reorganization and the Offerings. See "Relationships Between the Company
and CBS."

SOURCES OF REVENUE

The Company derives substantially all of its revenues from sales of
advertising, either on its radio stations or on its outdoor advertising
displays. The Company's revenues are affected primarily by the advertising rates
the Company is able to charge. These rates are in large part based on conditions
in the economy, conditions in each station's market and on a station's ability
to attract audiences in the demographic groups targeted by its advertisers. The
ability to attract radio audiences is measured principally by independent
national rating services. Approximately 80% of the Company's revenues are
derived from the operation of radio stations.

25
<PAGE> 32

COMPONENTS OF EXPENSES

The primary operating expenses involved in owning and operating radio
stations and outdoor advertising facilities are employee costs, programming,
solicitation of advertising and promotion. The Company's net earnings also
reflect substantial amortization of broadcast licenses and goodwill. In
addition, the Company's effective tax rate exceeds the federal statutory rate
primarily because of the non-deductible goodwill acquired in recent business
acquisitions.

USE OF EBITDA

Management believes that EBITDA is an appropriate measure for evaluating
the operating performance of the Company's business. EBITDA eliminates the
effect of depreciation and amortization of tangible and intangible assets, most
of which were acquired in acquisitions accounted for under the purchase method
of accounting, including CBS's radio operations, Old Infinity and American
Radio. The exclusion of amortization expense eliminates variations in results
among stations or other entities caused by the timing of acquisitions. More
recent acquisitions reflect higher amortization expense due to increasing prices
paid for FCC licenses and goodwill. However, EBITDA should be considered in
addition to, not as a substitute for, operating earnings, net earnings, cash
flows and other measures of financial performance reported in accordance with
generally accepted accounting principles. Management's discretionary use of
funds depicted by EBITDA may be limited by working capital, debt service and
capital expenditure requirements and by restrictions related to legal
requirements, commitments and uncertainties.

RESULTS OF OPERATIONS -- THE COMPANY

Nine Months Ended September 30, 1998 Compared to Nine Months Ended September
30, 1997

Net revenues for the nine months ended September 30, 1998 were $1,320
million compared to $1,068 million for the nine months ended September 30, 1997,
an increase of 24%. Driving this increase was the continued strong performance
of the stations, as well as strong growth in outdoor advertising. In addition,
the operations of American Radio subsequent to its June 1998 acquisition
contributed to the increase. On a pro forma basis, assuming the American Radio
acquisition had occurred as of January 1, 1997, net revenues for the nine months
ended September 30, 1998 compared to the nine months ended September 30, 1997
would have increased by approximately 12%.

Operating expenses (excluding depreciation and amortization expense) for
the nine months ended September 30, 1998 were $768 million compared to $654
million for the nine months ended September 30, 1997, an increase of 17%.
Operating expenses did not increase in the same proportion as the increase in
revenues because a substantial portion of the Company's costs are fixed. On a
pro forma basis, assuming the American Radio acquisition had occurred as of
January 1, 1997, operating expenses for the nine months ended September 30, 1998
compared to the nine months ended September 30, 1997 would have increased by
approximately 5%.

Corporate expenses for the nine months ended September 30, 1998 were $13
million compared to $17 million for the nine months ended September 30, 1997.

Depreciation and amortization expense for the nine months ended September
30, 1998 was $177 million compared to $149 million for the nine months ended
September 30, 1997, an increase of approximately 19%. The increase represents
additional depreciation and amortization expense resulting from the June 4, 1998
acquisition of American Radio. On a pro forma basis, assuming the American Radio
acquisition had occurred as of January 1, 1997, depreciation and amortization
expense for the nine months ended September 30, 1998 would have been comparable
to the prior year.

Operating earnings for the nine months ended September 30, 1998 were $362
million compared to $248 million for the nine months ended September 30, 1997,
an increase of 46%. This increase was primarily attributable to the higher
revenues and to the June 1998 acquisition of American Radio. On a pro forma
basis, assuming the American Radio acquisition had occurred as of January 1,
1997, operating earnings for the nine months ended September 30, 1998 compared
to the nine months ended September 30, 1997 would have increased by
approximately 37%.

26
<PAGE> 33

EBITDA for the nine months ended September 30, 1998 was $541 million
compared to $397 million for the nine months ended September 30, 1997, an
increase of 36%. On a pro forma basis, assuming the American Radio acquisition
had occurred as of January 1, 1997, EBITDA for the nine months ended September
30, 1998 compared to the nine months ended September 30, 1997 would have
increased by approximately 21%. Cash flow from operating activities totaled $316
million for the nine months ended September 30, 1998 compared to $239 million
for the same period of 1997. On a pro forma basis, cash flow from operating
activities would have increased 28% for the same periods. Cash flow from
operating activities includes cash paid for interest and taxes as well as the
effects of certain changes in assets and liabilities. See "-- Liquidity and
Capital Resources" for information regarding cash flows from investing and
financing activities.

Interest expense for the nine months ended September 30, 1998 was $22
million compared to $4 million for the nine months ended September 30, 1997. The
interest expense for the 1998 period resulted from debt assumed in the American
Radio acquisition and interest on the CBS Note, while interest for the 1997
period resulted primarily from $149 million of notes issued by Old Infinity,
which were redeemed by the Company in March 1997.

Income taxes for the nine months ended September 30, 1998 were $176 million
compared to $129 million for the nine months ended September 30, 1997. The
effective tax rate was 52% for the nine months ended September 30, 1998 compared
to 53% for the nine months ended September 30, 1997.

Net earnings for the nine months ended September 30, 1998 totaled $166
million compared to $116 million for the nine months ended September 30, 1997,
an increase of $50 million or 43%.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Net revenues for the year ended December 31, 1997 were $1,480 million
compared to $554 million for the year ended December 31, 1996. This increase in
revenues was driven primarily by the inclusion of the results of operations for
Old Infinity, which was acquired on December 31, 1996, and the overall strong
performance of the existing radio stations. On a pro forma basis, assuming the
Old Infinity acquisition had occurred as of January 1, 1996, net revenues for
the year ended December 31, 1997 would have increased approximately 20%. These
results reflect strong markets combined with management's continued focus on
improving revenue growth.

Operating expenses (excluding depreciation and amortization expense) for
1997 were $888 million compared to $344 million for 1996. The increase was due
principally to the above acquisition and expenses associated with higher
revenues. On a pro forma basis, assuming the Old Infinity acquisition had
occurred as of January 1, 1996, station operating expenses in 1997 would have
increased approximately 6%.

Corporate expenses for 1997 totaled $22 million compared to $13 million for
1996, an increase of $9 million primarily from the Old Infinity acquisition.

Depreciation and amortization expense for 1997 was $197 million compared to
$58 million for 1996. The increase was due to the amortization expense
associated with the Old Infinity acquisition. On a pro forma basis, assuming the
Old Infinity acquisition had occurred as of January 1, 1996, depreciation and
amortization expense in 1997 would have been comparable to the prior year.

Operating earnings for 1997 were $372 million compared to $139 million for
1996. The increase was due principally to the acquisition of Old Infinity and
improved results at the Company's radio stations. On a pro forma basis,
operating earnings in 1997 increased approximately 26% as a result of the
revenue increase.

EBITDA for 1997 was $575 million compared to $197 million for 1996. On a
pro forma basis, assuming the Old Infinity acquisition had occurred as of
January 1, 1996, EBITDA would have increased approximately 29%. Cash flow from
operating activities totaled $310 million in 1997 compared to $104 million in
1996. On a pro forma basis, cash flow from operating activities would have
increased 58%. Cash flow from operating activities includes cash paid for
interest and taxes as well as the effects of certain changes in assets and
liabilities. See "-- Liquidity and Capital Resources" for information regarding
cash flows from investing and financing activities.

27
<PAGE> 34

Interest expense for 1997 totaled $4 million, while there was no interest
expense for 1996. The interest expense for 1997 resulted from debt originally
issued by Old Infinity which was repaid by the Company in March 1997.

Other income of $6 million for 1997 consists primarily of a gain on the
disposal of a radio station.

Income taxes for 1997 totaled $197 million compared to $68 million for
1996. The effective tax rate was 53% for 1997 compared to 49% for 1996. The
increase resulted primarily from non-deductible goodwill associated with the Old
Infinity acquisition.

Net earnings for 1997 totaled $178 million compared to $72 million for
1996.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Net revenues for the year ended December 31, 1996 were $554 million
compared to $216 million for the year ended December 31, 1995, an increase of
156%. The increase was due principally to the acquisition of the radio
operations of CBS Inc. (the "CBS Radio Acquisition"). On a pro forma basis,
assuming the CBS Radio Acquisition had occurred as of January 1, 1995, net
revenues for the year ended December 31, 1996 would have increased approximately
11%.

Operating expenses (excluding depreciation and amortization expense) for
1996 were $344 million compared to $136 million for 1995. The increase was due
principally to the CBS Radio Acquisition. On a pro forma basis, assuming the CBS
Radio Acquisition had occurred as of January 1, 1995, operating expenses in 1996
would have decreased approximately 2%.

Corporate expenses for 1996 totaled $13 million compared to $9 million for
1995, an increase of $4 million primarily from the CBS Radio Acquisition.

Depreciation and amortization expense for 1996 was $58 million as compared
to $18 million for 1995. The increase was due to the depreciation and
amortization expense associated with the CBS Radio Acquisition. On a pro forma
basis, assuming the acquisition had occurred as of January 1, 1995, depreciation
and amortization expense in 1996 would have increased approximately 3%.

Operating earnings for 1996 were $139 million compared to $53 million for
1995. The increase was primarily due to the CBS Radio Acquisition. On a pro
forma basis, assuming the acquisition had occurred as of January 1, 1995,
operating earnings in 1996 would have increased 95%.

EBITDA for 1996 was $197 million compared to $71 million for 1995. On a pro
forma basis, assuming the CBS Radio Acquisition had occurred as of January 1,
1995, EBITDA in 1996 would have increased approximately 49%. Cash flow from
operating activities totaled $104 million in 1996 compared to $49 million in
1995. On a pro forma basis, cash flow from operating activities would have
decreased 6%. Cash flow from operating activities includes cash paid for
interest and taxes as well as the effects of certain changes in assets and
liabilities. See "-- Liquidity and Capital Resources" for information regarding
cash flows from investing and financing activities.

Income taxes for 1996 were $68 million compared to $26 million for 1995.
The effective tax rate was 49% for 1996 compared to 48% for 1995.

Net earnings for 1996 totaled $72 million compared to $28 million for 1995,
an increase of $44 million.

SEASONALITY

Seasonal revenue fluctuations are common in the out-of-home media industry
and are primarily the result of fluctuations in advertising expenditures by
retailers. The Company's revenue is typically lowest in the first quarter and
highest in the second and fourth quarters.

NEW PRONOUNCEMENTS

28
<PAGE> 35

does not anticipate that the adoption of this standard will have a material
impact on the Company's combined financial position or results of operations.

In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," was issued. SFAS 133 standardizes the accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, 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 statement is effective for all fiscal quarters of all fiscal years
beginning after June 15, 1999. The Company has entered into an insignificant
number of derivative and hedging transactions and does not anticipate that the
adoption of this standard will have a material impact on the Company's combined
financial position, financial results of operations or disclosure.

LIQUIDITY AND CAPITAL RESOURCES

During the Company's historical periods, its liquidity was managed by CBS.
In general, the Company's operations generate cash substantially in excess of
that required for recurring operations and capital expenditures. As a result,
management expects that the Company will have sufficient liquidity to meet
ordinary future business needs. Sources of liquidity generally available to the
Company include cash from operations, cash and cash equivalents, borrowings or
issuances of equity securities. The Company had approximately $3.2 billion of
long-term debt (including the $2.5 billion CBS Note) outstanding at September
30, 1998. Additional debt or equity financing may be required for future
material acquisitions, if any. The Company's ability to incur additional debt is
subject to significant restrictions under the CBS Credit Agreement. See
"-- Financing Activities."

The acquisition of American Radio by the Company in June 1998 resulted in
significant changes in several balance sheet items, including the allowance for
doubtful accounts, from December 31, 1997 to September 30, 1998.

The Company had working capital of $350 million, $247 million and $273
million at September 30, 1998, December 31, 1997 and December 31, 1996,
respectively.

Operating Activities

The Company's operating activities provided $316 million of cash in the
nine months ended September 30, 1998 compared to $239 million in the nine months
ended September 30, 1997. The increase relates primarily to the improved
operating results for the nine months ended September 30, 1998 compared to the
corresponding period of the prior year. The operating activities provided $310
million of cash in 1997 compared to $104 million in 1996. The increase in 1997
was primarily related to the cash provided by the operations of Old Infinity,
acquired on December 31, 1996. In 1995, the operating activities provided $49
million of cash. The increase in operating cash flows from 1995 to 1996 was
driven by the CBS Radio Acquisition in November 1995.

Investing Activities

The Company's investing activities used $1.4 billion of cash in the nine
months ended September 30, 1998, primarily for the acquisition of American
Radio, compared to $19 million of cash provided in the nine months ended
September 30, 1997. Investing activities provided cash of $22 million during
1997. During 1996, investing activities used $1.0 billion, primarily for the
cash portion of the consideration for Old Infinity while during 1995, the
Company used $1.2 billion of cash for the CBS Radio Acquisition.

The Company's capital expenditures totaled $15 million in 1997 compared to
$7 million in 1996 and $9 million in 1995. The Company's business does not
require substantial investment in capital.

Financing Activities

Cash provided by financing activities totaled $1.1 billion in the nine
months ended September 30, 1998 compared to cash used of $251 million in the
nine months ended September 30, 1997. Cash provided during the 1998 period
relates primarily to cash provided by CBS to complete the acquisition of
American Radio. Cash used during the nine months ended September 30, 1997
relates to the repayment of debt assumed in the

29
<PAGE> 36

Old Infinity acquisition. Cash used by financing activities during 1997 totaled
$329 million reflecting the repayment of Old Infinity debt as well as $180
million of net payments to CBS as the Company generated cash earnings. In 1996,
financing activities generated $917 million of cash primarily reflecting the
cash received from CBS for the cash portion of the consideration for the Old
Infinity acquisition. In 1995, financing activities provided cash of $1.2
billion, which primarily represents cash from CBS used for the CBS Radio
Acquisition.

Prior to the Offerings, the Company expects to become a borrower under
CBS's existing $4.0 billion revolving credit facility, pursuant to which up to
$1.0 billion will be available to the Company for revolving loans. The CBS
Credit Agreement terminates on August 29, 2001. CBS unconditionally and
irrevocably guarantees the obligations of each subsidiary borrower under the CBS
Credit Agreement. The terms of the CBS Credit Agreement impose significant
restrictions on the ability of CBS's subsidiaries (including the Company) to
incur debt, which restrictions are subject to certain exceptions, including in
respect of indebtedness of a subsidiary under the CBS Credit Agreement, debt of
a subsidiary at the time it is acquired and other indebtedness not covered by a
specific exception in an aggregate principal amount not to exceed $300 million
at any one time outstanding. The Company currently believes that the CBS Credit
Agreement will provide it with financing at a lower cost than if the Company
were to enter into an independent credit facility at this time. See "Description
of Indebtedness -- CBS Credit Agreement." The Company may obtain an independent
credit facility in the future.

Following the Offerings, the Company does not anticipate paying any
dividends on shares of Common Stock. See "Dividend Policy."

As of September 30, 1998, the Company had $3.2 billion of long-term debt,
consisting of the $2.5 billion CBS Note and $0.6 billion of debt primarily
related to the debt assumed in the acquisition of American Radio. Under the most
restrictive of the indentures relating to the American Radio long-term debt,
approximately $1.95 billion of American Radio's net assets at September 30, 1998
are restricted. This, in turn, restricts the ability of American Radio to pay
dividends to the Company.

YEAR 2000

The Year 2000 issue is the result of the development of computer programs
and computer chips using two digits rather than four digits to define the
applicable year. Computer programs and/or equipment with time-sensitive software
or computer chips may recognize the date using "00" as the year 1900 rather than
the Year 2000. This could result in a system failure or miscalculations causing
disruptions to business operations.

To address the Year 2000 issue, the Company has undertaken efforts to
identify, modify or replace, and test systems that may not be Year 2000
compliant. The Company estimates its cost to achieve Year 2000 compliance to be
approximately $5 million, of which $2 million has been incurred to date. CBS is
expected to incur additional costs of approximately $2 million on behalf of the
Company to ensure compliance of the management information systems
infrastructure. Approximately 60% of the total expenditures relate to
replacement of existing systems. The Company expects to fund these costs through
its cash flows from operations. Such costs are expensed as incurred.

Several CBS centrally managed critical systems for radio are currently Year
2000 compliant or will be replaced by Year 2000 compliant applications by early
1999. A significant portion of the Year 2000 work for radio systems has been
performed or is underway. The Company is currently in the process of developing
Year 2000 procedures and guidelines for individual radio stations. The Company
plans to have all radio systems tested and compliant by the second quarter of
1999.

The Year 2000 effort also includes communication with all significant third
party suppliers and customers to determine the extent to which the Company's
systems are vulnerable to those parties' failure to reach Year 2000 compliance.
There can be no guarantee that the Company's third party suppliers or customers
will be Year 2000 compliant on a timely basis and that failure to achieve
compliance would not have a material adverse impact on the Company's business
operations.

The Company expects to develop a formal contingency plan to ensure
continued business operations in case of non-compliance with the Year 2000 on a
timely basis. Overall, the Company believes that it will

30
<PAGE> 37

complete its Year 2000 effort and will be compliant on time. Although there can
be no assurances that this will occur, the Company will continuously monitor its
progress and evaluate the need for a contingency plan. Based on its current
plan, the Company believes that it will have adequate time to prepare for
contingency measures if the need arises.

The Company believes that it is difficult to fully assess the risks of the
Year 2000 problem due to numerous uncertainties surrounding the issue.
Management believes that primary risks are external to the Company and relate to
the Year 2000 readiness of its third party business partners. The inability of
the Company or its third party business partners to adequately address the Year
2000 issues on a timely basis could result in a material financial risk,
including loss of revenue, substantial unanticipated costs and service
interruptions. Accordingly, the Company plans to devote the resources it
concludes are appropriate to address all significant Year 2000 issues in a
timely manner.

31
<PAGE> 38

BUSINESS

THE COMPANY

The Company is one of the largest radio broadcasting and outdoor
advertising companies in the United States. The Company's 161 radio stations,
which serve 34 markets, collectively accounted for approximately 11% of total
1997 U.S. radio advertising expenditures. The Company's stations collectively
ranked first or second, in terms of 1997 pro forma radio revenues, in 28 out of
the 34 markets in which the Company operates stations. Approximately 70%, 87%
and 99% of the Company's pro forma 1997 net radio revenues were generated in the
10, 25 and 50 largest U.S. radio markets, respectively. The Company's outdoor
advertising business is conducted through its wholly owned subsidiary, TDI. TDI
is one of the largest outdoor advertising companies in the United States, and
operates predominantly in major metropolitan markets, 14 of which are also
served by the Company's radio stations. TDI also operates internationally with
offices in the United Kingdom, the Republic of Ireland and Northern Ireland.

The Company operates and seeks to opportunistically acquire radio and
outdoor, or "out-of-home," media properties in the largest markets in the United
States. The Company characterizes its business as out-of-home because a majority
of radio listening, and virtually all viewing of outdoor advertising, takes
place in automobiles, transit systems, on the street and other locations outside
the consumer's home. The Company believes that out-of-home media are an
attractive alternative to other advertising media, particularly as "in-home"
media, including broadcast television, cable and the Internet, increasingly
compete for advertising revenue in the home.

The Company was formed to own and operate the out-of-home media business of
CBS Corporation, which prior to December 1, 1997, was known as Westinghouse
Electric Corporation. In November 1995, Westinghouse acquired CBS Inc. In
December 1996, Westinghouse acquired Old Infinity, which also owned TDI and had
a minority equity interest in and managed Westwood One. On June 4, 1998, CBS
acquired the radio broadcasting operations of American Radio. Both Old Infinity
and American Radio were publicly traded companies prior to their acquisition by
Westinghouse and CBS, respectively. Prior to the Offerings, CBS will have
transferred substantially all its radio, outdoor advertising and related assets
to the Company.

BUSINESS STRATEGY AND COMPETITIVE STRENGTHS

large audiences across a wide range of demographics. The Company believes that
the outdoor advertising business has also become more competitive due to similar
industry consolidation. In addition, should the number and variety of in-home
media continue to increase (whether as a result of the introduction of new
technologies or otherwise), the Company believes that the smaller number of
media competing in the out-of-home market will provide it with a greater
competitive advantage than it has to date.

Proven Management Team. The Company's four executive officers have more
than 70 years combined experience in the radio and outdoor advertising business,
and Mr. Karmazin, the Company's Chairman, President and Chief Executive Officer,
and Mr. Suleman, the Company's Executive Vice President, Chief Financial
Officer, Treasurer and Secretary, have worked together at the Company's
predecessors since 1986. The Company believes that this proven management team
is a significant competitive asset for the Company.

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<PAGE> 40

RADIO STATIONS AND OUTDOOR DISPLAYS

The following table sets forth certain selected information with regard to
the Company's radio stations and outdoor displays as of November 8, 1998.

<TABLE>
<CAPTION>
RADIO TDI(1)
MARKET ----------------------------------------- -------------------------------
RANK BY
1997 METRO AREA AM/
MARKET POPULATION STATIONS FM FORMAT DISPLAY TYPE
- ------ --------------- -------- --- ------ ------------
<S> <C> <C> <C> <C> <C>
New York, NY 1 WCBS FM Oldies Bus, Commuter Rail, Phone
WCBS AM News Kiosks, Billboards, Walls,
WFAN AM Sports Trestles, "Spectacular
WINS AM News Signage," In-station Displays
WNEW FM Classic Rock
WXRK FM Rock
Los Angeles, CA 2 KCBS FM Classic Rock Bus, Phone Kiosks, Beach
KFWB AM News Panels, Campus Kiosks
KLSX FM Talk
KNX AM News
KRLA AM Oldies
KROQ FM Alternative Rock
KRTH FM Oldies
KTWV FM Smooth Jazz
Chicago, IL 3 WBBM FM Contemporary Hit Bus, Bus Shelters, Rail, Bridge
Radio/Dance Bulletins
WBBM AM News
WCKG FM Talk
WJMK FM Oldies
WMAQ AM News/Sports
WSCR AM Sports/Talk
WUSN FM Country
WXRT FM Adult Alternative Rock
San Francisco, CA 4 KCBS AM News Bus, Cable Cars, Commuter Rail
KFRC FM Oldies
KFRC AM Oldies
KITS FM Alternative Rock
KLLC FM Modern Rock
KYCY AM Country
KYCY FM Country
Philadelphia, PA 5 KYW AM News Commuter Rail
WIP AM Sports
WOGL FM Oldies
WPHT AM Talk
WYSP FM Active Rock
Dallas -- Fort Worth, 6 KHVN AM Gospel Bus
TX KLUV FM Oldies
KLUV AM Oldies
KOAI FM Smooth Jazz
KRBV FM R&B Oldies
KRLD AM News/Talk
KVIL FM Adult Contemporary
KYNG FM Country
Detroit, MI 7 WKRK FM New Rock --
WOMC FM Oldies
WVMV FM Smooth Jazz
WWJ AM News
WXYT AM Talk/Sports
WYCD FM Country
</TABLE>

34
<PAGE> 41
RADIO STATIONS AND OUTDOOR DISPLAYS (CONT'D)

<TABLE>
<CAPTION>
RADIO TDI(1)
MARKET ----------------------------------------- -------------------------------
RANK BY
1997 METRO AREA AM/
MARKET POPULATION STATIONS FM FORMAT DISPLAY TYPE
- ------ --------------- -------- --- ------ ------------
<S> <C> <C> <C> <C> <C>
Washington, D.C. 8 WARW FM Classic Rock Bus, Commuter Rail
WHFS FM Alternative Rock
WJFK FM Talk
WPGC FM Contemporary Hit Radio/
Rhythmic
WPGC AM Gospel
Houston, TX 9 KIKK FM Country --
KIKK AM Country
KILT FM Country
KILT AM Sports
Boston, MA 10 WBCN FM Modern Rock --
WBMX FM Modern Adult Contemporary
WBZ AM News/Talk/Sports
WODS FM Oldies
WZLX FM Classic Rock
Atlanta, GA 12 WAOK AM Gospel Bus, Commuter Rail, Eight-
WVEE FM Urban Sheet Billboards
WZGC FM Classic Rock
Seattle-Tacoma, WA 13 KBKS FM Modern Adult Contemporary Bus
KMPS FM Country
KRPM AM Modern Adult Contemporary
KYCW FM Country
KZOK FM Classic Rock
Minneapolis, MN 14 WCCO AM Full Service Bus
WLTE FM Soft Adult Contemporary
KMJZ FM Smooth Jazz
KSGS AM Urban
St. Louis, MO 18 KEZK FM Soft Adult Contemporary --
KMOX AM News/Talk/Sports
KYKY FM Adult Contemporary
Baltimore, MD 19 WBGR AM Gospel --
WBMD AM Religion
WJFK AM Talk
WLIF FM Soft Adult Contemporary
WQSR FM Oldies
WWMX FM Hot Adult Contemporary
WXYV FM Contemporary Hit Radio
Pittsburgh, PA 20 KDKA AM News/Talk Bus
WBZZ FM Contemporary Hit Radio
WDSY FM Country
WZPT FM Classic Hits
Tampa, FL 21 WLLD(2) FM Contemporary Hit Radio Bus
WQYK FM Country
WQYK AM Talk
WYUU(2) FM Oldies
Portland, OR 24 KBBT FM Modern Adult Contemporary --
KINK FM Adult Alternative Rock
KKJZ FM Smooth Jazz
KUFO FM Album Oriented Rock
KUPL FM Country
KUPL AM Classic Country
Cincinnati, OH 25 WGRR FM Oldies --
WKRQ FM Contemporary Hit Radio
WYLX FM Classic Hits
</TABLE>

35
<PAGE> 42
RADIO STATIONS AND OUTDOOR DISPLAYS (CONT'D)

<TABLE>
<CAPTION>
RADIO TDI(1)
MARKET ----------------------------------------- -------------------------------
RANK BY
1997 METRO AREA AM/
MARKET POPULATION STATIONS FM FORMAT DISPLAY TYPE
- ------ --------------- -------- --- ------ ------------
<S> <C> <C> <C> <C> <C>
Kansas City, MO 26 KBEQ FM Country --
KFKF FM Country
KMXV FM Contemporary Hit Radio
KOWW AM Country
KOZN FM Modern Adult Contemporary
Sacramento, CA 27 KHTK AM Talk --
KNCI FM Country
KOME AM Oldies
KRAK FM Country
KSFM FM Contemporary Hit Radio
KYMX FM Adult Contemporary
KZZO FM Modern Adult Contemporary
San Jose, CA 28 KBAY FM Soft Rock Bus
KEZR FM Adult Contemporary
Riverside, CA 29 KFRG FM Country --
KXFG FM Country
Columbus, OH 32 WAZU FM Album Oriented Rock --
WHOK FM Country
WLVQ FM Classic Rock
Charlotte, NC 36 WBAV FM Urban Adult Contemporary --
WFNZ AM Sports/Talk
WGIV AM Gospel
WNKS FM Contemporary Hits Radio
WPEG FM Urban
WSOC FM Country
WSSS FM Classic Hits
Buffalo, NY 41 WBLK(3) FM Urban Adult Contemporary Bus, Commuter Rail, Bus
WECK AM Adult Standards Shelters
WJYE FM Soft Adult Contemporary
WLCE FM Modern Adult Contemporary
WYRK FM Country
Hartford, CT 42 WRCH FM Soft Adult Contemporary --
WTIC FM Top 40
WTIC AM News/Talk
WZMX FM Classic Hits
Las Vegas, NV 43 KLUC FM Contemporary Hit Radio --
KMXB FM Modern Adult Contemporary
KMZQ FM Soft Adult Contemporary
KSFN AM Sports
KXNT AM News/Talk/Sports
KXTE FM Alternative
Rochester, NY 47 WCMF FM Album Oriented Rock --
WPXY FM Contemporary Hit Radio
WRMM FM Soft Adult Contemporary
WZNE FM Modern Adult Contemporary
W. Palm Beach, FL 49 WEAT FM Soft Adult Contemporary --
WIRK FM Country
Austin, TX 50 KAMX FM Modern Adult Contemporary --
KJCE AM Urban Adult Contemporary
KKMJ FM Soft Adult Contemporary
KQBT FM Rhythmic Contemporary Hit
Radio
</TABLE>

36
<PAGE> 43
RADIO STATIONS AND OUTDOOR DISPLAYS (CONT'D)

RADIO STATIONS SUBJECT TO DISPOSITION

<TABLE>
<CAPTION>
MARKET
RANK BY
1997 METRO AREA AM/
MARKET POPULATION STATIONS FM FORMAT
- ------ --------------- -------- --- ------
<S> <C> <C> <C> <C> <C>
Boston, MA 10 WAAF(4) FM Album Oriented Rock
WEEI(4) AM Sports
WEGQ(4) FM 70's Oldies
WNFT(5) AM Urban
WRKO(4) AM News/Talk
Worcester, MA 112 WWTM(4) AM Sports
</TABLE>

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

(1) TDI also has outdoor displays, including bus, rail and billboard displays,
in the following markets: New Jersey; New Orleans, Louisiana; North San
Diego, California; Phoenix, Arizona; San Antonio, Texas; Great Britain; and
Ireland.

(2) Being acquired from Entercom Communications Corp.; contract signed and FCC
approval has been granted.

(3) Operated by the Company pursuant to a local marketing agreement ("LMA"). An
LMA is a local marketing agreement which would be considered a time
brokerage agreement for FCC purposes.

(4) Being sold to Entercom Communications Corp. to comply with the terms of a
settlement with the DOJ following the acquisition of American Radio;
contract signed and FCC approval has been granted.

(5) Held in trust for purposes of complying with FCC's radio local ownership
rules, with the Company being the sole beneficial owner thereof. Being sold
to Mega Communications of Boston, Inc.; contract signed and application for
FCC approval pending.

ADVERTISING SALES

The substantial majority of the Company's revenues are generated from the
sale of local, regional and national advertising for broadcast on its radio
stations. In 1997, approximately 72% and 28% of the Company's net radio revenues
were generated from the sale of local and regional advertising, and national
advertising, respectively. The major categories of radio advertisers include:
Automotive, Retail, Healthcare, Telecommunications, Fast Food, Beverage, Movies,
Entertainment and Services. Each station's local sales staff solicits
advertising either directly from the local advertiser or indirectly through an
advertising agency. The Company employs a tiered commission structure to focus
its individual sales staffs on new business development. The Company has also,
consistent with its operating strategy of dedicated sales forces for each of its
stations, significantly increased the number of sales persons per station upon
the Company's acquisition of such station. The Company supports its strategy of
building local direct accounts by employing personnel in each of its markets to
produce custom commercials that respond to the needs of, and in turn help sell
product for, its advertisers. In addition, in-house production provides
advertisers greater flexibility in changing their commercial messages with
minimal lead time.

National sales are generally made by firms specializing in radio sales on
the national level in exchange for a commission from the Company that is based
on the Company's net revenues from the advertising obtained. Regional sales are
generally made by the Company's local sales staff. The Company believes that
both national and regional sales represent an attractive growth opportunity for
the Company. Whereas the Company seeks to increase its local sales through
larger and more customer-focused sales staffs, it seeks to

37
<PAGE> 44

increase its national and regional sales by offering clusters within specific
markets and regions which will make the Company's stations more attractive to
national and regional advertisers.

PROGRAMMING

Each of the Company's stations provides programming designed to fit its
specific format and serve its local community. In addition, the Company owns a
16% equity interest in Westwood One and vested warrants to purchase an
additional 9% equity interest. Westwood One is one of the leading producers and
distributors of syndicated and network radio programming in the United States,
and distributes syndicated and network radio programming to the Company's radio
stations as well as to competitors of the Company.

In February 1994, Old Infinity, which was then an independent public
company, entered into a management agreement (the "Management Agreement") with
Westwood One, pursuant to which Old Infinity agreed to provide Westwood One with
the services of a chief executive officer, a chief financial officer, support
and administrative personnel and such other officers and employees of the
Company as may be required to perform management services for Westwood One. Mr.
Karmazin was the President and Chief Executive Officer of Westwood One from
February 1994 until October 1998. Mr. Karmazin was replaced as Chief Executive
Officer by Mr. Joel Hollander, an employee of the Company who currently serves
as Chief Executive Officer of Westwood One pursuant to the Management Agreement.
Mr. Suleman has been the Chief Financial Officer of Westwood One since February
1994. Messrs. Karmazin and Suleman are Directors of Westwood One. The only
compensation Messrs. Karmazin and Suleman have received in respect of duties
performed for Westwood One are options to acquire common stock of Westwood One.
As of October 31, 1998, Mr. Karmazin and Mr. Suleman beneficially owned 630,149
and 240,000 shares, respectively, representing 2.2% and 0.8%, respectively, of
the outstanding common stock of Westwood One. The Management Agreement requires
Westwood One to pay Old Infinity a management fee in the amount of $2.0 million
per annum, subject to increases in accordance with the consumer price index, and
a performance bonus based on Westwood One's operating cash flow. The Management
Agreement is terminable by Westwood One: (i) upon 30 days notice to Old
Infinity; or (ii) in the event that Old Infinity wilfully commits a material act
of fraud or gross misconduct in performing its obligations under the agreement
and such act has a material adverse effect on Westwood One. Although the
Management Agreement expires on March 30, 1999, the parties have agreed to renew
the agreement for an additional five-year period on the same material economic
terms as those of the existing Management Agreement.

Prior to March 31, 1997, CBS operated several radio networks, which
involves selling advertising time for network programming and marketing and
distributing that programming to affiliated and non-affiliated radio stations.
Such sales, distribution and marketing efforts were not a core activity of CBS's
radio operations. Because Westwood One was actively engaged in the business of
distributing programming on a national scale, CBS and Westwood One (which was by
then being managed by Old Infinity) entered into a representation agreement,
dated as of March 31, 1997 (the "Representation Agreement"), following
Westinghouse's acquisition of Old Infinity. Pursuant to the Representation
Agreement, CBS granted Westwood One the right to operate CBS's radio networks
and to retain all revenues in connection with such operations, in exchange for
Westwood One's agreement to be responsible for all network operating expenses
and to pay CBS a representation rights fee of $20 million over a two-year
period. The Representation Agreement expires on March 30, 1999. The
Representation Agreement is terminable by either party: (i) if the Management
Agreement is terminated or expires without renewal; or (ii) the Representation
Agreement becomes illegal or invalid because of a change in FCC rules or legal
procedures.

Pursuant to the Management Agreement and the Representation Agreement, Old
Infinity and Westwood One agreed that Old Infinity, its subsidiaries and their
respective officers would not, without the prior consent of Westwood One,
manage, purchase, establish, participate in, own more than 5% of, or otherwise
lend assistance to, any radio network company other than the CBS radio networks.

Prior to the consummation of the Offerings, Old Infinity will become a
wholly owned subsidiary of the Company, and CBS will assign its rights under the
Representation Agreement to the Company, which will

38
<PAGE> 45

receive all future payments from Westwood One. See "Relationships Between the
Company and CBS -- Westwood One."

Pursuant to a news programming agreement, CBS also provides Westwood One
with news programming produced by CBS's news division. Westwood One has agreed
to pay CBS $8.0 million per annum for this news programming.

COMPETITION

The Company operates in a highly competitive industry. The Company's radio
stations and outdoor advertising properties compete for audiences and
advertising revenues directly with other radio stations and outdoor advertising
companies, as well as with other media, such as broadcast television,
newspapers, magazines, cable television, the Internet and direct mail, within
their respective markets. The Company's audience ratings and market shares are
subject to change and any adverse change in a particular market could have a
material adverse effect on the Company's revenues in that market and possibly
adversely affect revenues in other markets. There can be no assurance that the
Company will be able to maintain or increase its current audience ratings and
advertising revenues.

The Company's radio stations compete for listeners and advertising revenues
directly with other radio stations within their respective markets. Radio
stations compete for listeners primarily on the basis of program content that
appeals to a particular demographic group. By building a strong listener base
consisting of a specific demographic group in each of its markets, the Company
is able to attract advertisers seeking to reach those listeners. In addition,
from time to time other stations may change their format or programming to
compete directly with the Company's stations for audiences and advertisers, or
engage in aggressive promotional campaigns, which could result in lower ratings
and advertising revenues or increased promotion and other expenses and,
consequently, lower earnings and cash flow for the Company. Audience preferences
as to format or programming may also shift due to demographic or other reasons.
Any failure by the Company to respond, or to respond as quickly as its
competitors, could have a material adverse effect on the Company's position in
that market.

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

Although the radio broadcasting industry is highly competitive, some
barriers to entry exist (which can be mitigated to some extent by changing
existing radio station formats and upgrading power, among other actions). The
operation of a radio station requires a license or other authorization from the
FCC, and the number of radio stations that can operate in a given market is
limited by the availability of FM and AM radio frequencies allotted by the FCC
to communities in that market. In addition, the FCC's multiple ownership rules
regulate the number of stations that may be owned and controlled by a single
entity in a given market. The FCC's multiple ownership rules have, in recent
years, changed significantly as a result of the Telecom Act. For a discussion of
FCC regulation and the provisions of the Telecom Act resulting in rapid
consolidation in the radio industry, see "-- Government Regulation -- Federal
Regulation of Radio Broadcasting."

The out-of-home media industry is also 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
terrestrial delivery of digital audio broadcasting. DAB may deliver to
nationwide and regional audiences, multi-channel, multi-format, digital radio
services with sound quality equivalent to compact discs. The FCC has recently
authorized spectrum for the use of a new technology, satellite digital audio
radio services, to deliver audio programming. SDARS may provide a medium for the
delivery by satellite of multiple new audio programming formats to local and
national audiences. It is not known at this time whether digital technology also
may be used in the future by existing radio broadcast stations either on
existing or
39
<PAGE> 46

alternate broadcasting frequencies. There are also proposals before the FCC to
permit a new "low power" radio or "microbroadcasting" service which could open
up opportunities for low cost neighborhood service on frequencies which would
not interfere with existing stations. No FCC action has been taken on these
proposals to date.

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

TDI

The Company participates in the outdoor advertising business through its
wholly owned subsidiary, TDI. TDI is based in New York with 20 branch offices
throughout the United States and 11 throughout the United Kingdom, the Republic
of Ireland and Northern Ireland. TDI is one of the largest outdoor advertising
companies in the United States, operating approximately 100 franchises, the
majority of which are in large metropolitan areas (including New York, Los
Angeles, Atlanta, Washington, D.C., Philadelphia, Chicago, San Francisco,
Minneapolis and Phoenix). Fourteen of the major metropolitan areas in which TDI
operates are also served by the Company's radio stations. TDI sells advertising
space on various media including buses, trains, train platforms and terminals
throughout commuter rail systems, and on billboards and phone kiosks. TDI also
has the exclusive rights to manage advertising space within the London
Underground and on more than 90% of the buses in London and the United Kingdom,
and has the exclusive rights to transit advertising in the Republic of Ireland
and parts of Northern Ireland.

Through both its bus and rail markets, TDI has the ability to target
specific audiences via the specified routes of buses or trains. TDI has the
resources with which to provide clients with comprehensive packages encompassing
displays from its approximately 67,000 buses worldwide and approximately 1,200
billboards, approximately 4,300 phone kiosks, three commuter rail systems and
three main rail stations in New York. As a result, an advertiser can obtain
overall reach or target specific demographic areas.

SEASONALITY

Seasonal revenue fluctuations are common in the out-of-home media industry
and are primarily the result of fluctuations in advertising expenditures by
retailers. The Company's revenues are typically lowest in the first quarter and
highest in the second and fourth quarters.

EMPLOYEES

As of September 30, 1998, the Company had approximately 5,900 full-time
employees and approximately 2,000 part-time employees. Approximately 960 of the
Company's full-time employees are represented by unions. Collective bargaining
agreements with two unions have expired and the Company is currently negotiating
new collective bargaining agreements with such unions. The Company believes that
its relations with its employees and their unions are satisfactory.

The Company employs several high-profile on-air personalities with large
loyal audiences in their respective markets. The Company generally enters into
employment agreements with its on-air talent and commissioned sales
representatives to protect its interests in those relationships that it believes
to be valuable. The Company has entered into employment agreements with certain
of its executive officers and certain other executive officers have employment
agreements with CBS. See "Management -- Employment Agreements."

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<PAGE> 47

GOVERNMENT REGULATION

Federal Regulation of Radio Broadcasting

The ownership, operation and sale of radio stations are subject to the
jurisdiction of the FCC, which acts under authority granted by the
Communications Act. Among other things, the FCC assigns frequency bands for
broadcasting; determines the particular frequencies, locations and operating
power of stations; issues, renews, revokes and modifies station licenses;
determines whether to approve changes in ownership or control of station
licenses; establishes technical requirements for certain transmitting equipment
used by stations; and adopts and implements regulations and policies that
directly or indirectly affect the ownership, operation and employment practices
of stations. The FCC has the power to impose penalties for violation of its
rules or the Communications Act, including the imposition of monetary
forfeitures, the issuance of short-term licenses, the imposition of a condition
on the renewal of a license, and the revocation of operating authority.

The following is a brief summary of certain provisions of the
Communications Act and of specific FCC regulations and policies. Reference
should be made 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 radio stations.

FCC Licenses. Generally, the FCC renews radio broadcast licenses without a
hearing upon finding that: (i) the radio station has served the public interest,
convenience and necessity; (ii) there have been no serious violations by the
licensee of the Communications Act or FCC rules and regulations; and (iii) there
have been no other violations by the licensee of the Communications Act or FCC
rules and regulations that, taken together, indicate a pattern of abuse. After
considering these factors, the FCC may grant the license renewal application
with or without conditions, including renewal for a term lesser than the maximum
otherwise permitted, or hold an evidentiary hearing. In addition, the
Communications Act authorizes the filing of petitions to deny a license renewal
during specific periods of time after a renewal application has been filed.
Interested parties, including members of the public, may use such petitions to
raise issues concerning a renewal applicant's qualifications. If a substantial
and material question of fact concerning a renewal application is raised by the
FCC or other interested parties, or if for any reason the FCC cannot determine
that the grant of the renewal application would serve the public interest,
convenience and necessity, the FCC will hold an evidentiary hearing on the
application. If as a result of an evidentiary hearing the FCC determines that
the licensee has failed to meet the requirements specified above and that no
mitigating factors justify the imposition of a lesser sanction, then the FCC may
deny a license renewal application. Only after a license renewal application is
denied will the FCC accept and consider competing applications for the vacated
frequency. Historically, FCC licenses have generally been renewed. The Company
has no reason to believe that its licenses will not be renewed in the ordinary
course, although there can be no assurance to that effect. The non-renewal of
the Company's licenses could have a material adverse effect on the Company.

Ownership Matters. The Communications Act prohibits the assignment of a
broadcast license or the transfer of control of a broadcast licensee without the
prior approval of the FCC. In determining whether to grant such approval, the
FCC considers a number of factors pertaining to the proposed assignee or
transferee, including compliance with the various rules limiting common
ownership of media properties in a given market, the "character" of the proposed
assignee or transferee and those persons holding "attributable" interests
therein, and compliance with the Communications Act's limitations on alien
ownership as well as compliance with other FCC policies, including FCC equal
employment opportunity requirements. The equal opportunity requirements, as they
relate to outreach efforts for the recruitment of minorities, have been declared
unconstitutional by the U.S. Court of Appeals for the D.C. Circuit, and the
court recently declined to review the decision en banc.

A transfer of control of a corporation holding a broadcast license may
occur in various ways. For example, a transfer of control occurs if an
individual stockholder gains or loses "affirmative" or "negative" control of
such corporation through issuance, redemption or conversion of stock.
"Affirmative" control would consist of control of more than 50% of such
corporation's outstanding voting power and "negative" control would consist of
control of exactly 50% of such voting power. To obtain the FCC's prior consent
to assign or transfer control of a broadcast license, appropriate applications
must be filed with the FCC. If the application involves a

41
<PAGE> 48

"substantial change" in ownership or control, in that new individuals approved
by the FCC propose to acquire "affirmative" or "negative" control, the
application must be placed on public notice for a period of not less than 30
days during which petitions to deny or other objections against the application
may be filed by interested parties, including members of the public. Informal
objections may be filed any time up until the FCC acts upon the application. If
the application does not involve a "substantial change" in ownership or control,
it is a "pro forma" application, which is not subject to the 30-day petition to
deny procedure. The "pro forma" application is nevertheless subject to having
informal objections filed against it. If the FCC grants an assignment or
transfer application, interested parties have not less than 30 days from public
notice of the grant to seek reconsideration of that grant. Generally, parties
that do not file initial petitions to deny or informal objections against the
application face a high hurdle in seeking reconsideration of the grant. The FCC
normally has approximately an additional ten days to set aside on its own motion
any grant made by the FCC staff acting pursuant to delegated authority. When
passing on an assignment or transfer application, the FCC is prohibited from
considering whether the public interest might be served by an assignment or
transfer of the broadcast license to any party other than the assignee or
transferee specified in the application.

As a consequence of passage of the Telecom Act, the FCC amended its
multiple ownership rules to eliminate the national limits on the ownership of AM
and FM stations. Additionally, it established new local ownership rules that use
a sliding scale of permissible ownership, depending on market size. In radio
markets with 45 or more commercial radio stations, a party may own, operate or
control up to eight stations, no more than five of which can be in a single
radio service (i.e., no more than five AM or five FM). In radio markets with 30
to 44 commercial radio stations, a party may own, operate or control up to seven
stations, no more than four of which can be in a single radio service. In radio
markets having 15 to 29 commercial radio stations, a party may own, operate or
control up to six radio stations, no more than four of which can be in a single
radio service. Finally, in radio markets having 14 or fewer commercial radio
stations, a party may own, operate or control up to five radio stations, no more
than three of which can be in the same service; provided that the party may not
own more than one half of the total number of radio stations in the market. FCC
ownership rules continue to permit an entity to own one FM and one AM station in
a local market regardless of market size. In addition to the numerical
limitations on ownership depending on market size, the FCC is currently pursuing
a new policy that involves review of proposed transactions if they would enable
a single owner or two owners to attain a high degree of revenue concentration in
a market.

The FCC's "one-to-a-market" rule prohibits the common ownership, operation
or control of a radio broadcast station and a television broadcast station
serving the same geographic market (subject to a waiver of such prohibition if
certain conditions are satisfied) and the common ownership, operation or control
of a radio broadcast station and a daily newspaper serving the same geographic
market. Under these rules, absent waivers, neither the Company nor CBS would be
permitted to acquire any daily newspaper or television broadcast station (other
than low-power television) in any geographic market in which the Company now
owns radio broadcast properties. CBS has received, in the past, numerous
permanent and temporary waivers to permit ownership of a television station and
numerous radio stations in the same market. The temporary waivers, which affect
39 of the Company's radio stations, are subject to the outcome of pending
rulemaking proceedings focusing upon the possible relaxation of the
"one-to-a-market" rule. If these waivers are not made permanent, divestitures of
certain of the Company's radio stations or of CBS's television stations may be
required within certain time periods specified by the FCC. On October 1, 1996,
the FCC commenced a proceeding to explore possible revisions of its policies
concerning waiver of the newspaper/radio cross-ownership restrictions.

The FCC generally applies its ownership limits to "attributable" interests
held by an individual, corporation, partnership or other association. In the
case of corporations holding, or through subsidiaries controlling, broadcast
licenses, the interests of officers, directors and those who, directly or
indirectly, have the right to vote 5% or more of the corporation's voting stock
(or 10% or more of such stock in the case of insurance companies, investment
companies and bank trust departments that are passive investors) are generally
attributable. If a single individual or entity controls more than 50% of a
corporation's outstanding voting stock, that individual or entity is viewed as a
single majority stockholder; thus, the FCC views CBS as a single majority
stockholder of the Company. In the case of a single majority stockholder, the
interests of other

42
<PAGE> 49

stockholders are not attributable unless the stockholders are also officers or
directors of the corporation. To assess whether a voting stock interest in a
direct or indirect parent corporation of a broadcast licensee is attributable,
the FCC uses a "multiplier" analysis in which non-controlling voting stock
interests are deemed proportionally reduced at each non-controlling link in a
multi-corporation ownership chain. The FCC treats all partnership interests as
attributable, except for those limited partnership interests that under FCC
policies are considered "insulated" from "material involvement" in the
management or operation of media-related activities of the partnership. The FCC
currently treats limited liability companies like limited partnerships for
purposes of attribution. Similarly, under the FCC's attribution criteria, the
ownership interests of trustors and beneficiaries are not treated as
attributable if these interests are sufficiently insulated to prevent the
exercise of control or influence over the trustee. The FCC is currently
reviewing its attribution rules to determine whether changes in those rules are
appropriate, including whether to continue the attribution exception in the case
of a single majority stockholder.

In determining whether the Company is in compliance with the local
ownership limits on AM and FM stations, the FCC will consider the Company's AM
and FM holdings, as well as the attributable broadcast interests of the
Company's officers, directors and attributable stockholders, such as CBS.
Accordingly, the attributable broadcast interests of the Company's officers and
directors described in the preceding paragraph, as well as attributable
broadcast interests of CBS, will limit the number of radio stations the Company
may acquire or own in any market in which CBS or such officers or directors hold
or acquire attributable interests. In addition, the Company's officers and
directors or the officers and directors of CBS may from time to time hold
various non-attributable interests in media properties, which, under certain
circumstances, may also limit the number of radio stations the Company may
acquire or own in a given market.

Under its "cross-interest" policy, the FCC considers certain "meaningful"
relationships among competing media outlets that serve "substantially the same
area," even if the ownership rules do not specifically prohibit the
relationship. Under the cross-interest policy, the FCC in certain instances may
prohibit one party from holding an attributable interest in one media outlet and
a substantial non-attributable economic interest in another media outlet in the
same market. Under this policy, the FCC may consider significant equity
interests combined with an attributable interest in a media outlet in the same
market, joint ventures, or common key employees among competitors. The
cross-interest policy does not necessarily prohibit all of these interests, but
requires that the FCC consider whether, in a particular market, the "meaningful"
relationships between competitors could have a significant adverse effect upon
economic competition and program diversity. Heretofore, the FCC has not applied
its cross-interest policy to TBAs and joint sales agreements ("JSAs") between
broadcast stations. In its ongoing rulemaking proceeding concerning the
attribution rules described below, the FCC has sought comment on, among other
things: (i) whether the cross-interest policy should be applied only in smaller
markets; and (ii) whether non-equity financial relationships such as debt, when
combined with multiple business interrelationships such as TBAs and JSAs, raise
concerns under the cross-interest policy.

The Communications Act prohibits the issuance of broadcast licenses to, or
the holding of broadcast licenses by, any corporation of which more than 20% of
the capital stock is owned of record or voted by non-U.S. citizens or their
representatives or by a foreign government or a representative thereof, or by
any corporation organized under the laws of a foreign country. The
Communications Act also authorizes the FCC, if the FCC determines that it would
be in the public interest, to prohibit the issuance of a broadcast license to,
or the holding of a broadcast license by, any corporation directly or indirectly
controlled by any other corporation (such as CBS in the case of the Company) of
which more than 25% of the capital stock is owned of record or voted by Aliens.
The FCC staff has interpreted this provision to require a public interest
finding in favor of such a grant or holding before a broadcast license may be
granted to or held by any such corporation. The FCC has issued interpretations
of existing law: (i) under which these restrictions in modified form apply to
other forms of business organizations, including partnerships; and (ii)
indicating how alien interests in a company that are held directly through
intermediate entities should be considered in determining whether that company
is in compliance with these alien ownership restrictions. As a result of these
provisions, the licenses granted to the Company by the FCC could be revoked if
more than 20% of the Company's stock were directly or indirectly voted by Aliens
or if more than 25% of CBS's stock were directly or indirectly held or voted by

43
<PAGE> 50

Aliens. The Company's Restated Certificate restricts the ownership, voting and
transfer of the Company's capital stock in accordance with the Communications
Act and the rules of the FCC, and prohibits the issuance of more than 20% of the
Company's outstanding capital stock (or more than 20% of the voting rights it
represents) to or for the account of Aliens. The Restated Certificate authorizes
the Company's Board of Directors to enforce these prohibitions. In addition, the
Restated Certificate provides that shares of capital stock of the Company
determined by the Company's Board of Directors to be owned beneficially by an
Alien or an entity directly or indirectly owned by Aliens in whole or in part
shall be subject to redemption by the Company by action of the Board of
Directors to the extent necessary, in the judgment of the Board of Directors, to
comply with these alien ownership restrictions.

Time Brokerage Agreements. Over the past few years, a number of radio
stations have entered into what have commonly been referred to as TBAs. While
these agreements may take varying forms, under a typical TBA, separately owned
and licensed radio stations agree to enter into cooperative arrangements of
varying sorts, subject to compliance with the requirements of antitrust laws and
with the FCC's rules and policies. Under these arrangements, separately owned
stations could agree to function cooperatively in programming, advertising sales
and similar matters, subject to the requirement that the licensee of each
station maintain independent control over the programming and operations of its
own station. One typical type of TBA, commonly referred to as a local marketing
agreement ("LMA"), is a programming agreement between two separately owned radio
stations serving a common service area, whereby the licensee of one station
provides substantial portions of the broadcast programming for airing on the
other licensee's station, subject to ultimate editorial and other controls being
exercised by the latter licensee, and sells advertising time during those
program segments.

The FCC has specifically revised its "cross-interest" policy to make that
policy inapplicable to TBAs. Furthermore, the staff of the FCC's Mass Media
Bureau has held that TBAs are not contrary to the Communications Act provided
that the licensee of the station that is being substantially programmed by
another entity: (i) maintains complete responsibility for, and control over,
programming and operations of its broadcast station; and (ii) assures compliance
with applicable FCC rules and policies.

The FCC's multiple ownership rules specifically permit radio station TBAs
to continue to be entered into and implemented, but provide that a licensee or a
radio station that brokers more than 15% of the weekly broadcast time on another
station serving the same market will be considered to have an attributable
ownership interest in the brokered station for purposes of the FCC's multiple
ownership rules. As a result, in a market where it owns a radio station, the
Company would not be permitted to enter into a TBA with another local radio
station in the same market that it could not own under the local ownership
rules, unless the Company's programing on the brokered station constituted 15%
or less of the other local station's programming time on a weekly basis. The FCC
rules also prohibit a broadcast licensee from simulcasting more than 25% of its
programming on another station in the same broadcast service (i.e., AM-AM or
FM-FM) through a TBA where the brokered and brokering stations which it owns or
programs serve substantially the same area. Such 25% simulcasting limitation
also applies to commonly owned stations in the same broadcast service that serve
substantially the same area.

The Company is party to LMAs in three markets, and all but one of these
LMAs are in connection with the pending acquisition and disposition of stations
from and to Entercom Communications Corp. These LMAs are interim agreements
pending consummation of such acquisitions and dispositions following FCC
approval of such acquisitions and dispositions, which approval has already been
granted. In addition, the Company is party to an LMA with a station in Buffalo,
NY, pursuant to which the Company has acquired virtually all of the programming
time on the station and is entitled to sell all of the advertising inventory
within such acquired time. All of the foregoing LMAs involve programming more
than 15% of the broadcast time of the relevant station.

Joint Sales Agreements. Over the past few years, a number of radio
stations have entered into cooperative arrangements commonly knows as JSAs.
While these agreements may take varying forms, under the typical JSA, a station
licensee obtains, for a fee, the right to sell substantially all of the
commercial advertising on a separately-owned and licensed station in the same
market. The typical JSA also customarily

44
<PAGE> 51

involves the provision by the selling party of certain sales, accounting and
"back office" services to the station whose advertising is being sold. The
typical JSA is distinct from a TBA in that a JSA normally does not involve
programming.

The FCC has determined that issues of joint advertising sales should be
left to enforcement by antitrust authorities, and therefore does not generally
regulate joint sales practices between stations. Currently, stations for which
another licensee sells time under a JSA are not deemed by the FCC to be an
attributable interest of that licensee. However, in connection with its ongoing
rulemaking proceeding concerning the attribution rules, the FCC is considering
whether JSAs should be attributable interests or within the scope of the FCC's
cross-interest policy, particularly when JSAs contain provisions for the supply
of programming services and/or other elements typically associated with TBAs. If
JSAs become attributable interests as a result of changes in the FCC rules, the
Company may be required to terminate any JSA it might have with a radio station
which the Company could not own under the FCC's multiple ownership rules. The
Company at present has no JSAs.

Programming and Operations. The Communications Act requires broadcasters
to serve the "public interest." A licensee is required to present programming
that is responsive to issues of the station's community of license and to
maintain certain records demonstrating such responsiveness. Complaints from
listeners concerning a station's programming often will be considered by the FCC
when it evaluates renewal applications of a licensee, although listener
complaints may be filed at any time, are required to be maintained in the
station's public file and generally may be considered by the FCC at any time.
Stations also must pay regulatory and application fees and follow various rules
promulgated under the Communications Act that regulate, among other things,
political advertising, sponsorship identifications, the advertisement of
contests and lotteries, obscene and indecent broadcasts, and technical
operations, including limits on human exposure to radio frequency radiation. In
addition, the FCC rules require that licensees must develop and implement
affirmative action programs designed to promote equal employment opportunities
and must submit reports to the FCC with respect to these matters on an annual
basis and in connection with a renewal application. However, the U.S. Court of
Appeals for the D.C. Circuit has declared these rules unconstitutional and the
Court recently declined to review the decision en banc. In addition, the FCC
recently has proposed to establish a system of random audits to ensure and
verify licensee compliance with various FCC rules and regulations.

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 eight-year term) license renewal, the
imposition of a condition on the renewal of a license or, for particularly
egregious violations, the denial of a license renewal application or the
revocation of a license.

Proposed and Recent Changes. The FCC has pending a rulemaking proceeding
that seeks, among other things, comment on whether the FCC should modify its
radio and television broadcast ownership "attribution" rules by: (i) raising the
basic benchmark for attributing ownership in a corporate licensee from 5% to 10%
of the licensee's outstanding voting power; (ii) increasing from 10% to 20% of
the licensee's outstanding voting power the attribution benchmark for
institutional investors in corporate licensees holding interests deemed
"passive" in nature; (iii) attributing certain minority stockholdings in
corporations with a single majority stockholder; and (iv) attributing certain
LMAs, TBAs, JSAs, debt or non-voting stock interests that have heretofore been
non-attributable.

Moreover, Congress and the FCC have under consideration, and in the future
may consider and adopt, new laws, regulations and policies regarding a wide
variety of matters that could affect, directly or indirectly, 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 to
finance those acquisitions. Such matters may include spectrum use or other fees
on FCC licenses; foreign ownership of broadcast licenses; revisions to the FCC's
equal employment opportunity rules and rules 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 attribution policies; new
technologies such as DARS and microbroadcasting; and the development of rules to
govern auctions for the right to use the radio broadcast spectrum. Finally, as
required by the Telecom Act, the FCC has instituted a proceeding to investigate,
among

45
<PAGE> 52

other things, the effect of the revised ownership rules for radio stations
adopted in accordance with the Telecom Act, and the resulting consolidation in
the radio industry, on the diversity of programming and ownership, and on
programming and advertising competition. The FCC may conclude, as a consequence
of this review, to modify the radio ownership rules.

The Company cannot predict what other matters might be considered in the
future by the FCC or Congress, nor can it judge in advance what impact, if any,
the implementation of any of these proposals or changes might have on its
business.

Outdoor Advertising. The outdoor advertising industry is subject to
governmental regulation at the federal, state and local level. These include
regulations on the construction, repair, upgrading, height, size and location
of, and, in some instances, content of advertising copy being displayed on
outdoor advertising structures adjacent to federally-aided highways and to other
thoroughfares. Regulations affecting outdoor advertising at any level of
government could have a material adverse effect on the Company.

Alcohol and Tobacco Advertising. There are significant legal and
regulatory constraints on the use of out-of-home media to advertise alcohol and
tobacco products. Additional limitations have been proposed from time to time,
particularly in connection with a possible global settlement of tobacco-related
litigation. The Company is not aware of similar proposals to further restrict
alcohol advertising, although any significant reduction in beer and wine
advertising could have a material adverse effect on the Company.

Antitrust. An element of the Company's growth strategy involves the
acquisition of additional radio stations and other outdoor advertising
properties, many of which are likely to require antitrust review by the FTC and
the DOJ prior to such acquisition. Following passage of the Telecom Act, the DOJ
has become more aggressive in reviewing proposed acquisitions of radio stations
and radio station networks, particularly in instances where the proposed
acquirer already owns one or more radio station properties in a particular
market and the acquisition involves another radio station in the same market.
Recently, the DOJ has obtained consent decrees requiring radio station
divestitures in a particular market based on allegations that acquisitions would
lead to unacceptable concentration levels. The DOJ has also been active in
reviewing proposed acquisitions of outdoor advertising properties. There can be
no assurance that the DOJ or the FTC will not seek to bar the Company from
acquiring additional radio stations or other media-related and outdoor
advertising properties in any market where the Company already has a significant
position. In addition, to the extent the Company makes acquisitions of
international broadcasting properties or display faces, the Company will also be
subject to the antitrust laws of foreign jurisdictions.

Environmental. As the owner, lessee or operator of various real properties
and facilities, the Company is subject to various federal, state and local
environmental laws and regulations. Historically, compliance with such laws and
regulations has not had a material adverse effect on the Company's business.
There can be no assurance, however, that compliance with existing or new
environmental laws and regulations will not require the Company to make
significant expenditures in the future.

PROPERTIES

The Company's corporate headquarters are located in midtown Manhattan and
are leased from third parties. The types of properties required to support each
of the Company's radio stations include offices, studios, transmitter sites and
antenna sites. A station's studios are generally housed with its offices in
downtown or business districts. The transmitter sites and antenna sites are
generally located so as to provide maximum market coverage. TDI's transit
displays are owned by the transit system or other franchisor and are managed by
the Company pursuant to three to five year agreements, and its outdoor displays
are generally located on leased properties.

No one property is material to the Company's overall operations. The
Company believes that its properties are in good condition and suitable for its
operations; however, the Company continually looks for opportunities to upgrade
its properties.

The Company owns substantially all of the equipment used in its radio
broadcasting business.

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<PAGE> 53

LEGAL PROCEEDINGS

The Company is party to various legal proceedings arising in the ordinary
course of business. In the opinion of management of the Company, however, there
are no legal proceedings pending against the Company likely to have a material
adverse effect on the Company. For a description of certain matters before the
FCC, see "-- Government Regulation."

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<PAGE> 54

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The following table sets forth the name, age and position of each of the
directors and executive officers of the Company as of November 1, 1998.
Executive officers are elected by the Board of Directors and hold office until
the earlier of his or her resignation and removal.

<TABLE>
<CAPTION>
NAME AGE POSITIONS
---- --- ---------
<S> <C> <C>
Mel Karmazin...................... 55 Chairman, President and Chief Executive Officer
and Director
Farid Suleman..................... 47 Executive Vice President, Chief Financial Officer,
Treasurer and Secretary and Director
Daniel Mason...................... 47 President, Infinity Radio Group, and Vice
President of the Company
William Apfelbaum................. 51 President and Chief Executive Officer, TDI
</TABLE>

Messrs. Karmazin and Suleman are employees of CBS and will provide services
to the Company pursuant to the terms of the Intercompany Agreement. As employees
of CBS, Messrs. Karmazin and Suleman will continue to render services to CBS.
See "Risk Factors -- Risks Relating to Control by CBS" and "Relationships
Between the Company and CBS."

Mr. Karmazin has been Chairman, President and Chief Executive Officer and a
Director of the Company since September 17, 1998. He joined CBS (then
Westinghouse Electric Corporation) in December 1996 as Chairman and Chief
Executive Officer of CBS Radio. In May 1997, he also assumed responsibility for
CBS's owned television stations and became Chairman and Chief Executive Officer
of the CBS Station Group. In April 1998, Mr. Karmazin became President and Chief
Operating Officer of CBS Corporation, and Mr. Karmazin will become Chief
Executive Officer of CBS Corporation on January 1, 1999. Mr. Karmazin was first
elected to the Board of CBS Corporation in 1997. Prior to joining CBS, from 1981
to 1988, Mr. Karmazin served as Executive Vice President of Old Infinity and,
from 1988 until its acquisition by CBS in December 1996, as its President and
Chief Executive Officer. Mr. Karmazin is a Director of Westwood One and a member
of the Board of Trustees for the Museum of Television and Radio.

Mr. Suleman has been Executive Vice President, Chief Financial Officer,
Treasurer and Secretary and a Director of the Company since September 17, 1998.
He has been Senior Vice President and Chief Financial Officer of the CBS Station
Group since June 1997 and Senior Vice President -- Finance of CBS Corporation
since August 1998. From January 1997 to June 1997, he served as Senior Vice
President and Chief Financial Officer of CBS Radio. Prior to joining CBS, he was
Vice President -- Finance and Chief Financial Officer of Old Infinity from 1986
until 1996. Mr. Suleman has also been the Executive Vice President, Chief
Financial Officer, Secretary and a Director of Westwood One since February 1994.

Mr. Mason has been Vice President of the Company since September 17, 1998.
He has been President of CBS Radio (renamed Infinity Radio) since November 1995.
From 1993 to 1995, Mr. Mason served as President of Group W Radio. Mr. Mason was
President of Cook Inlet Radio Partners, LP from 1988 to 1993. Mr. Mason is
currently a member of the Board of Directors of the National Association of
Broadcasters.

Mr. Apfelbaum has been President and Chief Executive Officer of TDI since
August 1989. Prior to joining TDI, from July 1988 to July 1989, Mr. Apfelbaum
served as President of Gannett Transit, Inc. (formerly New York Subway
Advertising Co., Inc.). From 1971 to 1988, Mr. Apfelbaum served as President of
New York Subway Advertising Co., Inc. Mr. Apfelbaum is a Director of the America
Foundation for Aids Research (AmFAR).

Promptly following the consummation of the Offerings, CBS and the Company
expect to elect two additional directors of the Company who will be independent
directors. The Board of Directors will then consist of eight members, including
six who are directors, officers or executives of CBS. For so long as CBS
maintains voting control of the Company, it will have the ability to change the
size and composition of the Board of Directors. Members of the Board of
Directors will be divided into three classes with staggered three-
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<PAGE> 55

year terms and each class as equal in number as possible. Each director will
hold office until the end of the term for the respective class to which such
director is assigned and otherwise in accordance with the By-Laws.

EMPLOYMENT AGREEMENTS

In June 1996, Mr. Karmazin entered into an employment agreement with CBS
that became effective on December 31, 1996, the time of the acquisition of Old
Infinity by CBS. The employment agreement will terminate on December 31, 2000.
The employment agreement provides for an initial annual base salary of $925,000
and, thereafter, Mr. Karmazin's annual base salary shall be subject to merit
review and may be increased (but not decreased) at the sole discretion of the
CBS Compensation Committee. The employment agreement provides that Mr. Karmazin
will have the opportunity to receive performance-based annual incentive bonuses
with a target award opportunity of $1,500,000 and to defer payment of any such
bonuses under CBS's deferral program as in effect from time to time. Mr.
Karmazin received a stock option grant pursuant to the employment agreement on
December 31, 1996, for 500,000 CBS shares, with the options generally becoming
exercisable after the first and second anniversaries of the grant date. All
previously granted unvested options shall vest effective: (i) on the date of Mr.
Karmazin's death; (ii) upon the occurrence of a change in control of the
Westinghouse/CBS Radio Group; or (iii) on the date on which Mr. Karmazin's
employment is terminated without cause or for disability. The employment
agreement provides that Mr. Karmazin's employment is terminable for cause upon
the occurrence of any: (i) action involving willful malfeasance or gross
misconduct in connection with such employment having a material adverse effect
on CBS; (ii) substantial and continuing refusal to perform ordinary duties of a
chief executive officer; or (iii) felony conviction. In the event Mr. Karmazin's
employment is terminated without cause or CBS otherwise breaches the employment
agreement, CBS would be obligated to pay to Mr. Karmazin a lump-sum payment
equal to the compensation, including annual incentive compensation, that
otherwise would have been paid to Mr. Karmazin for the remainder of the term of
the employment agreement.

In May 1996, Mr. Mason entered into an employment agreement with CBS
Broadcasting Inc. (formerly CBS Inc.) that became effective as of November 28,
1995. The agreement was amended as of January 29, 1997. The employment
agreement, which will terminate on November 27, 1999, provided for an initial
annual base salary of $575,000, which increased to $815,000 as of January 1,
1997, and, thereafter, Mr. Mason's annual base salary is subject to merit review
and may be increased in accordance with CBS compensation guidelines. The
employment agreement also provides that Mr. Mason will have the opportunity to
receive performance-based annual incentive bonuses with a target award
opportunity of 40% of Mr. Mason's annual base salary. Mr. Mason's employment is
terminable for cause upon the occurrence of any: (i) fraud, misappropriation or
embezzlement; or (ii) the willful failure to perform services under the
employment agreement. In the event that Mr. Mason's employment is terminated
other than for cause, CBS Broadcasting Inc. would be obligated to pay to Mr.
Mason his base salary for the remainder of the term of the agreement, so long as
he is ready, willing and able to render services under the agreement. In the
event that Mr. Mason terminates his employment for good reason (as described in
the agreement), CBS Broadcasting Inc. will be obligated to pay Mr. Mason an
amount equal to his annual base salary.

In December 1989, Mr. Apfelbaum entered into an employment agreement with
TDI that was amended in March 1996 at the time of the acquisition of TDI by Old
Infinity. The employment agreement will terminate on March 25, 2001. The
employment agreement provides for an annual base salary of $950,000 and that Mr.
Apfelbaum will have the opportunity to receive performance-based annual
incentive bonuses with a target award opportunity of $1,000,000. Mr. Apfelbaum's
employment is terminable for cause upon the occurrence of any: (i) felony or act
of bad faith having a material adverse affect on TDI; (ii) breach of the
agreement that is unremedied; or (iii) willful failure or refusal to follow the
reasonable directions of the Board of TDI as are consistent with his duties as
President and Chief Executive of TDI. In the event that Mr. Apfelbaum's
employment is terminated by the Board of TDI, TDI would be obligated to pay to
Mr. Apfelbaum his base salary and benefits for the remainder of the contract in
accordance with the terms of the employment agreement.

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<PAGE> 56

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors expects to establish an Audit Committee and a
Compensation Committee. The Audit Committee of the Board of Directors will
consist of at least two independent directors. The Audit Committee will review
and report to the Board of Directors with respect to the selection, retention,
termination and terms of engagement of the Company's independent public
accountants, and maintain communications among the Board of Directors, the
independent public accountants and the Company's internal accounting staff with
respect to accounting and audit procedures. The Audit Committee will also
review, with management and the Company's independent auditors, the Company's
annual financial statements, the adequacy of the Company's internal accounting
and control procedures and policies and related matters. The Compensation
Committee will consist of at least two persons who are non-employee directors
within the meaning of Rule 16b-3 under the Exchange Act and outside directors
within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as
amended. The Compensation Committee will be responsible for administering the
Company's stock plans and reviewing and making decisions with respect to the
other compensation of executive officers and key executives of the Company. The
Board may, from time to time, establish other committees of the Board.

COMPENSATION OF DIRECTORS

Directors who are officers or employees of CBS or any of its subsidiaries
(including the Company) will not be compensated for service on the Board of
Directors or any committee thereof. It is anticipated that non-employee
directors will receive an annual fee, payable in cash or in a combination of
cash and securities of the Company and that directors will be reimbursed for
out-of-pocket expenses incurred in connection with such services.

COMPENSATION, BENEFIT AND RETIREMENT PLANS

As described below, prior to the consummation of the Offerings, the Company
is expected to adopt, and the stockholder of the Company is expected to approve,
a long-term incentive plan and an annual incentive plan in which certain key
executives of the Company are expected to participate after the consummation of
the Offerings. Prior to the consummation of the Offerings, the Named Executive
Officers (as defined herein) were eligible to participate in certain executive
benefit plans of CBS, including the CBS 1993 Long-Term Incentive Plan (the "CBS
Stock Plan"), the CBS Annual Performance Plan (the "CBS Annual Bonus Plan") and,
in the case of Mr. Karmazin only, the CBS 1998 Executive Annual Incentive Plan.
After completion of the Offerings, the Named Executive Officers will continue to
hold options to acquire CBS common stock. Further, after completion of the
Offerings, as part of the compensation paid by CBS for services rendered to CBS
and the Company: (i) Mr. Karmazin will continue to be eligible under and
participate in the CBS Stock Plan and the CBS 1998 Executive Annual Incentive
Plan; and (ii) Mr. Suleman will continue to be eligible under and participate in
the CBS Stock Plan and the CBS Annual Bonus Plan. None of the Named Executive
Officers, other than Messrs. Karmazin and Suleman, is expected to be eligible to
participate in the CBS Stock Plan or the CBS Annual Bonus or 1998 Executive
Annual Incentive Plans. The Company will reimburse CBS for any direct costs,
distributions and other expenses associated with post-Offerings payments to
Company employees in respect of the CBS Stock Plan and the other CBS plans
referred to above pursuant to the terms of the Intercompany Agreement. See
"Relationships Between the Company and CBS -- Intercompany
Arrangements -- Intercompany Agreement."

EXECUTIVE COMPENSATION

Compensation Summary. For 1997, the Company's executive officers were
compensated by CBS or subsidiaries thereof for services rendered to CBS and its
subsidiaries (including subsidiaries of the Company), participated in executive
benefit plans sponsored by CBS and did not receive compensation from the
Company. The following table reflects compensation awarded to, earned by or paid
to the Company's Chief Executive Officer and the three most highly compensated
executive officers, other than the Chief Executive Officer of the Company (the
"Named Executive Officers"), for services rendered in all capacities to CBS for
the fiscal year ended December 31, 1997.
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<PAGE> 57

SUMMARY COMPENSATION TABLE FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------- ---------------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION AWARD(S) OPTIONS(3) PAYOUTS COMPENSATION
--------------------------- ---- -------- ---------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mel Karmazin................... 1997 $925,000 $3,000,000(2) N/A 0 500,000 0 $3,749(4)
Chairman, President & Chief
Executive Officer
Farid Suleman.................. 1997 500,000 1,000,000 N/A 0 100,000 0 345(4)
Executive Vice President,
Chief Financial Officer,
Treasurer & Secretary
Daniel Mason................... 1997 815,000 400,000 N/A 0 60,000 0 4,800(5)
President, Infinity Radio
Group, and Vice President of
the Company
William Apfelbaum.............. 1997 950,000 1,000,000 N/A 0 50,000 0 2,289(4)
President & Chief Executive
Officer, TDI
</TABLE>

- ---------------
(1) Represents incentive compensation awarded for 1997. Each of the Named
Executive Officers may elect to defer up to 100% of his annual incentive
award, to be paid either: (i) in one installment in any future year not
later than the year of normal retirement; or (ii) in one installment or
annual installments after termination of service. Amounts deferred by any
such named executive officer are credited with interest based on the
one-year U.S. Treasury Bill rate (or such other rate as determined by the
CBS Compensation Committee), reset every January. In the event of a change
in control of CBS, the value of any unpaid deferred amounts are paid to a
trustee or otherwise on such terms as the CBS Compensation Committee may
prescribe or permit.

(2) The bonus received by Mr. Karmazin for 1997 exceeded his target award
opportunity due to an expansion of Mr. Karmazin's responsibilities, after
his target had been established, to include CBS's owned television stations,
and due to the performance of the businesses under his management.

(3) Represents grants of standard non-qualified stock options to acquire CBS
common stock.

(4) Represents imputed income with respect to executive life insurance.

(5) Represents contributions by CBS to the account of Daniel Mason pursuant to
the provisions of the Westinghouse Savings Program.

Option Grants. The following table provides information on grants of
options in fiscal year 1997 to the Named Executive Officers to purchase shares
of CBS common stock. No options to acquire Common Stock of the Company have been
granted or are outstanding.

OPTION GRANTS OF CBS COMMON STOCK TO COMPANY EXECUTIVES IN YEAR ENDED DECEMBER
31, 1997

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------
% OF TOTAL GRANT DATE
OPTIONS PER PRESENT VALUE(2)
GRANTED TO CBS SHARE ----------------------
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED(1) 1997 PRICE DATE PER SHARE TOTAL
---- ---------- -------------- -------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Mel Karmazin.......................... 500,000 3.9% $18.56 1/28/07 $8.57 $4,285,000
Farid Suleman......................... 100,000 0.8% 18.56 1/28/07 8.57 857,000
Daniel Mason.......................... 60,000 0.5% 18.56 1/28/07 8.57 514,200
William Apfelbaum..................... 50,000 0.4% 18.56 1/28/07 8.57 428,500
</TABLE>

- ---------------
(1) All CBS stock options were granted to the Named Executive Officers on
January 29, 1997. All CBS stock options were granted in tandem with limited
rights. CBS options have a term of ten years from the date of grant or such
lesser term as may be determined by the CBS Compensation Committee. The
exercise price under each option may not be less than the fair market value
of CBS's common stock on the option grant date. Except in the event of a
change in control of CBS, generally an option is exercisable in whole or in
part after the commencement of the second year of its term and until the
option terminates. Limited rights are exercisable only in the event of a
change in control of CBS and during the 30 days immediately following such
change and only when the fair market value on the exercise date exceeds the
exercise price. When a limited right is exercised, the employee is entitled
to receive in cash the difference between the exercise price of the related
option and the greater of: (i) the highest closing sales price of the CBS
common stock on the NYSE during the 60 days prior to exercise; and (ii) the
highest price paid for the CBS common stock in the change in control
transaction during such period. Reload options are granted to employees at
the time of an exercise of a stock option through a stock swap (payment of
the exercise price by surrender of previously owned shares of CBS common
stock), unless the CBS Compensation Committee cancels the reload feature
before such exercise. The reload option is granted for the number of CBS
shares the employee tenders to pay the exercise price of the related option.

(2) These values were derived using the following common assumptions: CBS stock
price volatility 0.3023; dividend yield 1.08%; interest rate 6.3785%; reload
premium 10%; and for each option, its full term and exercise price. There
were no adjustments made for non-transferability or risk of forfeiture. The
values and assumptions were based on the Black-Scholes option pricing model.
The actual value, if any, that an executive officer may realize from his or
her CBS stock options (assuming that they are exercised) will depend solely
on the gain in CBS stock price over the exercise price when the shares are
sold.

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<PAGE> 58

The following table provides information on option exercises in 1997 by the
Named Executive Officers and the value of each such Named Executive Officer's
unexercised options to acquire common stock of CBS at December 31, 1997.

AGGREGATED OPTION EXERCISES IN YEAR ENDED DECEMBER 31, 1997
AND OPTION VALUES AS OF DECEMBER 31, 1997

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT OPTIONS AT
SHARES FISCAL YEAR-END FISCAL YEAR-END(1)
ACQUIRED VALUE ------------------------------ -------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE(2) EXERCISABLE UNEXERCISABLE(2)
---- ----------- -------- ----------- ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Mel Karmazin........... 0 $0 9,262,519 750,000 $235,138,415 $7,601,600
Farid Suleman.......... 0 0 1,473,271 100,000 34,220,261 1,053,130
Daniel Mason........... 0 0 374,500 60,000 4,964,941 631,878
William Apfelbaum...... 0 0 -- 50,000 -- 526,565
</TABLE>

- ---------------
(1) Based on the closing price of CBS's common stock as reported on the NYSE
composite tape on December 31, 1997 ($29.0938).
(2) These options are unexercisable because they have not vested under their
terms.

LONG-TERM INCENTIVES

Prior to the Offerings, the Company expects to adopt the 1998 Long-Term
Incentive Plan (the "1998 Plan"), which will authorize the grant of the
following types of awards to key executives of the Company: (i) incentive stock
options (within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended) and nonstatutory options (intended not to qualify as incentive stock
options), including reload options; (ii) tandem or stand-alone stock
appreciation rights ("SARs") and tandem limited rights; (iii) performance
awards; and (iv) restricted stock and restricted units (hereinafter collectively
referred to as "Awards"). The provisions of the 1998 Plan relating to tandem
limited rights and reload options will be substantially similar in all material
respects to the provisions relating to such rights and options under the CBS
Stock Plan, which are described in footnote (1) to the table set forth under
"-- Executive Compensation -- Option Grants." The maximum number of shares of
Class A Common Stock that may be made subject to Awards granted pursuant to the
1998 Plan is 15,000,000. The 1998 Plan will be administered by the Company's
Compensation Committee. Unless earlier terminated, the 1998 Plan will terminate
on the tenth anniversary of the effective date thereof.

Stock Options. The Compensation Committee will establish the terms of the
stock options and procedures governing the exercise of options. The exercise
price per share for a stock option must be at least the fair market value per
share of the stock as of the date of grant. Options may be exercised at such
times as the Compensation Committee specifies. The Compensation Committee may
provide that if an option is exercised using already-owned stock, such
participant will receive an additional option (a "Reload Option") to purchase a
number of shares equal to the shares used to pay the exercise price at the fair
market value on the day of exercise of the original option. Reload Options will
expire on the expiration date of the original option and will be subject to
other conditions as determined by the Compensation Committee.

Stock Appreciation Rights and Limited Rights. An SAR is an award entitling
the recipient to receive an amount, in cash or stock or a combination thereof,
determined by reference to the appreciation in fair market value of such stock
and may be granted alone or in tandem with stock options. Limited rights to
purchase stock, exercisable for thirty days following a change in control, may
be granted only in tandem with stock options. Tandem SARs and limited rights
terminate on the termination of the related option. Terms and conditions of SARs
and limited rights are determined by the Compensation Committee.

Performance Awards. A performance award provides for the recipient to
receive an amount in cash or stock or a combination thereof contingent upon the
attainment of established performance objectives or upon the occurrence of
established trigger events over a period to be determined by the Compensation
Committee.

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<PAGE> 59

Restricted Stock and Restricted Units. The Compensation Committee may make
awards of restricted stock or restricted units and may determine the length of
the restrictive period, the events which will cause a forfeiture of the award
and any and all other terms and conditions of the award.

Change in Control. In the event of a change in control, a participant
would generally be entitled to the following treatment: (i) each outstanding
option and limited right would be immediately exercisable; (ii) all performance
awards would be deemed earned and paid as prescribed by the Compensation
Committee; (iii) restricted stock and restricted units would become earned and
restrictions would expire; and (iv) any amounts deferred under the 1998 Plan
would be paid to a trustee or otherwise as the Compensation Committee
determines.

Messrs. Karmazin and Suleman will continue to be eligible to receive awards
under the CBS Stock Plan, which authorizes the grant of non-statutory and
incentive stock options (with or without reload options and/or tandem limited
rights), tandem or stand-alone stock appreciation rights, performance awards and
restricted stock and the deferral of award payments.

ANNUAL INCENTIVES

Prior to the Offerings, the Company expects to adopt the Executive Annual
Incentive Plan (the "Annual Incentive Plan"), which would authorize the payment
of annual incentives to key executives of the Company based on the level of
performance achieved against one or more pre-established objective performance
goals for a calendar year (or other specified performance period). The
performance goals will be determined by the Compensation Committee and will be
based on one or more business criteria, such as EBITDA, EBIT, free cash flow,
earnings per share and stock price. Awards to any one participant for a given
performance period will be limited to $6 million (adjusted for increases in the
consumer price index). Awards will be payable in the form determined by the
Compensation Committee, which could include cash, stock options, stock
appreciation rights or other securities of the Company (not including Class B
Common Stock). The Annual Incentive Plan will be administered by the
Compensation Committee, which will have exclusive authority to interpret,
administer, and make determinations under the Annual Incentive Plan, including
the exclusive authority to select participants, establish performance goals and
approve incentive awards.

The maximum number of shares of Class A Common Stock that can be issued
under the Annual Incentive Plan is 1,000,000, and the maximum number of shares
of Class A Common Stock subject to stock options and stock appreciation rights
that may be granted to any one participant under the Annual Incentive Plan in
any one performance period is 600,000. The exercise or reference price of stock
options or stock appreciation rights will not be less than the fair market value
on the grant date.

In the event of a change in control, the Compensation Committee may deem
all or part of any incentive award opportunities to have been earned, and
incentive awards and outstanding derivative securities and deferrals may then be
paid and stock options, stock appreciation rights and other derivative
securities may then be modified as the Compensation Committee prescribes.

Messrs. Karmazin and Suleman will continue to be eligible to receive annual
incentive awards under the CBS 1998 Executive Annual Incentive Plan and the CBS
Annual Bonus Plan, respectively. These plans each provide for the payment of
performance-based annual incentives in the form of cash, stock or other
securities of CBS, or a combination thereof.

RETIREMENT BENEFITS

At the time of the Offerings, it is expected that the Company will: (i)
make available the same tax-qualified defined benefit pension plans for eligible
employees of the Company in which such employees were participating immediately
prior to the Offerings; and (ii) maintain the Old Infinity pension plan, which
is frozen (the "Frozen Infinity Pension Plan").

Mr. Karmazin has a vested benefit under the Frozen Infinity Pension Plan.
Because this plan was frozen effective November 30, 1987, Mr. Karmazin is no
longer accruing any additional benefits under the plan. As of

53
<PAGE> 60

December 31, 1997, the estimated monthly benefit amount payable upon retirement
at normal retirement age to Mr. Karmazin under the Frozen Infinity Pension Plan
is $1,408.

Mr. Mason has a vested benefit under the Group W component of the CBS
Combined Pension Plan (the "Group W Plan"). As of December 31, 1997, the
estimated monthly benefit amount payable upon retirement at normal retirement
age to Mr. Mason under the Group W Plan is $1,284.

Mr. Suleman and Mr. Apfelbaum do not participate in any tax-qualified
defined benefit pension plan sponsored by the Company or CBS.

WESTINGHOUSE PENSION PLAN

During 1997, Mr. Mason participated in the Westinghouse Pension Plan, which
is a defined benefit plan. The Westinghouse Pension Plan is designed to provide
retirement income related to an employee's salary and years of active service.
The cost of the Westinghouse Pension Plan is paid by both CBS and employee
contributions. All CBS contributions are actuarially determined.

In addition to the benefits provided by the Westinghouse Pension Plan, the
Westinghouse Executive Pension Plan (the "Executive Pension Plan") provides for
supplemental pension payments to Mr. Mason. In accordance with the terms of the
Executive Pension Plan, if, upon retirement, Mr. Mason has at least five
continuous years of service as an executive immediately prior to retirement,
meets the retirement eligibility requirements of the Executive Pension Plan and
contributes to the Westinghouse Pension Plan, he will be entitled to receive
supplemental payments under the Executive Pension Plan. Such payments, when
added to his pension under the Westinghouse Pension Plan, result in a total
annual pension equal to 1.47% for each year of executive benefit service
multiplied by his average annual compensation. Average annual compensation is
equal to the sum of the average of the five highest annualized December base
salaries and the average of the five highest annual incentive awards, each in
the last 10 years of employment. In the event of retirement prior to the age 60,
the total annual pension will be reduced by an amount equal to the reduction in
the benefits payable under the Westinghouse Pension Plan. Participants become
vested in the event of a change in control of CBS and benefits under the
Executive Pension Plan may be paid on a present value or other basis.

For purposes of illustration, the following table indicates the approximate
amounts of annual retirement income that would be payable at the present time
under various assumptions as to average annual compensation and years of service
to employees who participate in the Westinghouse Pension Plan and are eligible
for supplemental payments pursuant to the Executive Pension Plan.

WESTINGHOUSE PENSION PLAN AND EXECUTIVE PENSION PLAN TABLE

<TABLE>
<CAPTION>
FIVE-YEAR
AVERAGE
ANNUAL
COMPENSATION
INCLUDING ESTIMATED ANNUAL PENSION FOR SPECIFIED YEARS OF CREDITED SERVICE
INCENTIVE -------------------------------------------------------------------------
AWARD 15 20 25 30 35 40
- --------------- -------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 22,050 $ 29,400 $ 36,750 $ 44,100 $ 51,450 $ 58,800
300,000 66,150 88,200 110,250 132,300 154,350 176,400
500,000 110,250 147,000 183,750 220,500 257,250 294,000
700,000 154,350 205,800 257,250 308,700 360,150 411,600
900,000 198,450 264,600 330,750 307,900 463,050 529,200
1,100,000 242,550 323,400 404,250 485,100 565,950 646,800
1,500,000 330,750 441,000 551,250 661,500 771,750 882,000
2,000,000 441,000 588,000 735,000 882,000 1,029,000 1,176,000
2,500,000 551,250 735,000 918,750 1,102,500 1,286,250 1,470,000
3,000,000 661,500 882,000 1,102,500 1,323,000 1,543,500 1,764,000
3,500,000 771,750 1,029,000 1,286,250 1,543,500 1,800,750 2,058,000
</TABLE>

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<PAGE> 61

The amounts presented in the above table are based upon straight life
annuity amounts and are not subject to any reduction for social security
benefits or other offset amounts. As of December 31, 1997, Mr. Mason had 4.586
credited years of service under the Westinghouse Pension Plan.

Effective January 1, 1998, Mr. Mason was transferred from the Westinghouse
Pension Plan to the Group W Plan, which has terms substantially similar to the
Westinghouse Pension Plan. Mr. Mason continues to participate in the Executive
Pension Plan.

SAVINGS PLANS

At the time of the Offerings, the Company will make available the same
savings plans (tax-qualified under Section 401(k) of the Internal Revenue Code)
for eligible employees of the Company and its subsidiaries, including the Named
Executive Officers (the "Savings Plans"), in which such employees were
participating immediately prior to the Offerings. The Savings Plans will permit
matching employer contributions following the Offerings in the form of cash or
common stock of CBS or the Company and such common stock will be available as an
investment alternative with respect to employee contributions made following the
Offerings.

55
<PAGE> 62

PRINCIPAL STOCKHOLDER AND STOCK OWNERSHIP

STOCK OWNERSHIP OF THE COMPANY

CBS Broadcasting Inc., 51 West 52nd Street, New York, New York 10019, an
indirect wholly owned subsidiary of CBS Corporation, owns all of the outstanding
shares of common stock of the Company. Immediately after consummation of the
Offerings, CBS Broadcasting Inc. will own 700,000,000 shares of Class B Common
Stock, which will represent 83.8% of the outstanding shares of Common Stock and
approximately 96.3% of the combined voting power of the outstanding shares of
Common Stock (approximately 81.8% and 95.8%, respectively, if the Underwriters'
over-allotment options are exercised in full).

STOCK OWNERSHIP OF CBS CORPORATION

The following table sets forth, as of September 30, 1998, the beneficial
ownership of the outstanding common stock, par value $1.00 per share, of CBS
Corporation (the only class of shares of CBS Corporation entitled to voting
rights at such date) by the Company's directors, the Named Executive Officers
and by all of the directors and executive officers of the Company as a group.
Each person has sole voting and investment power over the shares of CBS common
stock reported, except as otherwise noted.

<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER AMOUNT BENEFICIALLY OWNED PERCENT OF CLASS
------------------------ --------------------------- ----------------
<S> <C> <C>
William Apfelbaum................................ 293,495 shares(1) *
Mel Karmazin..................................... 7,816,431 shares(1)(2) 1.1%
Daniel Mason..................................... 454,630 shares(1) *
Farid Suleman.................................... 1,639,218 shares(1)(3) *
All directors and executive officers of the
Company as a group (4 persons)................. 10,203,774 shares(1)(2)(3) 1.4%
</TABLE>

- ---------------
(1) Includes the following CBS shares not owned by the indicated executive
officers on September 30, 1998, but with respect to which they had the right
to acquire beneficial ownership within 60 calendar days through the exercise
of stock options or warrants: Apfelbaum: 50,000; Karmazin 3,583,534; Mason
434,500; and Suleman 1,573,271, respectively.

(2) Includes 2,184,003 CBS shares as to which Mr. Karmazin has voting power but
no investment power.

(3) Includes 17,313 CBS shares held by Mr. Suleman's children.

* Represents less than 1% of the outstanding common stock of CBS Corporation.

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<PAGE> 63

RELATIONSHIPS BETWEEN THE COMPANY AND CBS

GENERAL

CBS is currently the beneficial owner of all the capital stock of the
Company. Following the completion of the Offerings, CBS will continue to be the
controlling stockholder of the Company and will beneficially own 100% of the
outstanding Class B Common Stock, which will represent approximately 96.3% of
the combined voting power of all the outstanding Common Stock and approximately
83.8% of the economic interest in the Company (or approximately 95.8% and 81.8%,
respectively, if the Underwriters' over-allotment options are exercised in
full). For so long as CBS continues to beneficially own shares of Common Stock
representing more than 50% of the combined voting power of the outstanding
Common Stock, it generally will be able to approve any matter submitted to a
vote of the stockholders, including, among other things, the election of the
entire Board of Directors or the amendment of the Restated Certificate and
By-Laws, without the consent of the other stockholders of the Company. In
addition, through its controlling beneficial ownership of the Company (as well
as certain provisions of the Intercompany Agreement discussed below under
"-- Intercompany Arrangements -- Intercompany Agreement"), CBS will be able to
exercise a controlling influence over the business and affairs of the Company,
including determinations with respect to mergers or other business combinations
involving the Company, the acquisition or disposition of assets by the Company,
the Company's access to the capital markets, the payment of dividends and any
change of control of the Company. In the foregoing situations or otherwise,
various conflicts of interest between the Company and CBS could arise.
Furthermore, ownership interests of directors and officers of the Company in
common stock of CBS or service as a director or officer of both the Company and
CBS could create, or appear to create, potential conflicts of interest when
directors and officers are faced with decisions that could have different
implications for the Company and CBS. No assurance can be given that conflicts
of interest will not arise or will be resolved in a manner favorable to the
Company.

CBS has advised the Company that its current intent is to continue to hold
all the Class B Common Stock beneficially owned by it following the Offerings.
However, CBS has no contractual obligation to retain its shares of Class B
Common Stock. CBS has agreed not to sell or otherwise dispose of any shares of
Class B Common Stock of the Company for a period of 180 days after the date of
this Prospectus without the prior written consent of Merrill Lynch, Pierce,
Fenner & Smith Incorporated. As a result, there can be no assurance concerning
the period of time during which CBS will maintain its beneficial ownership of
Common Stock owned by it following the Offerings. In addition, the Company has
agreed that it will, upon the request of CBS, use its best efforts to effect the
registration under applicable federal and state securities laws of any shares of
Common Stock held by CBS or any of its affiliates. See "-- Intercompany
Arrangements -- Intercompany Agreement."

COMPETITION

Because CBS and the Company are both engaged in the sale of advertising
time and space, there exist numerous actual and potential conflicts of interest
between them. The Company and CBS will to some extent be competing with each
other when offering their products and services to potential customers, who
often are deciding how much of their advertising budgets to allocate to
television, radio, outdoor or other media. In addition, as a major advertiser,
CBS from time to time utilizes the Company's advertising time and space.
Similarly, the Company promotes its programming on stations and networks owned
by CBS.

The Restated Certificate provides that, subject to any contractual
agreements of the Company to the contrary, CBS will have the right to compete
with the Company.

BOARD OF DIRECTORS

Promptly following the consummation of the Offerings, CBS and the Company
expect to elect two additional directors of the Company who will be independent
directors. The Board of Directors will then consist of eight members, including
six who are directors, officers or executives of CBS. See "Management --
Directors and Executive Officers of the Company." Members of the Board of
Directors will be divided into

57
<PAGE> 64

three classes and serve staggered three-year terms. CBS will have the ability to
change the size and composition of the Company's Board of Directors.

INTERCOMPANY ARRANGEMENTS

Historically, the Company and CBS have maintained a number of financial and
administrative arrangements and regularly engaged in transactions with each
other and other respective affiliates. The Company's ongoing relationship with
CBS will be governed by, among other things, certain agreements to be entered
into prior to the Offerings and possibly in the future, including the
Intercompany Agreement and the Tax Sharing Agreement, the material terms of
which are summarized below. The agreements entered into in connection with the
Offerings generally will maintain the relationship between the Company and CBS
in a manner consistent in all material respects with past practice. It is the
intention of the Company and CBS that such agreements and the transactions
provided for therein, taken as a whole, should accommodate the parties'
interests in a manner that is fair to both parties. However, neither of these
agreements have resulted, nor will any agreements entered into in the future
between the Company and CBS (for so long as CBS maintains controlling beneficial
ownership in the Company) result, from arm's-length negotiations and, as a
result, certain of the terms of such agreements may be less favorable to the
Company than could be obtained from unaffiliated third parties. Moreover, many
of the transactions between the Company and CBS are of an informal nature and do
not lend themselves to formulaic allocations of costs and benefits. Thus, there
inevitably will be some discretion left to the parties, who are subject to the
potentially conflicting interests described above and under "Risk
Factors -- Risks Relating to Control by CBS."

In addition, to the extent that the Company derives benefits from its close
relationship with CBS, those benefits could be reduced or eliminated in the
future. CBS is not obligated to engage in any future business transactions or
jointly pursue opportunities, except for those expressly provided for in the
Intercompany Agreement. The Restated Certificate contains certain provisions
addressing potential conflicts of interest between the Company and CBS and the
allocation between the Company and CBS of certain transactions that, absent such
allocation, could constitute corporate opportunities of both the Company and
CBS. These provisions effectively create a presumption that such opportunities
need not be made available to the Company absent a clear indication that they
were directed to the Company. See "Certain Provisions of the Certificate of
Incorporation and By-Laws of the Company -- Corporate Opportunity and Conflict
of Interests Policies." The Intercompany Agreement will not restrict CBS from
owning or acquiring businesses similar to or which otherwise compete with the
Company.

The descriptions set forth below are intended to be summaries and, while
material terms of the agreements are set forth herein, the descriptions are
qualified in their entirety by reference to the relevant agreement or form
thereof, copies of which have been filed with the Registration Statement of
which this Prospectus forms a part.

Intercompany Agreement

General Services. The Intercompany Agreement requires CBS to continue to
make available to the Company the range of services provided by CBS prior to the
Offerings and requires the Company to utilize such services in the conduct of
its business. These services include, among others, certain investor relations,
executive, legal, finance, real estate, information management, internal audit,
tax and treasury services. The costs of such services will be allocated
according to established methodologies determined on an annual basis by CBS, in
its sole discretion, after consultation with the Company, and will evidence each
such party's fair and reasonable share of such costs. The allocation of costs
for certain of these services provided in prior years is reflected in the
Company's Combined Financial Statements. The costs for certain other services
have not been allocated to the Company in prior years and are not reflected in
the Company's Combined Financial Statements, but will be so allocated following
the Offerings. The Company believes that the costs for services that were not
allocated to the Company in prior years are not material. The Intercompany
Agreement also provides CBS with unlimited access to the corporate books and
records of the Company.

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<PAGE> 65

Executive Officer Services. The Intercompany Agreement provides that,
after the Offerings, CBS will make available to the Company the services of Mr.
Karmazin, the Company's Chairman, President and Chief Executive Officer, and Mr.
Suleman, the Company's Executive Vice President, Chief Financial Officer,
Treasurer and Secretary, as well as such other executive officers and employees
of CBS as the Company and CBS may from time to time agree. CBS will charge the
Company an allocable portion of the compensation and benefits costs of such
persons, determined in the same manner as set forth under "-- General
Administrative Services." Prior to the Offerings, costs for such services were
allocated on a different basis and, accordingly, the Company's Combined
Financial Statements do not reflect the method by which the Company will
allocate such costs in the future. The Company believes that the costs for
services that were not reflected in the Company's Combined Financial Statements
are not material. These Company officers will be employed by CBS, rather than by
the Company, and will spend a substantial part of their professional time and
effort on behalf of CBS. In many instances, such efforts for CBS will relate to
activities that are unrelated (and in some circumstances may be adverse) to the
interests of the Company. The Company has not established any minimum time
requirements for such officers. In addition, Messrs. Karmazin and Suleman will
continue to participate in CBS stock option and other benefit plans and Mr.
Karmazin is one of CBS's largest stockholders. The Company's other executive
officers and a significant number of its employees will continue to hold shares
of and/or options to purchase shares of common stock of CBS granted or acquired
prior to their transfer to the Company, and will not yet have received
comparable interests under the Company's plans. These substantial interests in
CBS's equity may present these officers and employees with incentives different
from those of the Company's stockholders, and may exacerbate the conflicts
described herein.

Mr. Karmazin is a Director of Westwood One and Mr. Suleman is the Chief
Financial Officer and Secretary and a Director of Westwood One, which positions
will continue to impose demands on their time and present potential conflicts of
interest following the Offerings. Westwood One produces and distributes
syndicated and network radio programming to competitors of the Company. See
"Business -- Programming."

Free Promotional Time; Joint Marketing and Corporate Opportunities. The
Intercompany Agreement requires each party to make available at favorable rates
or without charge advertising time and space for promotional purposes in a
manner substantially consistent with past practice. In general, the Company and
CBS have provided each other with promotional time and space without charge in
circumstances where the party providing the time or space concludes that doing
so would not significantly impact its potential revenues. CBS has received, and
is likely to continue to receive, more time under this arrangement than the
Company. Certain of the Company's radio stations also receive certain CBS
television programming in exchange for running promotional spots for CBS during
those broadcasts. While it is not possible to quantify the amounts involved in
these arrangements, they have not had a material impact on the Company's results
of operations, and they are not expected to be material in the future.

The Intercompany Agreement also provides that the parties will use their
best efforts in appropriate situations to cooperate in jointly marketing their
products and services to potential advertisers and to refer advertisers to each
other. Relevant costs and revenues are to be split in a manner which, when
considered in light of their overall relationship, is intended to be fair to
both parties, as determined by CBS, in its sole discretion, after consultation
with the Company. The Intercompany Agreement expressly permits the parties to
compete with each other in selling advertising time and space and in making
acquisitions of media properties.

The Company does not anticipate that providing discounted or free
promotional time to CBS or participating in joint marketing opportunities with
CBS will constitute or affect a material portion of its net revenues.

Lease Arrangements. Certain of the Company's facilities are located in
premises owned or leased by CBS or entities in which CBS has an interest.
Further, certain facilities of CBS are located in premises owned or leased by
the Company. The Intercompany Agreement provides for the apportionment of costs
related to the use of such facilities.

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<PAGE> 66

Employee Matters. The Intercompany Agreement sets forth the understanding
between the parties with respect to current and former employees of CBS and the
Company, including claims arising out of or relating to any employee benefit or
compensation plan, agreement, arrangement or program, as well as collective
bargaining agreements, if any, accrued wages and workers' compensation, holiday,
vacation and sick day benefits. It is expected that following the Offerings, the
Company will assume and be solely responsible for all liabilities and
obligations with respect to current officers and employees of the business owned
and operated by the Company and former officers and employees of such businesses
who, immediately prior to the termination of their employment, were employed in
such businesses.

Trademarks. The Intercompany Agreement provides that the Company will be
entitled to use: (i) on a non-exclusive basis, the "CBS" trademark and the CBS
"eye" trademark logo with respect to day-to-day operations of the CBS Radio
networks in connection with the CBS Radio Network tradename; and (ii) certain
other CBS marks in connection with the Company's radio stations. Uses of the
marks will be subject to CBS's prior written approval. CBS may terminate the
Company's use of the marks in certain circumstances including: (i) a breach by
the Company of a material term or condition of the Intercompany Agreement; and
(ii) at any time CBS ceases to own at least 50% of the voting power of the
Company.

CBS Credit Agreement. The Company does not currently have any independent
credit facilities with banks or other institutions. Prior to the Offerings, the
Company expects to become a borrower under CBS's existing $4.0 billion senior
unsecured revolving credit facility, pursuant to which up to $1.0 billion will
be available to the Company for revolving loans. See "Risk Factors -- Risks
Relating to Control by CBS -- CBS Credit Agreement" and "Description of
Indebtedness -- CBS Credit Agreement."

CBS Note; the Offerings. On September 18, 1998, prior to being transferred
by CBS to the Company, Old Infinity issued the CBS Note as a dividend to CBS, in
the aggregate principal amount of $2.5 billion, bearing interest at the rate per
annum equal to three-month LIBOR plus 0.50%. The dividend was declared and paid
in the form of the CBS Note, in order to provide CBS with funds to be used for
CBS's general corporate purposes. The CBS Note is payable on September 18, 2003.
The Company intends to use the net proceeds of the Offerings to prepay the CBS
Note, and any proceeds in excess thereof will be used for the Company's general
corporate purposes, including working capital, repayment of debt and possible
acquisitions.

Registration Rights. The Intercompany Agreement provides that, upon the
request of CBS or any other rights holder, the Company will use its best efforts
to effect the registration under the applicable federal and state securities
laws of any of the shares of Common Stock (and any other securities issued in
respect of or in exchange therefor) beneficially owned by CBS or any such other
rights holder, as applicable, for sale in accordance with CBS's intended method
of disposition thereof, and will take such other actions as may be necessary to
permit the sale thereof in other jurisdictions, subject to certain limitations
specified in the Intercompany Agreement. CBS and any other rights holder also
will each have the right, subject to certain limitations, to include at any time
and from time to time the shares of Common Stock (and any other securities
issued in respect of or in exchange therefor) beneficially owned by it in
certain other registrations of such securities initiated by the Company on its
own behalf or on behalf of its other stockholders. Subject to the provisions of
the Intercompany Agreement, the Company generally will be required to pay all
out-of-pocket costs and expenses in connection with each such registration that
CBS or any other rights holder requests or in which CBS or any other rights
holder participates. Subject to certain limitations specified in the
Intercompany Agreement, such registration rights will be assignable by CBS or
any other rights holder and their assigns. The Intercompany Agreement contains
customary terms and provisions with respect to, among other things, registration
procedures and certain rights to indemnification and contribution granted by the
parties thereunder in connection with such a registration.

Indemnification. The Intercompany Agreement provides for the assumption of
liabilities and cross-indemnities allocating liability in respect of the
Company's businesses to the Company and in respect of CBS's businesses to CBS.

The Intercompany Agreement provides that any sales or use tax arising from
or imposed upon the transfer of property or services by the Company or CBS
following the completion of the Offerings will be the liability of the party
receiving such property or services. The Intercompany Agreement also provides
that the
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Company will be liable for any payroll tax attributable to 1998 that arises from
the employment by the Company after the completion of the Offerings of
individuals who perform services for the Company during 1998.

In addition, provided that CBS continues to beneficially own at least 80%
of the combined voting power or the value of the outstanding capital stock of
the Company, the Company will be included for purposes of the Employee
Retirement Income Security Act of 1974, as amended, in the controlled group of
which CBS is the common parent. Each member of a controlled group is jointly and
severally liable for pension funding and pension termination liabilities of each
other member of the controlled group, as well as certain benefit plan taxes.
Accordingly, the Company could be liable (subject to indemnification by CBS
under the Intercompany Agreement) for pension funding, pension termination
liabilities and certain other pension-related excise taxes as well as other
taxes of another member of the CBS-controlled group in the event any such
liability is incurred, and not discharged, by such other member. The
Intercompany Agreement will provide, however, that CBS will indemnify the
Company to the extent that, as a result of being a member of the controlled
group of which CBS is the common parent, the Company becomes liable for a
pension funding, pension termination liabilities and any other pension-related
excise or other taxes of another member of the CBS-controlled group (other than
any of the Company's subsidiaries). See "Risk Factors -- Risks Relating to
Control by CBS -- Contingent Liability for CBS Obligations."

As of September 30, 1998, CBS had outstanding an aggregate of approximately
$2.6 billion principal amount of public debt issued pursuant to indentures which
under certain circumstances could effectively require a transferee of assets
from CBS (including the Company) to assume such debt. The Company does not
believe that such assumption is now required or likely to be required in the
future. The Intercompany Agreement provides that CBS will indemnify the Company
in respect of any such debt obligations (including the costs of defending any
assertion of claims against the Company by CBS bondholders). See "Risk
Factors -- Risks Relating to Control by CBS -- Contingent Liability for CBS
Obligations."

Term. The Intercompany Agreement generally will terminate on the date on
which CBS ceases to own 50% or more of the combined voting power of the capital
stock of the Company then outstanding. The Intercompany Agreement will not
provide for termination of the provisions in respect of the registration rights
and indemnification discussed above.

Tax Sharing Agreement and Tax Consolidation

Following the Offerings, the Company and certain of its subsidiaries will
continue to be included in the consolidated group of CBS for U.S. federal income
tax purposes and the combined, consolidated or unitary group of CBS for certain
state and local income tax purposes (the "Consolidated Group"). Prior to the
consummation of the Offerings, the Company and CBS will enter into a tax sharing
agreement (the "Tax Sharing Agreement"). Pursuant to the Tax Sharing Agreement,
the Company and CBS will make payments between them such that, with respect to
income tax returns for any taxable period in which the Company or any of its
subsidiaries is included in the Consolidated Group, the amount of income taxes
to be paid by the Company, subject to certain adjustments, will be determined as
if the Company and each of its subsidiaries included in the Consolidated Group
were to file separate federal, state and local income tax returns (including,
except as provided below, any amounts determined to be due as a result of a
redetermination of the tax liability of the Consolidated Group arising from an
audit or otherwise). With respect to certain tax items, such as foreign tax
credits, alternative minimum tax credits, net operating losses and net capital
losses, the Company will have a right of reimbursement, which will be determined
based on the usage of such credits or losses by the Consolidated Group. The
Company will also pay CBS the amount of any income taxes with respect to income
tax returns that include only the Company, which returns, as described below,
will be filed by CBS. For purposes of the Tax Sharing Agreement, income taxes
include all taxes imposed on or measured in whole or in part by income, capital
or net worth or a taxable base in the nature of income, capital or net worth
(including, in each case, any additions, interest or penalties imposed with
respect thereto).

CBS will continue to have all the rights of a parent of a consolidated
group (and similar rights provided for by applicable state and local law with
respect to a parent of a combined, consolidated or unitary group),

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will be the sole and exclusive agent for the Company in any and all matters
relating to income taxes of the Consolidated Group, will have sole and exclusive
responsibility for the preparation and filing of all income tax returns (or
amended returns) with respect to the Consolidated Group and will have the power,
in its sole discretion, to contest or compromise any asserted tax adjustment or
deficiency and to file, litigate or compromise any claim for refund on behalf of
the Consolidated Group.

CBS will control all tax decisions of the Company, as is presently the
case, by virtue of its controlling beneficial ownership of the Company and the
terms of the Tax Sharing Agreement. Under the Tax Sharing Agreement, CBS will
have sole authority to respond to and conduct all tax proceedings (including tax
audits) relating to the Company, file all income tax returns on behalf of the
Company and determine the amount of the Company's liability to (or entitlement
to payment from) CBS under the Tax Sharing Agreement. This arrangement may
result in conflicts of interest between the Company and CBS. For example, under
the Tax Sharing Agreement, CBS will be able to choose to contest, compromise or
settle any adjustment or deficiency proposed by the relevant taxing authority in
a manner that may be beneficial to CBS and detrimental to the Company.

Provided that CBS continues to beneficially own, directly or indirectly, at
least 80% of the combined voting power and the value of the outstanding capital
stock of the Company, the Company will be included for federal income tax
purposes in the consolidated group of which CBS is the common parent. It is the
present intention of CBS and its subsidiaries to continue to file a single
consolidated federal income tax return. In certain circumstances, certain of the
Company's subsidiaries also will be included with certain subsidiaries of CBS
(other than Company subsidiaries) in combined, consolidated or unitary income
tax groups for state and local tax purposes. Each member of a consolidated group
for federal income tax purposes is liable for the federal income tax liability
of each other member of the Consolidated Group. Similar principles apply with
respect to members of a combined group for state law tax purposes. Accordingly,
although the Tax Sharing Agreement will allocate tax liabilities between the
Company and CBS during the period in which the Company is included in the
Consolidated Group, the Company could be liable for the federal income tax
liability of any other member of the Consolidated Group in the event any such
liability is incurred, and not discharged, by such other member. The Tax Sharing
Agreement will provide, however, that CBS will indemnify the Company to the
extent that, as a result of being a member of the Consolidated Group, the
Company becomes liable for the federal income tax liability of any other member
of the Consolidated Group (other than a subsidiary of the Company).

Under Section 482 of the Internal Revenue Code, the Internal Revenue
Service has the authority in certain instances ("482 Authority") to
redistribute, reapportion or reallocate gross income, deductions, credits or
allowances between or among the Company and CBS (each, along with its
subsidiaries, an "Indemnifiable Group"). Other taxing authorities have similar
authority under comparable provisions of state, local or foreign tax law. The
Tax Sharing Agreement provides that each Indemnifiable Group will indemnify the
other Indemnifiable Group to the extent that, as a result of the Internal
Revenue Service exercising its 482 Authority (or any other taxing authority
exercising a similar authority), the tax liability of one Indemnifiable Group is
reduced while the tax liability of the other Indemnifiable Group is increased.

Historical Relationships Between the Company and CBS

The Company has utilized various services provided by CBS. These services
include, among others, certain investor relations, executive, human resources,
legal, finance, real estate, information management, internal audit, tax and
treasury services. The costs of such services have been allocated according to
established methodologies and are determined on an annual basis by CBS. Such
methodologies used to allocate costs depend on the specific service provided and
include allocating costs that directly relate to the Company or allocating costs
that represent a pro rata portion of the total costs for the services provided.
Management of the Company believes these allocations to be a fair and reasonable
share of such costs. The Company expects that the method of allocating costs in
the future will be consistent with past practices. During 1996, 1997 and the
nine months ended September 30, 1998, such allocated expenses included: legal
services of approximately $1.5 million, $1.9 million and $0.8 million; corporate
rent of approximately $3.4 million, $2.0 million and $1.1 million; management
information services of approximately $4.8 million, $6.8 million and $2.0
million; human resources of approximately $1.5 million, $1.5 million and $0.3
million; and
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insurance of approximately $1.4 million, $1.2 million and $1.1 million,
respectively. In 1995, such allocated expenses included management information
services of $2.4 million, insurance of approximately $1.0 million and all other
services of approximately $4.9 million. During 1995, 1996, 1997 and the nine
months ended September 30, 1998, the Company's allocated expense under certain
pension plans and postretirement benefit arrangements sponsored by CBS was $6.7
million, $7.0 million, $7.0 million and $4.7 million, respectively.

During 1995, 1996, 1997 and the nine months ended September 30, 1998, (i)
CBS paid to the Company approximately $1.4 million, $7.8 million, $6.4 million
and $5.9 million, respectively, in respect of promotional advertising time and
space purchased by CBS from the Company and (ii) the Company paid to CBS
approximately $0.5 million, $0.5 million, $0.6 million and $0.4 million,
respectively, in respect of promotional advertising time and space purchased by
the Company from CBS. See "Relationships between the Company and
CBS -- Intercompany Arrangements."

On September 18, 1998, prior to being transferred by CBS to the Company,
Old Infinity issued the CBS Note as a dividend to CBS, in the aggregate
principal amount of $2.5 billion. The CBS Note is payable on September 18, 2003.
The Company intends to use the net proceeds of the Offerings to prepay the CBS
Note.

WESTWOOD ONE

Pursuant to the Management Agreement, Westwood One has agreed to pay to a
subsidiary of the Company: (i) a management fee in the amount of $2.0 million
per annum, subject to increases in accordance with the consumer price index; and
(ii) a performance bonus based on Westwood One's operating cash flow. Pursuant
to the Representation Agreement, Westwood One has agreed to pay to CBS (and,
following the Offerings, to the Company): (i) a representation rights fee of
$20.0 million over a two-year period; and (ii) a commitment fee of $10.0 million
per annum, subject to certain adjustments. In 1997 and the nine months ended
September 30, 1998, Westwood One paid $17.2 million and $14.2 million,
respectively, pursuant to the Management Agreement and the Representation
Agreement. In addition, Westwood One makes payments to CBS (and, following the
Offerings, to the Company) as compensation for station affiliations and for the
rights to syndicate certain programming. In 1997 and the nine months ended
September 30, 1998, Westwood One paid to CBS approximately $29.5 million and
$22.1 million, respectively, pursuant to such arrangements. Westwood One also
makes payments to CBS in exchange for news programming and technical services
(which payments will continue to be made to CBS, rather than the Company, after
the Offerings). In 1997 and the nine months ended September 30, 1998, Westwood
One paid to CBS approximately $15.0 million and $10.9 million, respectively, for
these services.

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DESCRIPTION OF CAPITAL STOCK

Immediately prior to the closing of the Offerings, the Company will amend
its Certificate of Incorporation to change its authorized capital stock to
2,000,000,000 shares of Class A Common Stock, 2,000,000,000 shares of Class B
Common Stock and 50,000,000 shares of Preferred Stock, and to convert each
outstanding share of its current common stock into 700,000 shares of its newly
created Class B Common Stock. The following summary description of the capital
stock of the Company is qualified in its entirety by reference to the form of
Restated Certificate of Incorporation of the Company (the "Restated
Certificate") and form of Restated By-Laws of the Company (the "By-Laws"), a
copy of each of which is filed as an exhibit to the Registration Statement of
which this Prospectus forms a part.

The Restated Certificate provides for two classes of common stock, Class A
Common Stock and Class B Common Stock, which are substantially identical, except
with respect to voting, conversion and transfer. See "Risk Factors -- Possible
Anti-Takeover Effects of Certain Charter Provisions."

CLASS A COMMON STOCK AND CLASS B COMMON STOCK

Voting Rights

Holders of Class A Common Stock and Class B Common Stock generally have
identical voting rights and vote together as a single class (and not as separate
classes), except that holders of Class A Common Stock are entitled to one vote
per share while holders of Class B Common Stock are entitled to five votes per
share and the shares of Class B Common Stock maintain certain conversion rights
and transfer restrictions as described below. Except as required by law or as
provided below, all matters to be voted on by stockholders must be approved by a
majority (or, in the case of the election of directors, by a plurality) of the
votes entitled to be cast in person or by proxy by all shares of Class A Common
Stock and Class B Common Stock, voting together as a single class, subject to
any voting rights granted to holders of any outstanding Preferred Stock. Holders
of shares of Class A Common Stock and Class B Common Stock are not entitled to
cumulate their votes in the election of directors. Except as otherwise provided
by law or in the Restated Certificate, and subject to any voting rights granted
to holders of any outstanding Preferred Stock, amendments to the Restated
Certificate (including any such amendment to increase or decrease the authorized
shares of any class) must be approved by a majority of the votes entitled to be
cast in person or by proxy by all outstanding shares of Class A Common Stock and
Class B Common Stock, voting together as a single class. However, amendments to
the Restated Certificate that would alter or change the powers, preferences and
relative participating, optional or other special rights of the Class A Common
Stock or Class B Common Stock so as to affect them adversely also must be
approved by a majority of the outstanding shares of such class, voting as a
separate class. The superior voting rights of the holders of the Class B Common
Stock described above may discourage unsolicited tender offers and merger
proposals. See "Certain Provisions of the Certificate of Incorporation and
By-Laws of the Company."

Dividends and Other Distributions

Holders of Class A Common Stock and Class B Common Stock will share equally
on a per share basis in any dividends or other distributions declared by the
Board of Directors, subject to the rights of the holders of any series of
Preferred Stock and any other provisions of the Restated Certificate. Dividends
consisting of shares of Class A Common Stock and Class B Common Stock may be
paid only as follows: (i) shares of Class A Common Stock may be paid only to
holders of Class A Common Stock, and shares of Class B Common Stock may be paid
only to holders of Class B Common Stock; and (ii) the number of shares so paid
will be equal on a per share basis with respect to each outstanding share of
Class A Common Stock and Class B Common Stock. The Company may not reclassify,
subdivide or combine shares of either class of Common Stock without at the same
time proportionally reclassifying, subdividing or combining shares of the other
class.

In the event of any liquidation, dissolution or winding up of the Company,
the holders of Class A Common Stock and the holders of Class B Common Stock will
be entitled to receive the assets and funds of the Company available for
distribution after payments to creditors and to the holders of any Preferred
Stock of

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the Company that may at the time be outstanding, in proportion to the number of
shares held by them, respectively, without regard to class.

Issuance of Class B Common Stock, Options, Rights or Warrants

Subject to certain provisions regarding dividends and other distributions
described above, the Company will not be entitled to issue additional shares of
Class B Common Stock, or issue options, rights or warrants to subscribe for
additional shares of Class B Common Stock, except that the Company may make a
pro rata offer to all holders of Common Stock of rights to purchase additional
shares of the class of Common Stock already held by them. The Class A Common
Stock and the Class B Common Stock will be treated equally with respect to any
offer by the Company to holders of Common Stock of options, rights or warrants
to subscribe for any other capital stock of the Company.

Merger

In the event of a merger, the holders of Class A Common Stock and the
holders of Class B Common Stock will be entitled to receive the same per share
consideration, if any, except that if such consideration includes voting
securities (or the right to acquire voting securities or securities exchangeable
for or convertible into voting securities), the Company may (but is not required
to) provide for the holders of Class B Common Stock to receive consideration
entitling them to five times the number of votes per share as the consideration
being received by holders of the Class A Common Stock.

Conversion of Class B Common Stock

Each share of Class B Common Stock is convertible while held by CBS or any
of its affiliates at the option of the holder thereof into one share of Class A
Common Stock. Except as provided below, any shares of Class B Common Stock
transferred to a person other than CBS or any of its affiliates shall
automatically convert into shares of Class A Common Stock upon such transfer.

In connection with a Tax-Free Spin-Off (as defined below), shares of Class
B Common Stock will not convert, and thereafter will not be convertible, into
shares of Class A Common Stock (subject to applicable laws). However, the
Intercompany Agreement requires CBS, prior to a Tax-Free Spin-Off, to amend the
Restated Certificate to provide for the automatic conversion of shares of Class
B Common Stock into shares of Class A Common Stock, at a specified time
following the Tax-Free Spin-Off, if CBS determines that such conversion would be
consistent with qualification of the transaction as a Tax-Free Spin-Off.

A "Tax-Free Spin-Off" means the transfer of the Class B Common Stock
beneficially owned by CBS to the stockholders of CBS in a transaction intended
to be tax-free under Section 355 of the Internal Revenue Code (or any successor
provision).

Preemptive Rights

No shares of either class of Common Stock have preemptive rights with
respect to any outstanding or newly issued capital stock of the Company.

Foreign Ownership Restrictions

The Restated Certificate includes the following provisions designed to
ensure that control and management of the Company remains with United States
persons, as required by the Communications Act:

(a) If the Company is a direct licensee of a broadcast station, the Company
will not issue to "Aliens" (which term includes: (i) a person who is a citizen
of a country other than the United States; (ii) any entity organized under the
laws of a government other than the government of the United States or any
state, territory, or possession of the United States; (iii) a government other
than the government of the United States or of any state, territory, or
possession of the United States; and (iv) a representative of, or an individual
or entity controlled by, any of the foregoing), either individually or in the
aggregate, in excess of 20% of the total number of shares of capital stock of
the Company outstanding at any time and will seek not to
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permit the transfer on the books of the Company of any capital stock to any
Alien that would result in the total number of shares of such capital stock held
by Aliens exceeding such 20% limit. If the Company is not a direct licensee of a
broadcast station but directly or indirectly controls such licensee, the
foregoing limit will be 25%. In the event that the FCC amends the foregoing
limits, the amended limits will apply.

(b) If the Company is a direct licensee of a broadcast station, no Alien or
Aliens will be entitled to vote or direct or control the vote of more than 20%
of: (i) the total number of shares of capital stock of the Company outstanding
and entitled to vote at any time and from time to time; or (ii) the total voting
power of all shares of capital stock of the Company outstanding and entitled to
vote at any time and from time to time. If the Company is not a direct licensee
of a broadcast station but directly or indirectly controls such licensee, the
foregoing limit will be 25%. In the event that the FCC amends the foregoing
limits, the amended limits will apply.

(c) Any shares of capital stock of the Company determined by the Board of
Directors to be owned by an Alien or Aliens will always be subject to redemption
by the Company by action of the Board of Directors or any other applicable
provision of law, to the extent necessary in the judgment of the Board of
Directors to comply with the Alien ownership restrictions. The terms, conditions
and procedures of such redemption will be as follows: (i) the redemption price
of the shares to be redeemed will be equal to the fair market value of the
shares to be redeemed, as determined by the Board of Directors in good faith;
(ii) the redemption price of such shares may be paid in cash, securities or any
combination thereof; (iii) if the aggregate redemption price for all of the
Alien-owned shares to be redeemed exceeds $5 million in the aggregate during any
one year period consisting of any 12 consecutive calendar months, then the
Company may elect to pay the balance of any redemption price after the Company
has paid $5 million in any such period in installments not to exceed $5 million
per year in the aggregate, with interest payable semi-annually at a rate equal
to the six-month LIBOR rate for such six-month period from time to time as
determined by the Board of Directors in good faith; (iv) if less than all the
shares held by Aliens are to be redeemed, the shares to be redeemed will be
selected in any manner determined by the Board of Directors to be fair and
equitable; (v) at least 10 days' prior written notice of the redemption, which
notice will specify the date the redemption is to be effective (the "Redemption
Date"), will be given to the holders of record of the shares selected to be
redeemed (unless waived in writing by any such holder), provided that the
Redemption Date may be the date on which written notice will be given to holders
if the cash or securities necessary to effect the redemption will have been
deposited in trust for the benefit of such holders and such cash and securities
are subject to immediate withdrawal by them upon surrender of the stock
certificates for their shares to be redeemed duly endorsed in blank or
accompanied by duly executed proper instruments of transfer; (vi) from and after
the Redemption Date, the shares to be redeemed will cease to be regarded as
outstanding and any and all rights of the holders in respect of the shares to be
redeemed or attaching to such shares of whatever nature (including without
limitation any rights to vote or participate in dividends declared on capital
stock of the same class or series as such shares, excepting only payment of
dividends declared prior to the Redemption Date for which the record date
precedes the Redemption Date) will cease and terminate, and the holders thereof
thereafter will be entitled only to receive the cash or securities payable upon
redemption; and (vii) such other terms and conditions as the Board of Directors
determine.

PREFERRED STOCK

The Board of Directors has the authority, without further action by the
stockholders, to issue authorized and unissued shares of Preferred Stock in one
or more series and to fix the powers, rights, preferences, privileges and
restrictions thereof, any or all of which may be greater than the rights of the
Class A Common Stock or the Class B Common Stock. Depending upon the rights of
such Preferred Stock, the issuance thereof could adversely affect the voting
power of holders of the Class A Common Stock or the Class B Common Stock and
could result in restrictions upon the payment of dividends or other
distributions to the holders of Common Stock and could have the effect of
delaying, deterring or preventing a change in control of the Company. The
Company has no present plans to issue any shares of Preferred Stock.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock will be
.

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CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND
BY-LAWS OF THE COMPANY

CERTAIN AMENDMENTS TO THE CERTIFICATE OF INCORPORATION

The Restated Certificate requires the affirmative vote of the holders of at
least 80% of the combined voting power of all the then outstanding shares of
Common Stock, voting together as a single class, to alter, amend or repeal, or
adopt any provision of the Restated Certificate (whether directly or indirectly
through any merger of the Company with any other entity) which is inconsistent
with, among other things, any provision of the Restated Certificate relating to
the classification of the Board of Directors, the determination of the size of,
and the filling of vacancies on, the Board of Directors, the provision requiring
an 80% stockholder vote to remove directors for cause, the prohibition on the
taking of actions by stockholders by written consent in lieu of a meeting and
the calling of a special meeting of stockholders, advance notice requirements
for raising business or making nominations at stockholder meetings, provisions
permitting the Board of Directors to amend the Company's By-Laws, provisions
with respect to corporate opportunity and conflict of interests, the provision
requiring an 80% vote for stockholders to amend the By-Laws in the absence of
Board approval and the provision requiring such an 80% vote to effect such an
alteration, amendment, repeal or adoption.

POTENTIAL LIMITS ON CHANGE OF CONTROL

Certain provisions of the Restated Certificate and By-Laws may delay, defer
or prevent a tender offer, proxy contest or other takeover attempt involving the
Company. These provisions include: (i) the availability of shares of Preferred
Stock for issuance from time to time at the discretion of the Board of
Directors; (ii) prohibitions against stockholders calling a special meeting of
stockholders or acting by written consent in lieu of a meeting; (iii) the
classification of the Board of Directors into three classes, each of which will
serve for different three-year periods; (iv) a requirement pursuant to Section
141 of the DGCL, that, due to the classification of the Board of Directors,
directors of the Company may only be removed for cause; (v) a requirement that
certain provisions of the Restated Certificate may be amended only with the
approval of the holders of at least 80% of the combined voting power of the
Common Stock then outstanding; (vi) requirements for advance notice for raising
business or making nominations at stockholder meetings; and (vii) the ability of
the Board of Directors to increase the size of the board and to appoint
directors to fill newly created directorships. CBS, as owner of more than 80% of
the combined voting power of all classes of voting stock, could sell or
otherwise dispose of a substantial portion of its holdings and still be able to
block any tender offer, proxy contest or other takeover attempt by any third
party and certain other material transactions and matters.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

As permitted by applicable provisions of the DGCL, the Restated Certificate
contains a provision eliminating, to the fullest extent permitted by the DGCL as
it exists or may in the future be amended, the liability of a director to the
Company and its stockholders for monetary damages for breaches of fiduciary duty
as a director. However, the DGCL does not currently allow such provision to
limit the liability of a director for: (i) any breach of the director's duty of
loyalty to the Company or its stockholders; (ii) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of laws;
(iii) payment of dividends, stock purchases or redemptions that violate the
DGCL; or (iv) any transaction from which the director derived an improper
personal benefit. Such limitation of liability also does not affect the
availability of equitable remedies such as injunctive relief or rescission.

The By-Laws of the Company also provide that, to the fullest extent
permitted by the DGCL as it exists or may in the future be amended, the Company
will indemnify any officer or director, and may indemnify any employee or agent,
who is or was a party to, or is threatened to be made a party to, any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person is or was an officer, director, employee or agent of the Company or is or
was serving at the request of the Company as an officer, director, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses (including attorneys' fees),
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judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding other than by or in the right of the Company, had
no reasonable cause to believe such person's conduct was unlawful. With respect
to indemnification other than by or in the right of the Company, the termination
of any action, suit or proceeding by judgment, order, settlement or conviction,
or upon a plea of nolo contendere or its equivalent, will not, of itself, create
a presumption that the person did not act in good faith and in a manner which
such person reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, that such
person had reasonable cause to believe that such person's conduct was unlawful.
No indemnification will be made in connection with actions by or in the right of
the Company in respect of any claim, issue or matter as to which such person has
been adjudged to be liable for negligence or misconduct in the performance of
such person's duty to the Company unless and only to the extent that the Court
of Chancery or the court in which such action or suit was brought determines
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
deems proper. In addition, to the fullest extent permitted by the DGCL, expenses
(including attorneys' fees), judgments, fines incurred by and amounts paid in
settlement may be advanced by the Company prior to the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on the behalf of
such director, officer, employee or agent to repay such amounts if it shall
ultimately be determined that he or she is not entitled to be indemnified as
authorized in accordance with the DGCL and the By-Laws. The By-Laws also state
that such indemnification is not exclusive of any other rights of the
indemnified party, including rights under any indemnification agreements or
otherwise.

CBS Corporation currently maintains insurance in the aggregate amount of
$85 million on behalf of officers and directors of CBS Corporation and its
subsidiaries (including the Company) against any liability which may be asserted
against any such officer or director, subject to certain customary exclusions.

CORPORATE OPPORTUNITY AND CONFLICT OF INTERESTS POLICIES

In order to address certain potential conflicts of interest between the
Company and CBS, the Restated Certificate contains provisions concerning the
conduct of certain affairs of the Company as they may involve CBS and its
subsidiaries (other than the Company and its subsidiaries) and their respective
officers and directors, and the powers, rights, duties and liabilities of the
Company and its subsidiaries and their respective officers, directors and
stockholders in connection therewith. In general, these provisions recognize
that the Company and CBS and their respective subsidiaries may engage in the
same or similar business activities and lines of business and have an interest
in the same areas of corporate opportunities and that the Company and CBS and
their subsidiaries will continue to have contractual and business relations with
each other (including service of directors and officers of CBS as directors and
officers of the Company). See "Management -- Directors and Executive Officers of
the Company."

For purposes of these provisions, the terms "Company" and "CBS" include
their subsidiaries and other entities in which they respectively beneficially
own, directly or indirectly, 50% or more of the outstanding voting securities or
interests (except that "CBS" does not include the Company and its subsidiaries
and such other entities), and, in the case of CBS, any person or entity with a
controlling interest in CBS and all successors to CBS by way of merger,
consolidation, sale or other transfer of all or substantially all its assets.

The Restated Certificate provides that any person purchasing or otherwise
acquiring any interest in any shares of capital stock of the Company shall be
deemed to have notice of and to have consented to these provisions.

Corporate Opportunity Policy. The Restated Certificate provides that,
except as CBS may otherwise agree in writing, CBS will have the right to: (i)
engage in the same or similar business activities or lines of business as the
Company; (ii) do business with any potential or actual customer or supplier of
the Company; or (iii) employ or otherwise engage any officer, director or
employee of the Company. Neither CBS nor any

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officer, employee or director thereof will be liable to the Company or its
stockholders for breach of any fiduciary duty by reason of these activities.

If CBS acquires knowledge of a potential transaction or matter that may be
a corporate opportunity for both CBS and the Company, CBS will have no duty to
communicate that opportunity to the Company. Furthermore, CBS will not be liable
to the Company or its stockholders because CBS pursues or acquires that
corporate opportunity for itself, directs that corporate opportunity to another
person or entity or does not present that corporate opportunity to the Company.

If a director or officer of the Company who is also a director, officer or
employee of CBS acquires knowledge of a potential transaction or matter that may
be a corporate opportunity for both the Company and CBS, the Restated
Certificate requires that the director or officer of the Company act in good
faith in accordance with the following three-part policy:

First, a corporate opportunity offered to any person who is a director but
not an officer or employee of the Company and who is also an officer or employee
(whether or not a director) of CBS will belong to CBS, unless the opportunity is
expressly offered to that person primarily in his or her capacity as a director
of the Company, in which case the opportunity will belong to the Company.

Second, a corporate opportunity offered to any person who is an officer or
employee (whether or not a director) of the Company and who is also a director
but not an officer or employee of CBS will belong to the Company, unless the
opportunity is expressly offered to that person primarily in his or her capacity
as a director of CBS, in which case the opportunity will belong to CBS.

Third, a corporate opportunity offered to any other person who is either an
officer or employee of both the Company and CBS or a director of both the
Company and CBS will belong to CBS or to the Company, as the case may be, if the
opportunity is expressly offered to the person primarily in his or her capacity
as an officer, director or employee of CBS or of the Company, respectively.
Otherwise, the opportunity will belong to CBS.

For purposes of these corporate opportunity provisions, a director of the
Company who is chairman of the Board of Directors of the Company (or a committee
thereof) or chief executive officer of the Company will not be deemed to be an
officer of the Company by reason of holding such position, unless such person is
a full-time employee of the Company.

Under the Restated Certificate, any corporate opportunity that belongs to
CBS or to the Company pursuant to the foregoing policy will not be pursued by
the other (or directed by the other to another person or entity) unless and
until CBS or the Company, as the case may be, determines not to pursue the
opportunity. If the party to whom the corporate opportunity belongs does not,
however, within a reasonable period of time, begin to pursue, or thereafter
continue to pursue, such opportunity diligently and in good faith, the other
party may pursue such opportunity (or direct it to another person or entity).

A director or officer of the Company who acts in accordance with the
foregoing three-part policy: (i) will be deemed fully to have satisfied his or
her fiduciary duties to the Company and its stockholders with respect to such
corporate opportunity; (ii) will not be liable to the Company or its
stockholders for any breach of fiduciary duty by reason of the fact that CBS
pursues or acquires such opportunity for itself or directs such corporate
opportunity to another person or does not communicate information regarding such
opportunity to the Company; (iii) will be deemed to have acted in good faith and
in a manner he or she reasonably believes to be in the best interests of the
Company; and (iv) will be deemed not to have breached his or her duty of loyalty
to the Company or its stockholders and not to have derived an improper benefit
therefrom.

Under the Restated Certificate, "corporate opportunities" potentially
allocable to the Company consist solely of business opportunities which: (i) the
Company is financially able to undertake; (ii) are, from their nature, in the
Company's line or lines of business and are of practical advantage to the
Company; and (iii) are ones in which the Company has an interest or reasonable
expectancy. "Corporate opportunities" do not include transactions in which the
Company or CBS is permitted to participate pursuant to any agreement between the
Company and CBS that is in effect as of the time any equity security of the
Company is first held of record by any person other than CBS or subsequently
entered into with the approval of the Disinterested

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Directors (defined as directors of the Company who are not: (i) officers or
employees of either the Company or CBS; or (ii) directors of CBS).

Conflict of Interests Policy. The Restated Certificate provides that no
contract, agreement, arrangement or transaction between the Company and CBS or
any customer or supplier thereof or any entity in which a director of the
Company has a financial interest (a "Related Entity"), or between the Company
and one or more of the directors, officers or employees of the Company, CBS or
any Related Entity, or any amendment, modification or termination thereof, will
be voidable solely because CBS or such customer or supplier, any Related Entity,
or any one or more of the officers or directors of the Company, CBS or any
Related Entity are parties thereto, or solely because any such directors or
officers are present at or participate in the meeting of the Board of Directors
or committee thereof which authorizes the contract, agreement, arrangement,
transaction, amendment, modification or termination (each, a "Transaction") or
solely because their votes are counted for such purpose, if a specified standard
is satisfied. That standard will be satisfied, and CBS, the Related Entity and
the directors and officers of the Company, CBS or the Related Entity, as
applicable, will be deemed to have acted reasonably and in good faith and fully
to have satisfied any duties of loyalty and fiduciary duties to the Company and
its stockholders with respect to such transaction if any of the following four
requirements are met:

(i) the material facts as to the Transaction are disclosed or known to
the Board of Directors or the committee thereof that authorizes the
Transaction, and the Board of Directors or such committee in good faith
approves the Transaction by a majority of the Disinterested Directors on
the Board of Directors or such committee, even if the Disinterested
Directors are less than a quorum;

(ii) the material facts as to the Transaction are disclosed or known
to the stockholders entitled to vote thereon, and the Transaction is
specifically approved by a vote of the holders of a majority of the then
outstanding Common Stock not owned by CBS or such Related Entity, voting
together as a single class;

(iii) the Transaction is effected pursuant to guidelines which are in
good faith approved by a majority of the Disinterested Directors on the
Board of Directors or the applicable committee thereof or by vote of the
holders of a majority of the then outstanding capital stock not owned by
CBS or such Related Entity, voting together as a single class; or

(iv) the Transaction is fair to the Company as of the time it is
approved by the Board of Directors, a committee thereof or the stockholders
of the Company.

The Restated Certificate also provides that any such Transaction
authorized, approved or effected, and each of such guidelines so authorized or
approved, as described in (i), (ii) or (iii) above, shall be deemed to be
entirely fair to the Company and its stockholders; provided that, if such
authorization or approval is not obtained, or such Transaction is not so
effected, no presumption shall arise that such Transaction or guideline is not
fair to the Company and its stockholders. In addition, the Restated Certificate
provides that CBS shall not be liable to the Company or its stockholders for
breach of any fiduciary duty that CBS may have by reason of the fact that CBS
takes any action in connection with any transaction between CBS and the Company.

The conflict of interests and corporate opportunity provisions in the
Restated Certificate will expire on the date that CBS ceases to beneficially own
Common Stock representing at least 20% of the combined voting power of
outstanding shares of Common Stock and no person who is a director or officer of
the Company is also a director or officer of CBS.

DELAWARE STATUTE

The Company is a Delaware corporation subject to Section 203 of the DGCL.
Section 203 provides that, subject to certain exceptions specified therein, a
corporation may not engage in any business combination, including mergers or
consolidations or acquisitions of assets or additional shares of the
corporation, with any "interested stockholder" for a period of three years
following the time that such stockholder became an interested stockholder
unless: (i) prior to such time, the board of directors of the corporation
approved either the business combination or the transaction which resulted in
the stockholder becoming an interested
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stockholder; (ii) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding certain shares); or (iii) at or subsequent to
such time, the business combination is approved by the board of directors of the
corporation and authorized at an annual or special meeting of stockholders, and
not by written consent, by the affirmative vote of at least 66 2/3% of the
outstanding voting stock which is not owned by the interested stockholder.
Except as otherwise specified in Section 203 of the DGCL, an "interested
stockholder" is defined to include: (a) any person that is the owner of 15% or
more of the outstanding voting stock of the corporation or is an affiliate or
associate of the corporation and was the owner of 15% or more of the outstanding
voting stock of the corporation at any time within the three-year period
immediately prior to the relevant date; and (b) the affiliates and associates of
any such person. Under certain circumstances, Section 203 of the DGCL makes it
more difficult for an interested stockholder to effect various business
combinations with a corporation for the above-referenced three-year period,
although the stockholders may elect to exclude a corporation from the
restrictions imposed thereunder. By virtue of its beneficial ownership of the
Class B Common Stock, CBS is in a position to elect to exclude the Company from
the restrictions under Section 203 of the DGCL, although it currently has no
intention to do so.

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DESCRIPTION OF INDEBTEDNESS

Each of the following summaries of certain indebtedness of the Company and
American Radio is subject to and qualified in its entirety by reference to the
detailed provisions of the respective agreements and instruments to which each
summary relates. Copies of such agreements and instruments have been filed as
exhibits to the Registration Statement of which this Prospectus forms a part.
Capitalized terms used below and not defined have the meanings set forth in the
respective agreements.

CBS CREDIT AGREEMENT

Prior to the Offerings, the Company expects to become a borrower under
CBS's existing $4.0 billion revolving credit facility, pursuant to which up to
$1.0 billion will be available to the Company for revolving loans. Revolving
loans bear interest at a rate equal to, at the borrower's option, either: (a)
the Alternate Base Rate, defined to mean the greater of: (i) the Prime Rate; and
(ii) the Federal Funds Effective Rate plus 1/2 of 1%; or (b) the Eurodollar Rate
plus a margin based upon the type of loan and CBS's senior unsecured debt rating
and leverage ratio. The cost of the facility includes commitment fees, which are
based on the unutilized facility and vary with CBS's debt ratings. The CBS
Credit Agreement terminates on August 29, 2001.

CBS unconditionally and irrevocably guarantees the obligations of each
subsidiary borrower under the CBS Credit Agreement.

The CBS Credit Agreement contains restrictive covenants which impose
restrictions on the ability of CBS and its material subsidiaries (including the
Company) to: (i) create liens or other encumbrances on its assets or properties,
grant negative pledges or dispose of a substantial part of its assets; (ii)
engage in merger or acquisition transactions; and (iii) enter into transactions
with affiliates (which term does not include subsidiaries of CBS) other than
upon terms at least as favorable to CBS (or an applicable subsidiary) as it
could obtain on an arm's length basis. In addition, the terms of the CBS Credit
Agreement impose restrictions on the ability of CBS's subsidiaries to incur
debt, which restrictions are subject to certain exceptions, including in respect
of indebtedness of a subsidiary borrower under the CBS Credit Agreement, debt of
a subsidiary at the time it is acquired and other indebtedness not covered by a
specific exception in an aggregate principal amount not to exceed $300 million
at any one time outstanding. In addition to the foregoing, the CBS Credit
Agreement requires CBS to maintain specified financial ratios and meet certain
tests, including a maximum consolidated leverage ratio and a minimum interest
coverage ratio and net worth.

Events of default under the CBS Credit Agreement include: (i) a default by
any borrower in the payment when due of any principal of any loan under the CBS
Credit Agreement; (ii) a default by any borrower in the payment when due of any
interest or other amounts payable under the CBS Credit Agreement for five days
after the due date thereof; (iii) the failure by CBS to comply with certain
negative covenants in the CBS Credit Agreement, subject in certain instances to
grace periods; (iv) subject to certain exceptions, the failure by CBS or any of
its subsidiaries to pay at maturity or upon acceleration any indebtedness in an
aggregate amount in excess of $100 million; (v) an admission by CBS or any of
its material subsidiaries of an inability to pay its debts as such debts become
due; (vi) certain events of bankruptcy, insolvency, reorganization, dissolution
or winding-up with respect to CBS or any of its material subsidiaries; (vii)
certain events with regard to multiemployer plans pursuant to which CBS or
certain of its affiliates incur a liability to such plans which would have a
material adverse effect on CBS; (viii) a change of control of CBS; or (ix)
termination of CBS's guarantee of subsidiary borrowings under the CBS Credit
Agreement.

9% NOTES

On February 1, 1996, American Radio issued and sold $175.0 million
principal amount of 9% Senior Subordinated Notes Due 2006 (the "9% Notes"). The
9% Notes have been registered under the Securities Act and applicable state
securities laws. The 9% Notes bear interest at 9% per annum, payable
semiannually on each February 1 and August 1. American Radio's payment
obligations under the 9% Notes are fully and unconditionally guaranteed (the "9%
Subsidiary Guarantees") on a joint and several basis on a senior subordinated
basis by all of its present and any future Restricted Subsidiaries. The 9% Notes
are unsecured

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obligations of American Radio and the 9% Notes and the 9% Subsidiary Guarantees
are subordinated in right of payment to all existing and future Senior Debt. The
9% Notes will mature on February 1, 2006.

The 9% Notes are redeemable at the option of American Radio, in whole or in
part at any time on or after February 1, 2001, and prior to maturity, at a
redemption price of 104.5% of the principal amount thereof plus accrued and
unpaid interest, if any, to but excluding the redemption date. The redemption
price reduces over three years to a redemption price of 100% of the principal
amount in 2004 and thereafter. Notwithstanding the foregoing, at any time prior
to February 1, 1999, American Radio may redeem up to $58.3 million principal
amount of the 9% Notes from the net proceeds of a public equity offering at a
redemption price equal to 109.0% of the principal amount thereof plus accrued
and unpaid interest, if any, to the redemption date, provided that at least
$116.7 million principal amount of the 9% Notes remain outstanding immediately
after the occurrence of any such redemption. Upon a Change of Control, and
subject to certain conditions, American Radio will be required to make an offer
to repurchase all the outstanding 9% Notes at 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of repurchase.

The indenture pursuant to which the 9% Notes were issued (the "9% Note
Indenture") contains various restrictive covenants that, among other things,
limit: (i) the incurrence of additional debt and the issuance of redeemable
preferred stock by American Radio; (ii) the incurrence of debt and the issuance
of preferred stock by American Radio's Restricted Subsidiaries; (iii) the
incurrence of liens on the assets of American Radio and its Restricted
Subsidiaries; (iv) the sale of assets of American Radio and the Restricted
Subsidiaries and of equity interests in the Restricted Subsidiaries; and (v)
consolidations, mergers and transfers of all or substantially all American
Radio's assets. The 9% Note Indenture prohibits certain restrictions on
distributions from the Restricted Subsidiaries. In addition, the 9% Note
Indenture contains restrictions on the ability of American Radio and the
Restricted Subsidiaries to: (i) pay dividends or make other distributions in
respect of their capital stock, subject to certain exceptions, including the
satisfaction of certain financial requirements; and (ii) enter into transactions
with any of their affiliates (including CBS, the Company and any of their other
subsidiaries) other than transactions on terms that are no less favorable to
American Radio or the applicable Restricted Subsidiary than those that would
have been obtained in a comparable transaction with an unaffiliated person.
There can be no assurance that such restrictions will not limit the ability of
the Company to conduct and expand its business or to take advantage of business
opportunities or transactions that it otherwise could if such restrictions did
not exist. All of these limitations and prohibitions, however, are subject to a
number of important qualifications.

Events of default under the 9% Note Indenture include, among other things:
(i) a default continuing for 30 days in the payment of interest when due; (ii) a
default in the payment of any principal when due; (iii) the failure to comply
with the covenants in the 9% Note Indenture, subject in certain instances to
grace periods; (iv) a failure to pay other indebtedness of American Radio or any
of its Restricted Subsidiaries in excess of $5 million upon final maturity or as
a result of such indebtedness becoming accelerated and such default continues
for a period of 30 days; (v) certain events of bankruptcy, insolvency or
reorganization of American Radio or any of its Restricted Subsidiaries; and (vi)
the failure to pay any final judgment in excess of $5 million.

9 3/4% NOTES

In connection with the acquisition by American Radio of EZ Communications
Inc. ("EZ"), American Radio assumed all obligations of EZ under the indenture
(the "9 3/4% Note Indenture") pursuant to which the $150.0 million principal
amount of 9 3/4% Senior Subordinated Notes Due 2005 (the "9 3/4% Notes") were
issued. The 9 3/4% Notes bear interest at 9 3/4% per annum, payable semiannually
on each June 1 and December 1. American Radio's payment obligations under the
9 3/4% Notes are fully and unconditionally guaranteed (the "9 3/4% Subsidiary
Guarantees") on a joint and several basis on a senior basis by all of its
present and any future Restricted Subsidiaries. The 9 3/4% Notes are general
unsecured obligations of American Radio and the 9 3/4% Notes and the 9 3/4%
Subsidiary Guarantees rank pari passu in right of payment with all Senior Debt.
The 9 3/4% Notes will mature on December 1, 2005.

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The 9 3/4% Notes are redeemable at the option of American Radio, in whole
or in part at any time on or after December 1, 2000, and prior to maturity, at a
redemption price of 104.875% of the principal amount thereof plus accrued and
unpaid interest, if any, to but excluding the redemption date. The redemption
price reduces over three years to a redemption price of 100% of the principal
amount in 2003 and thereafter. Notwithstanding the foregoing, at any time prior
to December 1, 1998, American Radio may redeem up to $50.0 million principal
amount of the 9 3/4% Notes from the net proceeds of a public equity offering at
a redemption price equal to 109.75% of the principal amount thereof plus accrued
and unpaid interest, if any, to the redemption date, provided that at least
$100.0 million principal amount of the 9 3/4% Notes remain outstanding
immediately after the occurrence of any such redemption. Upon a Change of
Control, and subject to certain conditions, American Radio will be required to
make an offer to repurchase all the outstanding 9 3/4% Notes at 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of repurchase.

The 9 3/4% Note Indenture contains various restrictive covenants and events
of default that are substantially similar in all material respects to the terms
of the 9% Note Indenture.

11 3/8% DEBENTURES

On July 15, 1998, American Radio issued $210.6 million principal amount of
11 3/8% Subordinated Exchange Debentures Due 2009 (the "11 3/8% Debentures") in
exchange for American Radio's $210.6 million liquidation preference of 11 3/8%
Series B Cumulative Exchangeable Preferred Stock, par value $.01 per share. The
11 3/8% Debentures bear interest at 11 3/8% per annum, payable semiannually on
each January 15 and July 15. Through and including January 15, 2002, the entire
amount of the interest payment on the 11 3/8% Debentures may be paid in cash or
in additional 11 3/8% Debentures, at the discretion of American Radio. The
11 3/8% Debentures are unsecured obligations of American Radio and are
subordinated in right of payment to all existing and future Senior Debt. The
11 3/8% Debentures will mature on January 15, 2009.

The 11 3/8% Debentures are redeemable at the option of American Radio, in
whole or in part, at any time on or after January 15, 2002, and prior to
maturity, at a redemption price of 105.688% of the principal amount thereof plus
accrued and unpaid interest, if any, to but excluding the redemption date. The
redemption price reduces over four years to a redemption price of 100% of
principal amount in 2007 and thereafter. Notwithstanding the foregoing, at any
time prior to January 15, 2000, American Radio may redeem up to 35% of the
outstanding 11 3/8% Debentures from the net proceeds of a public or Rule 144A
equity offering at a redemption price equal to 111.375% of the principal amount
thereof plus accrued and unpaid interest, if any, to the redemption date,
provided that at least $130.0 million principal amount of the 11 3/8% Debentures
remain outstanding immediately after the occurrence of any such redemption. Upon
a Change of Control and in the event of an Asset Sale, and in each case subject
to certain conditions, American Radio will be required to make an offer to
repurchase all the outstanding 11 3/8% Debentures at 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
repurchase.

The indenture pursuant to which the 11 3/8% Debentures were issued contains
various restrictive covenants and events of default that are substantially
similar in all material respects to the terms of the 9% Note Indenture.

7% DEBENTURES

On September 30, 1998, American Radio issued $78.7 million principal amount
of 7% Convertible Subordinated Debentures Due 2011 (the "7% Debentures") in
exchange for the then outstanding shares of its 7% Convertible Exchangeable
Preferred Stock. The 7% Debentures bear interest at 7% per annum, payable
quarterly on each March 31, June 30, September 30 and December 31. The 7%
Debentures are unsecured obligations of American Radio and are subordinated in
right of payment to all existing and future Senior Indebtedness. The 7%
Debentures will mature on June 30, 2011.

The 7% Debentures are redeemable at the option of American Radio, in whole
or in part, at any time on or after July 15, 1999, and prior to maturity, at a
redemption price of 104.9% of the principal amount thereof plus accrued and
unpaid interest, if any, to but excluding the redemption date. The redemption
price reduces
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over six years to a redemption price of 100% of the principal amount in 2006 and
thereafter. Upon a Change of Control, and subject to certain conditions, each
holder of 7% Debentures will have the right to require American Radio to
purchase all or any portion of such holder's outstanding 7% Debentures at a
price in cash equal to the principal amount thereof plus accrued and unpaid
interest, if any, to the date of repurchase.

Holders of $42.50 principal amount of 7% Debentures will be entitled at any
time to convert such 7% Debentures, in whole or in part, into $44.00 in cash and
one share of Class A Common Stock of American Tower Corporation. As of September
30, 1998, the outstanding balance of the 7% Debentures on this basis was $81.5
million.

The indenture pursuant to which the 7% Debentures were issued (the "7%
Debenture Indenture") contains a restrictive covenant that limits
consolidations, mergers and transfers of all or substantially all American
Radio's assets, subject to certain qualifications. Events of default under the
7% Debenture Indenture include, among other things: (i) a default continuing for
30 days in the payment of interest when due; (ii) a default in the payment of
any principal when due; (iii) the failure to comply with the covenants in the 7%
Debenture Indenture, subject to grace periods; and (iv) certain events of
bankruptcy, insolvency or reorganization of American Radio.

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SHARES ELIGIBLE FOR FUTURE SALE

Upon consummation of the Offerings, the Company will have outstanding
135,000,000 shares of Class A Common Stock (155,250,000 shares if the
Underwriters' over-allotment options are exercised in full). In addition, the
Company will have outstanding 700,000,000 shares of Class B Common Stock, all of
which will be beneficially owned by CBS, which shares are convertible into Class
A Common Stock as described under "Description of Capital Stock." All of the
shares of Class A Common Stock offered hereby will generally be freely tradable
without restrictions or further registration under the Securities Act, except
for any such shares held at any time by an "affiliate" of the Company, as such
term is defined under Rule 144 promulgated under the Securities Act ("Rule
144"), described below. All the outstanding shares of Class B Common Stock held
by CBS will continue to be "restricted securities" as defined in Rule 144 and
may not be resold in the absence of registration under the Securities Act or
pursuant to an exemption from such registration, including, among others, the
exemptions provided by Rule 144. The Company has agreed that it will, upon the
request of CBS or any other rights holder, except for a limited period described
in "Underwriting," use its best efforts to effect the registration under the
applicable federal and state securities laws of any shares of Common Stock held
by CBS or any such other rights holder, as applicable, or any of its affiliates
with such rights to be assignable by CBS or any such other rights holder under
certain circumstances. See "Relationships Between the Company and
CBS -- Intercompany Arrangements -- Intercompany Agreement -- Registration
Rights."

In general, under Rule 144, as currently in effect, a person (or persons
whose shares are required to be aggregated) who has beneficially owned
restricted securities within the meaning of Rule 144 ("Restricted Securities")
for at least one year, and including the holding period of any prior owner other
than an "affiliate," as that term is defined in Rule 144, is entitled to sell,
within any three-month period, a number of shares that does not exceed the
greater of: (i) 1% of the then-outstanding shares of Class A Common Stock; and
(ii) the average weekly trading volume of the Class A Common Stock on the NYSE
during the four calendar weeks preceding the filing of a notice on Form 144 with
respect to such sale with the Commission. Sales under Rule 144 are also subject
to certain other requirements regarding the manner of sale, notice requirements
and the availability of current public information about the Company. Rule
144(k) provides that a person (or persons whose shares are aggregated) who is
not deemed an "affiliate" during the three months preceding a sale and who has
beneficially owned shares for at least two years (including any period of
ownership of preceding non-affiliated holders) is entitled to sell such shares
at any time under Rule 144 without regard to the limitations described above.
Sales of Restricted Securities by affiliates, even after a two-year holding
period, must continue to be made in brokers' transactions, subject to the volume
limitations described above. An "affiliate" of an issuer is a person that,
directly or indirectly through one or more intermediaries, controls or is
controlled by or under common control with such issuer.

The Company, CBS and Mr. Karmazin have agreed, subject to certain
exceptions, not to sell, offer or otherwise dispose of any shares of Common
Stock (other than in the Offerings) or securities convertible into or
exchangeable or exercisable for Common Stock for a period of 180 days from the
date of this Prospectus without the prior written consent of Merrill Lynch,
Pierce, Fenner & Smith Incorporated. See "Underwriting."

The Company intends to file one or more registration statements on Form S-8
pursuant to the Securities Act to register the shares of Class A Common Stock
that will be reserved for issuance under certain of its benefit plans, thus
permitting the resale in the public market, without restrictions or further
registration under the Securities Act, of any shares of Class A Common Stock
issued upon exercise of options that will be granted by the Company under such
benefit plans to non-affiliates. Any such registration statements will become
effective immediately upon filing. As of the date of this Prospectus, no options
to purchase shares of Class A Common Stock have been granted by the Company to
any of its employees under its benefit plans.

Prior to the Offerings, there has been no public market for the Class A
Common Stock. The Company can make no predictions as to the number of shares
that may be sold in the future or the effect, if any, that sales of such shares,
or the availability of such shares for future sale, will have on the market
price of the Class A Common Stock prevailing from time to time. Future sales of
substantial amounts of Class A Common Stock or Class B Common Stock in the
public market, or the perception that such sales could occur, could adversely
affect prevailing market prices for the Class A Common Stock and could impair
the Company's future ability to raise capital through public offerings of equity
securities. See "Risk Factors -- Shares Eligible for Future Sale."

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<PAGE> 83

UNITED STATES TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS

The following is a general discussion of the material United States federal
income and estate tax consequences of the ownership and disposition of the Class
A Common Stock applicable to Non-United States Holders of such Class A Common
Stock. For the purpose of this discussion, a "Non-United States Holder" is any
holder that for United States federal income tax purposes is not a "United
States person" (as defined below). This discussion does not address all aspects
of United States federal income and estate taxation that may be relevant in
light of such Non-United States Holder's particular facts and circumstances
(such as being a U.S. expatriate) and does not address any tax consequences
arising under the laws of any state, local or non-United States taxing
jurisdiction. Furthermore, the following discussion is based on current
provisions of the Internal Revenue Code of 1986, as amended (the "Code") and
administrative and judicial interpretations thereof, all as in effect on the
date hereof, and all of which are subject to change, possibly with retroactive
effect. The Company has not and will not seek a ruling from the Internal Revenue
Service ("IRS") with respect to the United States Federal income and estate tax
consequences described below, and as a result, there can be no assurance that
the IRS will not disagree with or challenge any of the conclusions set forth in
this discussion. For purposes of this discussion, the term "United States
person" means: (i) a citizen or resident of the United States; (ii) a
corporation, partnership, or other entity created or organized in the United
States or under the laws of the United States or of any political subdivision
thereof; (iii) an estate whose income is included in gross income for United
States federal income tax purposes regardless of its source; or (iv) a trust
whose administration is subject to the primary supervision of a United States
court and which has one or more United States persons who have the authority to
control all substantial decisions of the trust.

DIVIDENDS

If the Company pays a dividend, any dividend paid to a Non-United States
Holder of Class A Common Stock generally will be subject to United States
withholding tax either at a rate of 30% of the gross amount of the dividend or
such lower rate as may be specified by an applicable tax treaty. Dividends
received by a Non-United States Holder that are effectively connected with a
United States trade or business conducted by such Non-United States Holder are
exempt from such withholding tax. However, such effectively connected dividends,
net of certain deductions and credits, are taxed at the same graduated rates
applicable to United States persons.

In addition to the graduated tax described above, dividends received by a
corporate Non-United States Holder that are effectively connected with a United
States trade or business of the corporate Non-United States Holder may also be
subject to a branch profits tax at a rate of 30% or such lower rate as may be
specified by an applicable tax treaty.

A Non-United States Holder of Class A Common Stock that is eligible for a
reduced rate of withholding tax pursuant to a tax treaty may obtain a refund of
any excess amounts currently withheld by filing an appropriate claim for refund
with the IRS.

GAIN ON DISPOSITION OF COMMON STOCK

A Non-United States Holder generally will not be subject to United States
federal income tax on any gain realized upon the sale or other disposition of
his Class A Common Stock unless: (i) such gain is effectively connected with a
United States trade or business of the Non-United States Holder (which gain, in
the case of a corporate Non-United States Holder, must also be taken into
account for branch profits tax purposes); (ii) the Non-United States Holder is
an individual who holds such Class A Common Stock as a capital asset (within the
meaning of Section 1221 of the Code) and who is present in the United States for
a period or periods aggregating 183 days or more during the calendar year in
which such sale or disposition occurs and certain other conditions are met; or
(iii) the Company is or has been a "United States real property holding
corporation" for federal income tax purposes at any time within the shorter of
the five-year period preceding such disposition or such holder's holding period.
The Company has determined that it is not and

77
<PAGE> 84

does not believe that it will become a "United States real property holding
corporation" for United States federal income tax purposes.

BACKUP WITHHOLDING AND INFORMATION REPORTING

Generally, the Company must report annually to the IRS the amount of
dividends paid, the name and address of the recipient, and the amount, if any,
of tax withheld. A similar report is sent to the holder. Pursuant to tax
treaties or other agreements, the IRS may make its reports available to tax
authorities in the recipient's country of residence.

Dividends paid to a Non-United States Holder at an address within the
United States may be subject to backup withholding at a rate of 31% if the
Non-United States Holder fails to establish that it is entitled to an exemption
or to provide a correct taxpayer identification number and certain other
information to the payer. Backup withholding will generally not apply to
dividends paid to Non-United States Holders at an address outside the United
States on or prior to December 31, 1999 (unless the payer has knowledge that the
payee is a United States person). Under recently finalized Treasury Regulations
regarding withholding and information reporting (the "Final Regulations"),
payment of dividends to Non-United States Holders at an address outside the
United States after December 31, 1999 may be subject to backup withholding at a
rate of 31% unless such Non-United States Holder satisfies certain certification
requirements.

Under current Treasury Regulations, the payment of the proceeds of the
disposition of Class A Common Stock to or through the United States office of a
broker is subject to information reporting and backup withholding at a rate of
31% unless the holder certifies its non-United States status under penalties of
perjury or otherwise establishes an exemption. Generally, the payment of the
proceeds of the disposition by a Non-United States Holder of Class A Common
Stock outside the United States to or through a foreign office of a broker will
not be subject to backup withholding but will be subject to information
reporting requirements if the broker is: (i) a United States person; (ii) a
"controlled foreign corporation" for United States tax purposes; or (iii) a
foreign person 50% or more of whose gross income for certain periods is from the
conduct of a United States trade or business unless such broker has documentary
evidence in its files of the holder's non-United States status and certain
conditions are met or the holder otherwise establishes an exemption.

In general, the recently promulgated Final Regulations, described above, do
not significantly alter the substantive withholding and information reporting
requirements but would alter the procedures for claiming benefits of an income
tax treaty and change the certification procedures relating to the receipt by
intermediaries of payments on behalf of the beneficial owner of shares of Class
A Common Stock. Non-United States Holders should consult their tax advisors
regarding the effect, if any, of the Final Regulations on an investment in the
Class A Common Stock. The Final Regulations are generally effective for payments
made after December 31, 1999.

Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained, provided that the required information is furnished to the IRS.

ESTATE TAX

An individual Non-United States Holder who owns Class A Common Stock at the
time of his death or had made certain lifetime transfers of an interest in Class
A Common Stock will be required to include the value of such Class A Common
Stock in such holder's gross estate for United States federal estate tax
purposes, unless an applicable estate tax treaty provides otherwise.

THE FOREGOING DISCUSSION IS A SUMMARY OF THE PRINCIPAL FEDERAL INCOME AND
ESTATE TAX CONSEQUENCES OF THE OWNERSHIP, SALE OR OTHER DISPOSITION OF CLASS A
COMMON STOCK BY NON-UNITED STATES HOLDERS. ACCORDINGLY, INVESTORS ARE URGED TO
CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE INCOME TAX CONSEQUENCES OF
THE OWNERSHIP AND DISPOSITION OF CLASS A COMMON STOCK, INCLUDING THE APPLICATION
AND EFFECT OF THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING
JURISDICTION.
78
<PAGE> 85

UNDERWRITING

Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") is
acting as the representative (the "U.S. Representative") of each of the U.S.
Underwriters named below (the "U.S. Underwriters"). Subject to the terms and
conditions set forth in a U.S. purchase agreement (the "U.S. Purchase
Agreement") among the Company and the U.S. Underwriters, and concurrently with
the sale of 20,250,000 shares of Class A Common Stock to the International
Managers (as defined below), the Company has agreed to sell to the U.S.
Underwriters, and each of the U.S. Underwriters severally and not jointly has
agreed to purchase from the Company, the aggregate number of shares of Class A
Common Stock set forth opposite its name below.

<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
----------------- ------------
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................
BT Alex. Brown Incorporated....................................
Goldman, Sachs & Co. ..........................................
Allen & Company Incorporated...................................
Credit Suisse First Boston Corporation.........................
Donaldson, Lufkin & Jenrette Securities Corporation............
Lehman Brothers Inc. ..........................................
Morgan Stanley & Co. Incorporated..............................
NationsBanc Montgomery Securities LLC..........................
Salomon Smith Barney Inc. .....................................
Bear, Stearns & Co. Inc. ......................................
Deutsche Bank Securities Inc. .................................
ING Baring Furman Selz LLC.....................................
Lazard Freres & Co. LLC........................................
PaineWebber Incorporated.......................................
Sanford C. Bernstein & Co., Inc. ..............................
Schroder & Co. Inc. ...........................................
SG Cowen Securities Corporation................................
ABN AMRO Incorporated..........................................
BancBoston Robertson Stephens Inc. ............................
Chase Securities Inc. .........................................
J.P. Morgan Securities Inc. ...................................
Wasserstein Perella Securities, Inc. ..........................
------------
Total............................................. 114,750,000
============
</TABLE>

The Company has also entered into an international purchase agreement (the
"International Purchase Agreement" and, together with the U.S. Purchase
Agreement, the "Purchase Agreements") with certain underwriters outside the
United States and Canada (the "International Managers" and, together with the
U.S. Underwriters, the "Underwriters"), for whom Merrill Lynch International is
acting as the lead manager (the "Lead Manager"). Subject to the terms and
conditions set forth in the International Purchase Agreement, and concurrently
with the sale of 114,750,000 shares of Class A Common Stock to the U.S.
Underwriters pursuant to the U.S. Purchase Agreement, the Company has agreed to
sell to the International Managers, and each of the International Managers
severally and not jointly has agreed to purchase from the Company, an aggregate
of 20,250,000 shares of Class A Common Stock. The initial public offering price
per share of Class A Common Stock and the total underwriting discount per share
of Class A Common Stock are identical under the U.S. Purchase Agreement and the
International Purchase Agreement.

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<PAGE> 86

In the U.S. Purchase Agreement and the International Purchase Agreement,
the several U.S. Underwriters and the several International Managers,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of the Class A Common Stock being sold
pursuant to each such Purchase Agreement if any of the shares of Class A Common
Stock being sold pursuant to each such Purchase Agreement are purchased. Under
certain circumstances under the Purchase Agreements, the commitments of
non-defaulting Underwriters may be increased. The closings with respect to the
sale of shares of Class A Common Stock to be purchased by the U.S. Underwriters
and the International Managers are conditioned upon one another.

The U.S. Representative has advised the Company that the U.S. Underwriters
propose initially to offer the shares of Class A Common Stock to the public at
the initial public offering price set forth on the cover page of this
Prospectus, and to certain dealers at such price less a concession not in excess
of $ per share of Class A Common Stock. The U.S. Underwriters may allow, and
such dealers may reallow, a discount not in excess of $ per share of Class A
Common Stock on sales to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.

The Company has granted an option to the U.S. Underwriters, exercisable for
30 days after the date of this Prospectus, to purchase up to an aggregate of
17,212,500 additional shares of Class A Common Stock at the initial public
offering price set forth on the cover page of this Prospectus, less the
underwriting discount. The U.S. Underwriters may exercise this option solely to
cover over-allotments, if any, made on the sale of the Class A Common Stock
offered hereby. To the extent that the U.S. Underwriters exercise this option,
each U.S. Underwriter will be obligated, subject to certain conditions, to
purchase a number of additional shares of the Class A Common Stock proportionate
to such U.S. Underwriter's initial amount reflected in the foregoing table. The
Company has also granted an option to the International Managers, exercisable
for 30 days after the date of this Prospectus, to purchase up to an aggregate of
3,037,500 additional shares of Class A Common Stock to cover over-allotments, if
any, on terms similar to those granted to the U.S. Underwriters.

At the request of the Company, the Underwriters have reserved for sale, at
the initial public offering price, up to 5% of the aggregate number of shares of
Class A Common Stock offered hereby to be sold to certain directors, officers
and employees of CBS and the Company (including Messrs. Karmazin, Suleman, Mason
and Apfelbaum) and other persons associated with the Company or with any
director, officer or employee of the Company who have expressed an interest in
purchasing such shares. The number of shares of Class A Common Stock available
for sale to the general public will be reduced to the extent such persons
purchase such reserved shares. Any reserved shares which are not orally
confirmed for purchase within one day of the pricing of the Offerings will be
offered by the Underwriters to the general public on the same terms as the other
shares offered by this Prospectus.

The Company, CBS and Mr. Karmazin have agreed, subject to certain
exceptions, with the Underwriters not to directly or indirectly: (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of or otherwise dispose of or transfer any shares of Common Stock
(other than in the Offerings, pursuant to the Company's 1998 Plan, Annual
Incentive Plan and Savings Plans or in connection with any acquisitions to be
made by the Company in the future in consideration for shares of Class A Common
Stock) or securities convertible into or exchangeable or exercisable for Common
Stock, whether now owned or thereafter acquired by the person executing the
agreement or with respect to which the person executing the agreement thereafter
acquires the power of disposition, or file a registration statement under the
Securities Act with respect to the foregoing; or (ii) enter into any swap or
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, without the prior written consent of Merrill Lynch on behalf of the
Underwriters for a period of 180 days after the date of this Prospectus. See
"Shares Eligible for Future Sale."

The U.S. Underwriters and the International Managers have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Pursuant to the Intersyndicate Agreement, the
U.S. Underwriters and the International Managers are permitted to sell shares

80
<PAGE> 87

of Class A Common Stock to each other for purposes of resale at the initial
public offering price, less an amount not greater than the selling concession.
Under the terms of the Intersyndicate Agreement, the U.S. Underwriters and any
dealer to whom they sell shares of Class A Common Stock will not offer to sell
or sell shares of Class A Common Stock to persons who are non-U.S. or
non-Canadian persons or to persons they believe intend to resell to persons who
are non-U.S. or non-Canadian persons, and the International Managers and any
dealer to whom they sell shares of Class A Common Stock will not offer to sell
or sell shares of Class A Common Stock to U.S. persons or to Canadian persons or
to persons they believe intend to resell to U.S. persons or to Canadian persons,
except in the case of transactions pursuant to the Intersyndicate Agreement.

Prior to the Offerings, there has been no public market for the Class A
Common Stock of the Company. The initial public offering price will be
determined through negotiations among the Company and the U.S. Representative
and the Lead Manager. The factors considered in determining the initial public
offering price, in addition to prevailing market conditions, are price-earnings
ratios of publicly traded companies that the U.S. Representative and the Lead
Manager believe to be comparable to the Company, certain financial information
of the Company, the history of, and the prospects for, the Company and the
industry in which it competes, and an assessment of the Company's management,
its past and present operations, the prospects for, and timing of, future
revenues of the Company, the present state of the Company's development, and the
above factors in relation to market values and various valuation measures of
other companies engaged in activities similar to the Company. There can be no
assurance that an active trading market will develop for the Class A Common
Stock or that the Class A Common Stock will trade in the public market
subsequent to the Offerings at or above the initial public offering price.

The Class A Common Stock has been approved for listing on the NYSE under
the symbol "INF," subject to official notice of issuance. In order to meet the
requirements for listing of the Class A Common Stock on that exchange, the U.S.
Underwriters and the International Managers have undertaken to sell lots of 100
or more shares to a minimum of 2,000 beneficial owners.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including certain liabilities under the Securities Act, or to
contribute to payments the U.S. Underwriters and International Managers may be
required to make in respect thereof.

Until the distribution of the Class A Common Stock is completed, rules of
the Commission may limit the ability of the Underwriters and certain selling
group members to bid for and purchase the Class A Common Stock. As an exception
to these rules, the U.S. Representative is permitted to engage in certain
transactions that stabilize the price of the Class A Common Stock. Such
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the Class A Common Stock.

If the Underwriters create a short position in the Class A Common Stock in
connection with the Offerings, i.e., if they sell more shares of the Class A
Common Stock than are set forth on the cover pages of this Prospectus, the U.S.
Representative and the Lead Manager, respectively, may reduce that short
position by purchasing Class A Common Stock in the open market. The U.S.
Representative and the Lead Manager, respectively, may also elect to reduce any
short position by exercising all or part of the over-allotment option described
above.

The U.S. Representative and the Lead Manager, respectively, may also impose
a penalty bid on certain Underwriters and selling group members. This means that
if the U.S. Representative or the Lead Manager purchases shares of the Class A
Common Stock in the open market to reduce the Underwriters' short position or to
stabilize the price of the Class A Common Stock, it may reclaim the amount of
the selling concession from the Underwriters and selling group members who sold
those shares as part of the Offerings.

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of the Class A Common Stock to the extent
that it were to discourage resales of the Class A Common Stock.

81
<PAGE> 88

Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Class A Common Stock. In addition,
neither the Company nor any of the Underwriters makes any representation that
the U.S. Representative or the Lead Manager will engage in such transactions or
that such transactions, once commenced, will not be discontinued without notice.

The U.S. Underwriters and the International Managers have informed the
Company that they do not intend to confirm sales of the shares of the Class A
Common Stock offered hereby to any accounts over which they exercise
discretionary authority.

Certain of the Underwriters or their affiliates from time to time provided
investment banking, financial advisory, general financing and banking services
to the Company, CBS Corporation and their respective affiliates, for which they
have received customary compensation, and may continue to do so in the future.
William H. Gray, III, a director of CBS Corporation, is a director of The Chase
Manhattan Corporation and The Chase Manhattan Bank, which are affiliates of
Chase Securities Inc., one of the U.S. Underwriters.

Certain affiliates of the U.S. Underwriters are lenders to CBS under the
CBS Credit Agreement. In the event that CBS uses amounts paid to it by the
Company in repayment of the CBS Note to repay amounts outstanding under the CBS
Credit Agreement, affiliates of members of the National Association of
Securities Dealers, Inc. ("NASD") participating in the distribution of the Class
A Common Stock in the Offerings may receive an amount greater than 10% of the
net proceeds of the Offerings. In such event, the underwriting arrangements for
the Offerings will be made in compliance with Rule 2710(c)(8) of the Conduct
Rules of the NASD.

LEGAL MATTERS

The validity of the shares of Class A Common Stock offered hereby will be
passed upon for the Company by Cravath, Swaine & Moore, New York, New York.
Certain legal matters will be passed upon for the Underwriters by Skadden, Arps,
Slate, Meagher & Flom LLP, New York, New York.

EXPERTS

The combined financial statements of the Company as of December 31, 1996
and 1997, and for each of the years in the three-year period ended December 31,
1997, included in this Prospectus and elsewhere in the Registration Statement
have been audited by KPMG Peat Marwick LLP, independent certified public
accountants. Such financial statements have been included herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
appearing elsewhere herein, and upon the authority of said firm as experts in
accounting and auditing.

The consolidated financial statements of American Radio as of December 31,
1997 and 1996, and for each of the years in the three-year period ended December
31, 1997, included in this Prospectus and elsewhere in the Registration
Statement have been audited by KPMG Peat Marwick LLP, independent certified
public accountants. Such financial statements have been included herein and in
the Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
appearing elsewhere herein, and upon the authority of said firm as experts in
accounting and auditing.

The consolidated financial statements of Old Infinity (formerly known as
Infinity Broadcasting Corporation) as of December 31, 1995 and 1996, and for
each of the years in the two-year period ended December 31, 1996, included in
this Prospectus and elsewhere in the Registration Statement have been audited by
KPMG Peat Marwick LLP, independent certified public accountants. Such financial
statements have been included herein and in the Registration Statement in
reliance upon the report of KPMG Peat Marwick LLP, appearing elsewhere herein,
and upon the authority of said firm as experts in accounting and auditing.

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<PAGE> 89

AVAILABLE INFORMATION

Upon the effectiveness of a Registration Statement on Form S-1, of which
this Prospectus is a part, the Company will become subject to the information
requirements of the Exchange Act and in accordance therewith will file reports,
proxy statements and other information with the Commission. Such reports, proxy
statements and other information may be inspected without charge at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the Commission's
Regional Offices at Suite 1400, Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661; and 13th Floor, Seven World Trade Center, New York, New
York 10048. Copies of such material may be obtained at prescribed rates from the
Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549.

In addition, CBS is subject to the information requirements of the Exchange
Act and in accordance therewith files reports and other information with the
Commission. Such reports and other information may be inspected and copied at
the locations set forth above.

The Company has filed with the Commission a Registration Statement on Form
S-l under the Securities Act with respect to the Class A Common Stock offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Class A Common Stock offered
hereby, reference is made to the Registration Statement and the exhibits and
schedules filed as a part thereof. Statements contained in this Prospectus as to
the contents of any contract or any other document referred to are not
necessarily complete, and, in each instance, if such contract or document is
filed as an exhibit to the Registration Statement, each such statement is
qualified in all respects by such reference to such exhibit. The Registration
Statement, including exhibits and schedules thereto, may be inspected without
charge at the Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies of all or any part thereof may be obtained
from such office after payment of fees prescribed by the Commission. The public
may obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. Electronic filings made by the Company through the
Commission's Electronic Data Gathering, Analysis and Retrieval System are
publicly available through the Commission's World Wide Web site
(http://www.sec.gov), which contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission, including the Company. Upon listing on the NYSE (for which
application will be made), reports and other information concerning the Company
can also be inspected at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.

83
<PAGE> 90

INDEX TO FINANCIAL STATEMENTS

I INFINITY BROADCASTING CORPORATION (THE COMPANY)

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report................................ F-2
Combined Statements of Earnings for the years ended December
31, 1995, 1996 and 1997 and the nine months ended
September 30, 1997 and 1998 (unaudited)................... F-3
Combined Balance Sheets as of December 31, 1996 and 1997 and
September 30, 1998 (unaudited)............................ F-4
Combined Statements of Changes in Stockholders' Equity for
the years ended December 31, 1995, 1996 and 1997 and the
nine months ended September 30, 1998 (unaudited).......... F-5
Combined Statements of Cash Flows for the years ended
December 31, 1995, 1996 and 1997 and the nine months ended
September 30, 1997 and 1998 (unaudited)................... F-6
Notes to Combined Financial Statements...................... F-7
</TABLE>

II CBS RADIO, INC.
(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)
AND SUBSIDIARIES

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report................................ F-22
Consolidated Balance Sheets as of December 31, 1996 and
1997...................................................... F-23
Consolidated Statements of Operations for the years ended
December 31, 1995, 1996 and 1997.......................... F-25
Consolidated Statements of Stockholders' Equity (Deficiency)
for the years ended December 31, 1995, 1996 and 1997...... F-26
Consolidated Statements of Cash Flows for the years ended
December 31, 1995, 1996 and 1997.......................... F-28
Notes to Consolidated Financial Statements.................. F-29
Condensed Consolidated Balance Sheets as of December 31,
1997 and March 31, 1998................................... F-68
Unaudited Condensed Consolidated Statements of Operations
for the three months ended
March 31, 1997 and 1998................................... F-70
Unaudited Condensed Consolidated Statements of Cash Flows
for the three months ended March 31, 1997 and 1998........ F-71
Notes to Consolidated Unaudited Condensed Financial
Statements................................................ F-72
</TABLE>

III INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES (OLD INFINITY)

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report................................ F-85
Consolidated Balance Sheets as of December 31, 1995 and
1996...................................................... F-86
Consolidated Statements of Earnings for the years ended
December 31, 1995 and 1996................................ F-87
Consolidated Statements of Cash Flows for the years ended
December 31, 1995 and 1996................................ F-88
Consolidated Statements of Changes in Stockholders' Equity
for the years ended December 31, 1995 and 1996............ F-89
Notes to Consolidated Financial Statements.................. F-90
</TABLE>

F-1
<PAGE> 91

When the Reorganization referred to in note 16 has been consummated, we
will be in a position to render the following report.

/s/ KPMG Peat Marwick LLP

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Infinity Broadcasting Corporation

We have audited the accompanying combined balance sheets of Infinity
Broadcasting Corporation as of December 31, 1996 and 1997 and the related
combined statements of earnings, changes in stockholders' equity and cash flows
for each of the years in the three-year period ended December 31, 1997. These
combined financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these combined
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Infinity
Broadcasting Corporation as of December 31, 1996 and 1997, and the results of
its operations and its cash flows for each of the years in the three-year period
ended December 31, 1997, in conformity with generally accepted accounting
principles.

New York, New York
September 15, 1998, except for
note 16 which is as of
November , 1998.

F-2
<PAGE> 92

INFINITY BROADCASTING CORPORATION

COMBINED STATEMENTS OF EARNINGS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------- ------------------------
1995 1996 1997 1997 1998
-------- -------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Total revenues.................. $245,653 $637,883 $1,691,517 $1,220,207 $1,507,011
Less agency commissions......... (29,365) (83,795) (211,426) (151,918) (187,321)
-------- -------- ---------- ---------- ----------
Net revenues.................... 216,288 554,088 1,480,091 1,068,289 1,319,690
-------- -------- ---------- ---------- ----------
Operating expenses excluding
depreciation and
amortization.................. 136,419 343,920 888,405 654,489 767,507
Depreciation and amortization
(notes 6 and 7)............... 17,914 57,528 197,135 149,061 177,249
Corporate expenses.............. 8,736 13,434 22,277 16,881 13,145
-------- -------- ---------- ---------- ----------
Total operating expenses........ 163,069 414,882 1,107,817 820,431 957,901
-------- -------- ---------- ---------- ----------
Operating earnings.............. 53,219 139,206 372,274 247,858 361,789
Interest expense................ -- -- (3,645) (3,519) (22,038)
Other income, net............... 191 309 5,978 570 1,787
-------- -------- ---------- ---------- ----------
Earnings before income taxes.... 53,410 139,515 374,607 244,909 341,538
Income taxes (note 5)........... 25,737 67,949 196,978 128,942 175,958
-------- -------- ---------- ---------- ----------
Net earnings.................... $ 27,673 $ 71,566 $ 177,629 $ 115,967 $ 165,580
======== ======== ========== ========== ==========
Net earnings per common share --
basic and diluted............. $ 0.04 $ 0.10 $ 0.25 $ 0.17 $ 0.24
======== ======== ========== ========== ==========
Weighted average shares
outstanding (in thousands) --
(basic and diluted)(note 2)... 700,000 700,000 700,000 700,000 700,000
======== ======== ========== ========== ==========
</TABLE>

See accompanying Notes to Combined Financial Statements.
F-3
<PAGE> 93

INFINITY BROADCASTING CORPORATION

COMBINED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ SEPTEMBER 30,
1996 1997 1998
---------- ---------- --------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS

Cash and cash equivalents............................. $ 19,882 $ 22,522 $ 74,296
Receivables (net of allowance for doubtful accounts of
$11,417, $15,086 and $27,802, respectively)......... 299,532 334,914 435,644
Prepaid and other current assets...................... 31,541 27,255 60,067
Deferred tax assets (note 5).......................... 16,473 14,334 19,641
Assets held for sale.................................. 70,347 -- --
---------- ---------- -----------
Total current assets.................................. 437,775 399,025 589,648
Property and equipment, net (note 6).................. 124,615 118,471 236,972
Intangible assets, net (note 7)....................... 6,588,242 6,433,283 9,397,290
Other assets.......................................... 111,320 123,324 182,401
---------- ---------- -----------
Total assets.......................................... $7,261,952 $7,074,103 $10,406,311
========== ========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued expenses (note 8)........ $ 131,815 $ 120,356 $ 178,484
Accrued compensation.................................. 26,554 30,904 42,486
Accrued interest...................................... 5,440 27 17,910
Other current liabilities............................. 563 532 670
---------- ---------- -----------
Total current liabilities............................. 164,372 151,819 239,550
Note payable to CBS (note 9).......................... -- -- 2,500,000
Long-term debt (note 9)............................... 149,931 1,560 650,604
Deferred taxes (note 5)............................... 479,987 484,364 1,148,031
Other non-current liabilities......................... 48,961 38,972 37,072
---------- ---------- -----------
Total liabilities..................................... 843,251 676,715 4,575,257
---------- ---------- -----------

Contingent liabilities and other commitments (notes 10
and 11).............................................

Stockholders' equity:
Preferred stock, par value $0.01, 50,000,000 shares
authorized, no shares issued and outstanding........ -- -- --
Class A common stock, par value $0.01, 2,000,000,000
shares authorized, no shares issued and
outstanding......................................... -- -- --
Class B common stock, par value $0.01, 2,000,000,000
shares authorized, no shares issued and
outstanding......................................... -- -- --
Contributed capital in excess of par value............ 6,216,175 6,017,233 5,831,054
Accumulated earnings.................................. 202,526 380,155 --
---------- ---------- -----------
Total stockholders' equity............................ 6,418,701 6,397,388 5,831,054
---------- ---------- -----------
Total liabilities and stockholders' equity............ $7,261,952 $7,074,103 $10,406,311
========== ========== ===========
</TABLE>

See accompanying Notes to Combined Financial Statements.
F-4
<PAGE> 94

INFINITY BROADCASTING CORPORATION

COMBINED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS; SHARES IN MILLIONS)

<TABLE>
<CAPTION>
CLASS A COMMON CLASS B CONTRIBUTED
PREFERRED STOCK STOCK COMMON STOCK CAPITAL TOTAL
---------------- ---------------- --------------- IN EXCESS OF ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT PAR VALUE EARNINGS EQUITY
------ ------- ------ ------- ------ ------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1994....................... -- $ -- -- $ -- -- $ -- $ 408,166 $ 103,287 $ 511,453
Net earnings................. 27,673 27,673
Contribution for CBS Inc.
Radio acquisition (note
3)......................... 1,204,442 1,204,442
Cash from operations returned
to CBS..................... (40,221) (40,221)
Other intercompany activity,
net........................ (43,745) (43,745)
-- ------- -- ------- --- ------ ----------- --------- -----------
Balance at December 31,
1995....................... -- -- -- -- -- -- 1,528,642 130,960 1,659,602
Net earnings................. 71,566 71,566
Contribution for Old Infinity
acquisition (note 3)....... 4,706,794 4,706,794
Contribution for other
acquisition................ 58,165 58,165
Cash from operations returned
to CBS..................... (77,426) (77,426)
-- ------- -- ------- --- ------ ----------- --------- -----------
Balance at December 31,
1996....................... -- -- -- -- -- -- 6,216,175 202,526 6,418,701
Net earnings................. 177,629 177,629
Contribution to prepay
long-term debt (note 9).... 149,931 149,931
Cash from operations returned
to CBS..................... (329,493) (329,493)
Other intercompany activity,
net........................ (19,380) (19,380)
-- ------- -- ------- --- ------ ----------- --------- -----------
Balance at December 31,
1997....................... -- -- -- -- -- -- 6,017,233 380,155 6,397,388
Net earnings (unaudited)..... 165,580 165,580
Contribution for American
Radio acquisition (note 3)
(unaudited)................ 1,400,000 1,400,000
Contribution to repay
American Radio assumed debt
(note 3) (unaudited)....... 566,576 566,576
Contribution to repay
American Radio long-term
debt (note 9)
(unaudited)................ 68,455 68,455
Dividend declared -- CBS
(unaudited)................ (1,954,265) (545,735) (2,500,000)
Cash from operations returned
to CBS (unaudited)......... (266,945) (266,945)
-- ------- -- ------- --- ------ ----------- --------- -----------
Balance at September 30, 1998
(note 16) (unaudited)...... -- $ -- -- $ -- -- $ -- $ 5,831,054 $ -- $ 5,831,054
== ======= == ======= === ====== =========== ========= ===========
</TABLE>

See accompanying Notes to Combined Financial Statements.
F-5
<PAGE> 95

INFINITY BROADCASTING CORPORATION

COMBINED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------- -----------------------
1995 1996 1997 1997 1998
----------- ----------- --------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net cash flows from operating
activities:
Net earnings....................... $ 27,673 $ 71,566 $ 177,629 $ 115,967 $ 165,580
Adjustments to reconcile net
earnings to net cash provided by
operating activities:
Depreciation and amortization...... 17,914 57,528 197,135 149,061 177,249
Deferred taxes..................... 2,073 3,012 13,883 8,459 2,920
(Gain) loss on sales of assets,
net.............................. -- -- (3,584) 416 --
Other noncash items................ -- -- -- -- (4,033)
Changes in assets and liabilities,
net of acquisitions and
dispositions:
Increase in accounts receivable.... (4,015) (10,248) (35,382) (4,009) (12,373)
(Increase) decrease in other
assets........................... 1,500 (3,100) (14,924) (21,332) (4,305)
Increase (decrease) in accounts
payable and accrued expenses..... 2,259 4,611 (11,459) 4,888 (5,820)
Increase (decrease) in accrued
interest......................... -- -- (3,858) (5,423) 11,006
Increase (decrease) in other
liabilities...................... 1,997 (19,426) (9,176) (8,928) (13,807)
----------- ----------- --------- --------- -----------
Net cash provided by operating
activities....................... 49,401 103,943 310,264 239,099 316,417
----------- ----------- --------- --------- -----------
Cash flows from investing
activities:
Proceeds from dispositions......... -- -- 87,475 74,526 56,731
Business acquisitions and
investments...................... (1,204,442) (994,165) (50,341) (45,764) (1,399,999)
Deposit in acquisition trust....... -- -- -- -- (34,635)
Capital expenditures............... (9,368) (6,682) (15,264) (9,818) (19,793)
----------- ----------- --------- --------- -----------
Net cash (used for) provided by
investing activities............. (1,213,810) (1,000,847) 21,870 18,944 (1,397,696)
----------- ----------- --------- --------- -----------
Cash flows from financing
activities:
Receipts from (payments to) CBS,
net.............................. 1,164,221 916,771 (179,563) (101,072) 1,768,084
Repayment of debt.................. -- -- (149,931) (149,931) (635,031)
----------- ----------- --------- --------- -----------
Net cash provided by (used for)
financing activities............. 1,164,221 916,771 (329,494) (251,003) 1,133,053
----------- ----------- --------- --------- -----------
Increase (decrease) in cash and
cash equivalents................. (188) 19,867 2,640 7,040 51,774
Cash and cash equivalents at
beginning of period.............. 203 15 19,882 19,882 22,522
----------- ----------- --------- --------- -----------
Cash and cash equivalents at end of
period........................... $ 15 $ 19,882 $ 22,522 $ 26,922 $ 74,296
=========== =========== ========= ========= ===========
Supplemental disclosures of cash
flow information:
Cash paid during the year for:
Interest........................... $ -- $ -- $ 9,058 $ 8,942 $ 16,714
Income taxes....................... 23,664 64,937 163,720 120,483 173,038
</TABLE>

For information related to non-cash transactions, see note 3 to the combined
financial statements.

See accompanying Notes to Combined Financial Statements.
F-6
<PAGE> 96

INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

(1) BASIS OF PRESENTATION

Infinity Broadcasting Corporation (the "Company") was incorporated in
September 1998. The Company was formed to own and operate CBS Corporation's
("CBS") out-of-home media business consisting of radio and outdoor advertising.
CBS, prior to December 1, 1997, was known as Westinghouse Electric Corporation
("Westinghouse"). Initially, the Company consisted of the Westinghouse radio
stations.

On November 24, 1995, Westinghouse acquired CBS Inc. On December 31, 1996,
Westinghouse acquired Infinity Broadcasting Corporation and subsidiaries which
included TDI Worldwide, Inc. ("TDI") (collectively referred to as "Old
Infinity"). On June 4, 1998, CBS acquired the radio broadcasting operations of
American Radio Systems Corporation, which was subsequently renamed CBS Radio,
Inc. (herein referred to as "American Radio"). The combined financial statements
have been prepared assuming the consideration to effect these acquisitions was
contributed to the Company and has been recorded by the Company as a capital
contribution. Accordingly, these acquisitions have been presented as the
Company's transactions and have been recorded under the purchase method of
accounting. The Company's Combined Statements of Earnings include the operating
results of the radio stations acquired from CBS Inc., Old Infinity and American
Radio from their respective dates of acquisition. See note 3 to the combined
financial statements.

Subsequent to September 30, 1998, CBS will effect a reorganization (the
"Reorganization") by contributing to the Company at book value substantially all
of its assets and subsidiaries comprising the out-of-home media business.
Included in this contribution will be all of CBS's out-of-home media assets,
including those acquired from CBS Inc., Old Infinity (including TDI) and
American Radio. CBS will retain its investment in USA Digital Radio L.P., which
was formed to develop digital technology. During the period covered by these
combined financial statements, these assets were under common control as an
integral part of CBS's overall operations. These combined financial statements
have been prepared from CBS's historical accounting records and present the
operations of the business that will be owned and operated by the Company as if
the Company had been a separate entity for all periods presented. During these
periods CBS provided various services to the Company (see note 14). Furthermore,
acquisitions consummated by CBS have been presented as if they were made by the
Company and the consideration to effect these acquisitions was contributed by
CBS.

The financial information included herein may not necessarily reflect the
combined results of operations, financial position, changes in stockholders'
equity and cash flows of the Company in the future or what they would have been
had it been a separate, stand-alone entity during the periods presented.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Combination

The combined financial statements include the net assets and entities
described in note 1. All material intercompany accounts and transactions have
been eliminated.

Revenue Recognition

Revenues are primarily derived from the sale of radio advertising spots and
are recognized when the spots are broadcast. The Company also receives
advertising revenues on the sale of outdoor advertising space. Revenues from
outdoor advertising space are recognized proportionately over the contract term.

F-7
<PAGE> 97
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

Stock-Based Compensation

The Company measures compensation cost for stock-based awards, including
awards issued by CBS, using the intrinsic value based method of accounting
prescribed by Accounting Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees." The pro forma net earnings and pro forma
earnings per share disclosures using the fair value based method defined in
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation," and other related information are provided in note 13
to the combined financial statements.

Property and Equipment

Property and equipment are recorded at cost and depreciated over their
estimated useful lives. Depreciation is generally computed on the straight-line
method based on useful lives of 27.5 to 40 years for buildings, 20 years for
land improvements, and 3 to 12 years for equipment. Leasehold improvements are
amortized over the shorter of the useful life or the term of the lease.
Expenditures for additions and improvements are capitalized, and costs for
repairs and maintenance are charged to operations as incurred.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and investments in money
market accounts.

Intangible Assets

Intangible assets primarily include goodwill, Federal Communications
Commission ("FCC") licenses, which are limited as to availability and have
historically appreciated in value with the passage of time, and transit
franchise agreements. Goodwill represents the excess of the purchase price of
acquired businesses over the estimated fair value of tangible and identifiable
intangible net assets acquired. FCC licenses and goodwill are amortized using
the straight-line method over 40 years. Transit franchise agreements are
amortized over the anticipated life of the contract. Subsequent to the
acquisition of an intangible or other long-lived asset, the Company evaluates
whether later events and circumstances indicate the remaining estimated useful
life of that asset may warrant revision or that the remaining carrying value of
such asset may not be recoverable. When factors indicate that an intangible or
other long-lived asset should be evaluated for possible impairment, the Company
uses an estimate of the related asset's undiscounted future cash flows over the
remaining life of that asset in measuring recoverability. If such an analysis
indicates that impairment has in fact occurred, the Company writes down the book
value of the intangible or other long-lived asset to its fair value.

Fair Value of Financial Instruments

Most of the Company's financial instruments, including cash, trade
receivables and payables and accruals, are short-term in nature. Accordingly,
the carrying amount of the Company's financial instruments approximates their
fair value. The carrying amount of long-term debt approximates fair value.

F-8
<PAGE> 98
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

Income Taxes

Income taxes are provided using the asset and liability method in
accordance with SFAS No. 109, "Accounting for Income Taxes." Deferred tax assets
and liabilities are recognized based on differences between book and tax bases
of assets and liabilities using presently enacted tax rates. The provision for
income taxes is the sum of the amount of income tax paid or payable for the year
as determined by applying the provisions of enacted tax laws to taxable income
for that year and the net changes during the year in the Company's deferred tax
assets and liabilities other than changes arising from acquisitions and
dispositions.

The Company provides for income taxes at the end of each interim period
based on the estimated effective tax rate for the full fiscal year. Cumulative
adjustments to the tax provision are recorded in the interim period in which a
change in the estimated annual effective rate is determined.

During the periods presented, the Company was part of the CBS consolidated
tax return. The Company has provided for income taxes as if it were a
stand-alone tax payer in accordance with SFAS 109.

The Company intends to enter into a tax sharing agreement with CBS (see
note 14). Current taxes payable have been paid immediately through contributed
capital. In the future, the Company will reimburse CBS based upon the terms of
the Tax Sharing Agreement.

Earnings Per Share

The historical earnings per share have been presented assuming that 700
million shares of Class B Common Stock were outstanding for the entire period.

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, the
disclosure of contingent assets and liabilities at the date of the combined
financial statements, and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. On an
ongoing basis, management reviews its estimates, including those related to
intangible assets, program rights, contracts, allowances for doubtful accounts,
income taxes and litigation based on currently available information. Changes in
facts and circumstances may result in revised estimates.

New Pronouncements

In June 1997, SFAS No. 130, "Reporting Comprehensive Income," and SFAS No.
131, "Disclosure About Segments of an Enterprise and Related Information," were
issued. SFAS 130 requires that an enterprise report by major component and as a
single total the change in its net assets from non-owner sources during the
period. SFAS 131 establishes annual and interim reporting standards for an
enterprise's operating segments and related disclosures about its products,
services, geographic areas, and major customers. Both statements are effective
for fiscal years beginning after December 15, 1997 and were adopted during 1998.
Adoption of these statements did not impact the Company's combined financial
position, results of operations, or cash flows.

At December 31, 1997, the Company adopted SFAS No. 128, "Earnings per
Share," which establishes standards for computing and disclosing basic and
diluted earnings per common share. Earnings per common share for all periods
presented reflect the provisions of SFAS 128.

F-9
<PAGE> 99
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

In April 1998, Statement of Position (SOP) 98-5 "Reporting on the Costs of
Start-up Activities" was issued. SOP 98-5 provides guidance on the financial
reporting of start-up costs and organization costs. The SOP is effective for
financial statements for fiscal years beginning after December 15, 1998. The
Company does not anticipate that the adoption of this standard will have a
material impact on the Company's combined financial position or results of
operations.

(3) ACQUISITIONS

On November 25, 1995, the Company acquired the radio operations of CBS Inc.
for cash contributed by CBS of approximately $1.2 billion. This acquisition was
accounted for using the purchase method of accounting.

On December 31, 1996, the Company acquired Old Infinity for $4.7 billion
consisting of $3.8 billion of CBS common stock and $.9 billion of debt, which
was repaid immediately prior to the acquisition. The CBS common stock and cash
used to repay the debt were contributed to the Company for purposes of this
acquisition and recorded as contributed capital. In connection with the
acquisition of Old Infinity, the Company was required to divest certain radio
stations to comply with the FCC limitations on the number of broadcasting
properties the Company may own. The assets of the divested stations were
included as assets held for sale as of December 31, 1996, and the divestitures
were completed during the first quarter of 1997.

On June 4, 1998, the Company completed the acquisition of the radio
broadcasting operations of American Radio for approximately $1.4 billion in cash
plus the assumption of debt with a fair value of approximately $1.3 billion. The
Company received a $1.4 billion capital contribution to effect this acquisition.
In conjunction with the acquisition, the Company received an additional capital
contribution of $566.6 million to repay a portion of the debt assumed in the
American Radio acquisition.

F-10
<PAGE> 100
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

The estimated fair values of assets acquired and liabilities assumed (which
for American Radio are based upon preliminary estimates that may be modified at
a later date) are summarized in the following table:

FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
(IN MILLIONS)

<TABLE>
<CAPTION>
OLD INFINITY AT AMERICAN RADIO AT
DECEMBER 31, JUNE 4,
1996 1998
--------------- -----------------
(UNAUDITED)
<S> <C> <C>
Cash................................................... $ -- $ 18
Receivables............................................ 180 88
Investments, principally equity investment in Westwood
One.................................................. 107 --
Assets held for sale................................... 70 --
Property and equipment................................. 39 121
Identifiable intangible assets:
FCC licenses........................................... 996 2,343
Transit franchise agreements........................... 277 --
Goodwill............................................... 3,630 807
Other assets........................................... 31 53
Debt................................................... (149) (1,291)
Deferred income taxes.................................. (328) (656)
Other liabilities...................................... (146) (83)
------ -------
Total purchase price................................... $4,707 $ 1,400
====== =======
</TABLE>

The following unaudited pro forma information reflects the results of
operations of the Company combined with those of the following acquisitions for
(i) the year ended December 31, 1997 and the nine month period ended September
30, 1998 as if the American Radio acquisition occurred on January 1, 1997, and
(ii) the year ended December 31, 1996 as if the acquisition of Old Infinity
occurred on January 1, 1996. The pro forma results give effect to certain
purchase accounting adjustments, including additional depreciation expense
resulting from a step-up in the basis of fixed assets, additional amortization
expense from goodwill and other identifiable intangible assets, increased
interest expense from acquisition debt and related income tax effects.

PRO FORMA RESULTS
(UNAUDITED, IN MILLIONS)

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS
DECEMBER 31, ENDED
---------------- SEPTEMBER 30,
1996 1997 1998
------ ------ -------------
<S> <C> <C> <C>
Net revenues......................................... $1,305 $1,873 $1,487
Net earnings......................................... 82 161 156
Net earnings per common share -- basic and diluted... 0.12 0.23 0.22
</TABLE>

This pro forma financial information is presented for comparative purposes
only and is not necessarily indicative of the operating results that actually
would have occurred had the Old Infinity and American Radio

F-11
<PAGE> 101
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

acquisitions been consummated on January 1, 1996 and 1997, respectively. In
addition, these results are not intended to be a projection of future results
and do not reflect any synergies that might be achieved from combined
operations.

(4) EMPLOYEE BENEFIT PLANS

Certain of the Company's employees are covered by various pension plans
sponsored by CBS. Most pension plan benefits are based on either years of
service and compensation levels at the time of retirement, a formula based on
career earnings or a final average compensation amount. Pension benefits
generally are paid from trusts funded by contributions from employees and/or
CBS. The pension funding policy is consistent with funding requirements of U.S.
federal and other governmental laws and regulations. Certain employees are also
covered by postretirement benefit arrangements sponsored by CBS consisting of
various retiree medical, dental and life insurance arrangements.

The Company has accounted for these plans as a multi-employer plan. The
Company's allocated expense under benefit plans sponsored by CBS was as follows
for the years ended December 31, 1995, 1996 and 1997:

<TABLE>
<CAPTION>
1995 1996 1997
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Pension plan cost........................................ $4,994 $5,393 $5,451
Postretirement benefit plan cost......................... 1,729 1,581 1,524
</TABLE>

SFAS No. 112, "Employers Accounting for Postemployment Benefits," does not
have a significant effect on the Company's combined financial position or
results of operations.

Substantially all of the Company's employees can participate in various
defined contribution savings plans sponsored by the Company or CBS. Such plans
generally allow employees to contribute up to 20% of their income on a pretax
basis. Depending on the particular plan, the Company will match 100% of the
employee's contribution, match 50% of the first 6% of the employees base
earnings, match up to $1,000 or match on a discretionary basis.

(5) INCOME TAXES

Income tax expense included in the combined financial statements is as
follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1995 1996 1997
------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal.............................................. $19,476 $53,444 $150,689
State................................................ 4,188 11,493 32,406
------- ------- --------
Total current income tax expense..................... 23,664 64,937 183,095
------- ------- --------
Deferred:
Federal.............................................. 1,706 2,479 11,426
State................................................ 367 533 2,457
------- ------- --------
Total deferred income tax expense.................... 2,073 3,012 13,883
------- ------- --------
Income tax expense................................... $25,737 $67,949 $196,978
======= ======= ========
</TABLE>

F-12
<PAGE> 102
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

During 1997, the Company utilized net operating loss carryforwards of $19.4
million arising from previous acquisition transactions.

Deferred income taxes result from temporary differences in the financial
bases and tax bases of assets and liabilities. The types of differences that
give rise to deferred income tax assets and liabilities are presented in the
table below:

<TABLE>
<CAPTION>
AT DECEMBER 31,
--------------------
1996 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Provision for expenses and losses........................... $ 15,550 $ 5,717
Operating losses and credit carryforwards................... -- 7,367
Other....................................................... 923 1,250
-------- --------
Total deferred tax asset.................................... 16,473 14,334
Deferred tax liabilities:
Property, plant & equipment................................. 13,009 11,463
Intangibles................................................. 466,978 472,901
-------- --------
Total deferred tax liabilities.............................. 479,987 484,364
-------- --------
Deferred income tax liabilities, net........................ $463,514 $470,030
======== ========
</TABLE>

A reconciliation of the U.S. Federal statutory tax rate on earnings to the
Company's effective tax rate on earnings before income taxes is summarized as
follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1995 1996 1997
----- ----- -----
<S> <C> <C> <C>
Federal income tax statutory rate........................... 35% 35% 35%
Increase in rate resulting from:
Amortization of non-deductible goodwill..................... 7 7 11
State income tax expense, net of federal effect............. 6 6 6
Other....................................................... -- 1 1
-- -- --
Income tax effective rate................................... 48% 49% 53%
== == ==
</TABLE>

The Company intends to enter into a tax sharing agreement with CBS (see
notes 2 and 14).

F-13
<PAGE> 103
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

(6) PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- SEPTEMBER 30,
1996 1997 1998
-------- -------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Land and buildings............................... $ 53,577 $ 70,030 $115,006
Equipment........................................ 101,750 99,142 177,799
Construction in progress......................... 4,593 4,922 15,123
-------- -------- --------
159,920 174,094 307,928
Accumulated depreciation and amortization........ (35,305) (55,623) (70,956)
-------- -------- --------
Property and equipment, net...................... $124,615 $118,471 $236,972
======== ======== ========
</TABLE>

For the years ended December 31, 1995, 1996 and 1997 and for the nine month
periods ended September 30, 1997 and 1998, depreciation expense totaled $4.1
million, $11.7 million, $20.4 million, $14.9 million and $17.9 million,
respectively.

(7) INTANGIBLE ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ SEPTEMBER 30,
1996 1997 1998
---------- ---------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Goodwill...................................... $4,966,766 $4,958,090 $5,776,454
FCC licenses.................................. 1,456,525 1,486,797 3,791,692
Transit franchise agreements.................. 276,700 276,801 276,801
---------- ---------- ----------
6,699,991 6,721,688 9,844,947
Accumulated amortization...................... (111,749) (288,405) (447,657)
---------- ---------- ----------
Intangible assets, net........................ $6,588,242 $6,433,283 $9,397,290
========== ========== ==========
</TABLE>

For the years ended December 31, 1995, 1996 and 1997 and for the nine month
periods ended September 30, 1997 and 1998, amortization expense totaled $13.8
million, $45.8 million, $176.7 million, $134.2 million and $159.3 million,
respectively.

Goodwill, FCC licenses and transit franchise agreements are presented on
the balance sheet net of accumulated amortization. As of December 31, 1996 and
1997 and September 30, 1998, accumulated amortization for goodwill was $99.3
million, $224.7 million and $326.2 million, respectively, accumulated
amortization for FCC licenses was $12.5 million, $49.6 million and $96.7
million, respectively, and accumulated amortization for transit franchise
agreements was $0, $14.1 million and $24.8 million, respectively.

F-14
<PAGE> 104
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

(8) ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- SEPT. 30,
1996 1997 1998
-------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Accounts payable................................... $ 23,765 $ 30,931 $ 46,654
Accrued transit franchise payments................. 14,752 20,630 23,875
Accrued programming losses......................... 29,321 12,028 11,751
Other.............................................. 63,977 56,767 96,204
-------- -------- --------
Total accounts payable and accrued expenses........ $131,815 $120,356 $178,484
======== ======== ========
</TABLE>

(9) LONG-TERM DEBT

On September 18, 1998, Old Infinity declared a dividend to CBS in the
amount of $2.5 billion evidenced by a note due September 18, 2003, which bears
interest at a rate of LIBOR plus 0.50% per annum. The Company plans to issue new
shares of Class A Common Stock, with the net proceeds being used to repay
amounts due to CBS under such note.

Other long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------ SEPT. 30,
1996 1997 1998
-------- ------ ---------
(IN THOUSANDS)
<S> <C> <C> <C>
9% Senior Subordinated Notes......................... $ -- $ -- $168,485
9 3/4% Senior Subordinated Notes..................... -- -- 148,960
11 3/8% Subordinated Exchange Debentures............. -- -- 210,560
7% Convertible Subordinated Debentures............... -- -- 81,453
10 3/8% Notes........................................ 149,931 -- --
Other................................................ 563 2,092 4,110
Unamortized premium, net............................. -- -- 37,706
-------- ------ --------
Total debt........................................... 150,494 2,092 651,274
Less current portion................................. (563) (532) (670)
-------- ------ --------
Long-term debt, net of current portion............... $149,931 $1,560 $650,604
======== ====== ========
</TABLE>

Of the long-term debt shown in the preceding table, at September 30, 1998,
approximately $25 million was held by CBS. The Company may at any time, at its
option, repurchase the debt from CBS at the price paid by CBS plus accrued
interest.

In conjunction with the acquisition of American Radio on June 4, 1998, the
Company assumed approximately $1.3 billion of American Radio debt, of which
$566.6 million borrowed under their revolving credit agreement was repaid
shortly after the acquisition. The Senior Subordinated Notes and the 11 3/8%
Cumulative Exchangeable Preferred Stock (subsequently exchanged into 11 3/8%
Subordinated Exchange Debentures) were recorded at their fair market value as of
the acquisition date, which resulted in a net premium of approximately $41.7
million.

F-15
<PAGE> 105
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

The indentures for each of these obligations include certain covenants
including, among others, limitations on sales of assets, dividend payments,
future indebtedness and issuance of preferred stock, and require an offer to
purchase within 15 days after the occurrence of a Change of Control (as defined)
the outstanding securities at a price of 101% of the principal amount thereof,
plus any accrued and unpaid interest. As a result of the change of control upon
the acquisition of American Radio by CBS, an offer to purchase was made in June
1998. An offer to purchase will also be made in conjunction with the
Reorganization discussed in note 1.

At the time of the acquisition of American Radio, the American Radio 7%
Convertible Exchangeable Preferred Stock remained outstanding. This preferred
stock was converted into 7% Convertible Subordinated Debentures on September 30,
1998 as discussed below. Prior to conversion, quarterly dividends were paid in
arrears on each March 31, June 30 and September 30 at an annual rate of 7%.

Below are summarized the significant provisions of each of the American
Radio debt obligations.

9% Senior Subordinated Notes (the "9% Notes")

During July 1998, $6.5 million of the outstanding principal was redeemed
pursuant to the offer to purchase described above. Interest on these securities
is payable semi-annually on February 1 and August 1 with the face amount of the
9% Notes due on February 1, 2006. The 9% Notes are redeemable at the option of
American Radio, in whole or in part at any time on or after February 1, 2001 at
a redemption price of 104.5% of principal amount, plus any accrued and unpaid
interest. The redemption price reduces over three years to a redemption price of
100% of the principal amount beginning February 1, 2004.

9 3/4% Senior Subordinated Notes (the "9 3/4% Notes")

During July 1998, $1.0 million of the then outstanding principal was
redeemed pursuant to the offer to purchase described above. Interest on these
securities is payable semi-annually on June 1 and December 1 with the face
amount of the 9 3/4% Notes due on December 1, 2005. The 9 3/4% Notes are
redeemable at the option of American Radio, in whole or in part at any time on
or after December 1, 2000 at a redemption price of 104.875% of the principal
amount, plus any accrued and unpaid interest. The redemption price reduces over
three years to a redemption price of 100% of the principal amount in 2003 and
thereafter.

11 3/8% Subordinated Exchange Debentures

As of July 15, 1998 the 11 3/8% Cumulative Exchangeable Preferred Stock was
converted into 11 3/8% Subordinated Exchange Debentures (the "11 3/8
Debentures") with the then outstanding principal amount of $210.6 million (face
amount) due January 15, 2009. Interest on these securities is payable
semi-annually on January 15 and July 15, with the principal amount due on
January 15, 2009.

The 11 3/8% Debentures are redeemable at the option of American Radio, for
cash at any time on or after January 15, 2002, initially at 105.688% of the
outstanding principal, declining ratably to par immediately after January 15,
2007, plus any accrued and unpaid interest.

7% Convertible Subordinated Debentures

On September 30, 1998 the outstanding shares of 7% Convertible Exchangeable
Preferred Stock were converted into 7% Convertible Subordinated Debentures due
June 30, 2011 (the "7% Debentures").Interest on these securities is payable
quarterly on each March 31, June 30, September 30 and December 31. The 7%
Debentures are unsecured obligations of the Company and are subordinated in
right of payment to all existing

F-16
<PAGE> 106
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

and future senior indebtedness. Prior to the American Radio acquisition, these
securities were convertible at the option of the holder at any time into
American Radio common stock. Subsequent to the American Radio acquisition, these
securities are convertible at the option of the holder into merger consideration
consisting of cash and shares of Tower common stock. During the third quarter of
1998, 58,823 shares (equivalent to $58.8 million principal amount of debentures)
were so redeemed at a cost of $60.9 million.

The 7% Debentures are redeemable, in whole or in part, at the option of
American Radio, for cash at any time on or after July 15, 1999, initially at
104.7% of the outstanding principal, declining ratably to par in 2006, plus any
accrued and unpaid interest. American Radio is required to offer to purchase the
7% Debentures within 15 days after the occurrence of a Change of Control (as
defined) for cash at par, plus any accrued and unpaid interest. An offer to
purchase will be made in conjunction with the Reorganization discussed in note
1.

Other

In March 1997, the Company redeemed for $149.9 million the 10 3/8% Notes,
which were issued by Old Infinity prior to its acquisition by the Company.

The Company has $0.5 million of long-term debt maturing during 1998. There
are no significant scheduled long-term debt repayments from January 1, 1999 to
December 31, 2002.

(10) LEGAL MATTERS

(11) CONTINGENT LIABILITIES AND OTHER COMMITMENTS

Leases

The Company has commitments under operating leases for certain facilities
and equipment. Rental expense for the years ended December 31, 1995, 1996, and
1997 was $2.7 million, $7.7 million, and $17.5 million, respectively. These
amounts include immaterial amounts for contingent rentals and sublease income.

Additionally, the Company's outdoor advertising business has franchise
rights entitling it to display advertising on such media as buses, taxis,
trains, bus shelters, terminals, billboards, and phone kiosks. Under most of
these franchise agreements, the franchiser is entitled to receive the greater of
a percentage of the relevant advertising revenues, net of advertising agency
fees, or a specified guaranteed minimum annual payment. Franchise payments
totaled $192.0 million in 1997.

F-17
<PAGE> 107
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

At December 31, 1997, aggregate minimum rental payments due during the next
five years and thereafter are as follows:

MINIMUM RENTAL PAYMENTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
GUARANTEED
MINIMUM
OPERATING FRANCHISE
DECEMBER 31, LEASES PAYMENTS
- ------------ --------- ----------
<S> <C> <C>
1998...................................................... $ 19,599 $152,927
1999...................................................... 16,798 156,719
2000...................................................... 14,965 126,201
2001...................................................... 13,098 86,521
2002...................................................... 13,092 40,702
Thereafter................................................ 40,495 4,377
-------- --------
Minimum rental payments................................... $118,047 $567,447
======== ========
</TABLE>

Other Commitments

The Company routinely enters into commitments to purchase the rights to
broadcast sporting events. Expenses for broadcast rights totaled $4.7 million,
$8.1 million and $34.0 million for the years ended December 31, 1995, 1996 and
1997, respectively. These contracts permit the broadcast of such properties for
various periods. At December 31, 1997, the Company was committed to make
payments under such broadcasting contracts, along with commitments for talent
contracts, of $249.2 million. At December 31, 1997, aggregate payments related
to these commitments during the next five years and thereafter are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
- ------------ (IN THOUSANDS)
<S> <C>
1998...................................................... $ 85,709
1999...................................................... 78,888
2000...................................................... 54,761
2001...................................................... 20,970
2002...................................................... 7,425
Thereafter................................................ 1,425
--------
Total other commitments........................... $249,178
========
</TABLE>

(12) STOCKHOLDERS' EQUITY

F-18
<PAGE> 108
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

(13) STOCK BASED COMPENSATION PLANS

Certain employees of the Company participate in CBS's stock based
compensation plans. The stock option information in the following tables
reflects options to acquire CBS common stock held by employees of the Company.
These stock options will not be converted into the Company's common stock or
options to acquire the Company's common stock.

STOCK OPTION INFORMATION

<TABLE>
<CAPTION>
1995 1996 1997
-------------------- ----------------------- -----------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1............. 351,614 $14.43 770,114 $15.10 23,723,498 $ 6.04
Options granted.................. 418,500 15.67 898,450 19.36 2,623,653 18.56
Options exercised................ -- -- (46,350) 12.70 (846,829) 6.32
Options forfeited................ -- -- (21,250) 18.80 (43,882) 18.57
Awards assumed................... -- -- 22,122,534 5.21 -- --
------- ------ ---------- ------ ---------- ------
Balance at December 31........... 770,114 $15.10 23,723,498 $ 6.04 25,456,440 $ 7.30
======= ====== ========== ====== ========== ======
Exercisable at December 31....... 351,614 $14.43 17,327,276 $ 3.98 19,426,144 $ 4.96
======= ====== ========== ====== ========== ======
</TABLE>

<TABLE>
<CAPTION>
1995 1996 1997
----------------------- ----------------------- -----------------------
WEIGHTED- WEIGHTED- WEIGHTED- WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
FAIR EXERCISE FAIR EXERCISE FAIR EXERCISE
VALUE PRICE VALUE PRICE VALUE PRICE
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Options granted................... $6.23 $15.67 $8.03 $19.36 $7.79 $18.56
----- ------ ----- ------ ----- ------
</TABLE>

STOCK OPTIONS OUTSTANDING AT DECEMBER 31, 1997

<TABLE>
<CAPTION>
WEIGHTED-
OPTIONS AVERAGE WEIGHTED-
RANGE OUTSTANDING WEIGHTED- REMAINING EXERCISABLE AVERAGE
OF AT AVERAGE CONTRACTUAL AT EXERCISE
EXERCISE DECEMBER 31, EXERCISE LIFE DECEMBER 31, PRICE OF
PRICES 1997 PRICE IN YEARS 1997 EXERCISABLE
-------- ------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
$.0002 - 4.99........................ 11,692,833 $ 0.71 2.0 11,692,833 $ 0.71
5 - 9.99........................ 5,523,029 7.01 6.5 4,167,309 7.03
10 - 14.99........................ 2,380,284 13.79 7.9 961,402 13.75
15 - 19.99........................ 5,842,694 18.02 8.7 2,587,000 17.37
20 - 36.53........................ 17,600 30.67 2.4 17,600 30.67
---------- ----------
Total................................. 25,456,440 19,426,144
========== ==========
</TABLE>

F-19
<PAGE> 109
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

The Company accounts for stock-based compensation plans under Opinion 25.
For stock options granted, the option price is not less than the market value of
shares on the grant date; therefore, no compensation cost has been recognized
for stock options granted. Had compensation cost for these options been
determined under the provisions of SFAS 123, the Company's net earnings and
earnings per common share would have been as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1995 1996 1997
------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Net earnings as reported............................. $27,673 $71,566 $177,629
Pro forma net earnings............................... 26,097 67,205 165,274
Net earnings per common share as reported............ 0.04 0.10 0.25
Pro forma net earnings per common share.............. 0.04 0.10 0.24
</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 in 1995, 1996, and 1997, respectively: risk-free
interest rates of 7.2%, 6.1%, and 6.4%; expected dividend yields of 1.4%, 1.1%,
and 1.0%; expected volatility of 31%, 30%, and 30%; and expected lives of 7.3
years, 7.4 years, and 7.3 years, respectively.

(14) RELATED PARTY TRANSACTIONS

The Company expects to enter into an Intercompany Agreement with CBS. The
Company has utilized various services provided by CBS or its subsidiaries. These
services included, among others, certain investor relations, executive, human
resources, legal, investment, finance, real estate, information management,
internal audit, tax, transportation and treasury. The costs of such services
have been allocated according to established methodologies and are determined on
an annual basis by CBS. Such methodologies depend on the specific service
provided and include allocating costs that directly relate to the Company or
allocating costs that represent a pro rata portion of the total costs for the
services provided. Management of the Company believes these allocations to be a
fair and reasonable share of such costs. For the years ended 1995, 1996, 1997
and for the nine months ended September 30, 1998 allocated expenses in the
approximate amounts of $8.3 million, $12.6 million, $13.4 million, and $5.4
million, respectively, were included in the combined statements of earnings of
the Company. It is anticipated that after completion of the Reorganization (see
note 1), various arrangements will continue and that additional transactions may
be entered into in the ordinary course of business. It is further anticipated
that the method of allocating costs will be consistent with past practices.
Substantially all costs relating to direct intercompany services have been
reflected in the accompanying combined financial statements. In addition, the
Company and CBS plan to enter into a Tax Sharing Agreement that will require the
Company to pay to CBS the current federal income tax effect of its transactions
as if the Company had been a stand-alone taxpayer (see note 5).

The Company and CBS provide broadcast time to each other. The Company
expects to continue this practice. The revenues or costs associated with these
intercompany transactions were not significant in the periods presented.

The Company and CBS have entered into and expect to continue to enter into
joint advertising arrangements. Revenues are distributed to the parties
providing the services based upon the contract terms. The revenues associated
with such sales were not significant in the periods presented.

Through its acquisition of Old Infinity, the Company acquired an equity
interest in Westwood One, Inc. ("Westwood One"). The Company accounts for this
investment under the equity method of accounting. The

F-20
<PAGE> 110
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF SEPTEMBER 30, 1998
AND THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1998 IS
UNAUDITED) -- (CONTINUED)

equity earnings of Westwood One were not significant to the Company. Westwood
One also distributes nationally certain of the Company's network programming. In
connection with these arrangements, the Company receives programming payments.
In addition, certain officers of the Company serve as officers of Westwood One
for which the Company receives a management fee. Revenue and expense
reimbursements from these arrangements recorded by the Company totaled
approximately $62 million in 1997.

(15) QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS)
1996 1997
----------------------------------------- -----------------------------------------
1ST 2ND 3RD 4TH 1ST 2ND 3RD 4TH
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues............ $120,955 $145,116 $135,988 $152,029 $313,034 $378,357 $376,898 $411,802
Operating expenses...... 106,138 103,246 99,964 105,534 271,210 271,006 278,215 287,386
Operating earnings...... 14,817 41,870 36,024 46,495 41,824 107,351 98,683 124,416
Net earnings............ 7,650 21,418 18,449 24,049 18,658 50,655 46,654 61,662
Net earnings per
share.................. 0.01 0.03 0.03 0.03 0.03 0.07 0.06 0.09

<CAPTION>
(IN THOUSANDS)
1998
------------------------------
1ST 2ND 3RD
QUARTER QUARTER QUARTER
-------- -------- --------
<S> <C> <C> <C>
Net revenues............ $329,608 $455,764 $534,318
Operating expenses...... 265,729 314,856 377,316
Operating earnings...... 63,879 140,908 157,002
Net earnings............ 31,442 66,877 67,261
--------
Net earnings per
share.................. 0.04 0.10 0.10
</TABLE>

(16) SUBSEQUENT EVENT
Reorganization (as of , 1998)

On , 1998 the Reorganization discussed in note 1 was effected.

F-21
<PAGE> 111

INDEPENDENT AUDITORS' REPORT

The Board of Directors
CBS Radio, Inc.:

We have audited the accompanying consolidated balance sheets of CBS Radio, Inc.
(formerly known as "American Radio Systems Corporation") and subsidiaries as of
December 31, 1997 and 1996, and the related consolidated statements of
operations, stockholders' equity (deficiency) and cash flows for each of the
years in the three-year period ended December 31, 1997. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of CBS Radio, Inc.
(formerly known as "American Radio Systems Corporation") and subsidiaries as of
December 31, 1997 and 1996, and the results of their operations and their cash
flows for each of the years in the three-year period ended December 31, 1997, in
conformity with generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

Boston, Massachusetts
November 2, 1998

F-22
<PAGE> 112

CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------
1996 1997
-------------- --------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 8,074 $ 12,048
Accounts receivable (less allowance for doubtful accounts
of $4,513 in 1996 and $7,578 in 1997).................. 51,660 87,229
Prepaid expenses and other assets......................... 3,523 4,363
Current portion of investment notes receivable (less
valuation allowance of $6,750 in 1997)................. 2,250
Deferred income taxes..................................... 3,370 6,365
-------- ----------
Total current assets.............................. 66,627 112,255
-------- ----------
PROPERTY AND EQUIPMENT -- NET............................... 70,538 132,571
-------- ----------
OTHER ASSETS:
Restricted cash........................................... 22,141
Investment note receivable-related party (less valuation
allowance of $500 in 1996)............................. 743
Investment notes receivable............................... 69,177 26,112
Intangible assets--net:
Goodwill............................................... 221,665 353,897
FCC licenses........................................... 233,558 1,112,273
Other intangible assets................................ 23,746 30,460
Deposits and other long-term assets....................... 25,637 9,140
Net assets held under exchange agreement.................. 47,495
Net assets of discontinued operations..................... 29,727 153,207
-------- ----------
Total other assets................................ 651,748 1,707,230
-------- ----------
TOTAL....................................................... $788,913 $1,952,056
======== ==========
</TABLE>

See notes to Consolidated Financial Statements.
F-23
<PAGE> 113

CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS--(CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1996 1997
-------------- --------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt...................... $ 444 $ 340
Accounts payable.......................................... 6,026 5,949
Accrued compensation...................................... 2,774 1,704
Accrued expenses.......................................... 15,640 16,216
Accrued interest.......................................... 7,303 13,263
-------- -----------
Total current liabilities......................... 32,187 37,472
-------- -----------
DEFERRED INCOME TAXES....................................... 32,926 195,610
-------- -----------
OTHER LONG-TERM LIABILITIES................................. 1,944 8,921
-------- -----------
LONG-TERM DEBT.............................................. 325,693 833,638
-------- -----------
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED STOCK:
Cumulative Exchangeable Preferred Stock, $0.01 par value;
10,000,000 shares authorized; 2,105,602 shares issued
and outstanding; liquidation preference $100 per
share.................................................. 215,550
-------- -----------
STOCKHOLDERS' EQUITY:
Preferred Stock; $0.01 par value; 10,000,000 shares
authorized: Convertible Exchangeable Preferred Stock;
137,500 shares issued and outstanding (represented by
2,750,000 depositary shares); liquidation preference
$1,000 per share....................................... 1 1
Class A Common Stock; $.01 par value; 100,000,000 shares
authorized; 15,101,022 and 24,708,096 shares issued and
outstanding, respectively.............................. 151 247
Class B Common Stock; $.01 par value; 15,000,000 shares
authorized; 4,658,096 and 3,508,639 shares issued and
outstanding, respectively.............................. 47 35
Class C Common Stock; $.01 par value; 6,000,000 shares
authorized; 1,295,518 shares issued and outstanding.... 13 13
Additional paid-in capital................................ 390,731 671,211
Unearned compensation..................................... (297) (202)
Retained earnings (accumulated deficit)................... 5,955 (9,982)
-------- -----------
Total............................................. 396,601 661,323
Less:
Treasury stock, at cost, 18,449 and 19,019 shares at
December 31, 1996 and December 31, 1997,
respectively........................................... (438) (458)
-------- -----------
Total stockholders' equity........................ 396,163 660,865
-------- -----------
TOTAL....................................................... $788,913 $ 1,952,056
======== ===========
</TABLE>

See notes to Consolidated Financial Statements.
F-24
<PAGE> 114

CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1995 1996 1997
--------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
NET REVENUES................................................ $97,609 $175,192 $357,020
------- -------- --------
OPERATING EXPENSES:
Operating expenses excluding depreciation and
amortization, net local marketing agreement and
corporate general and administrative expenses.......... 66,158 117,881 231,997
Net local marketing agreement expenses.................... 600 8,128 2,314
Depreciation and amortization............................. 12,307 16,820 58,417
Corporate general and administrative...................... 3,908 5,046 8,207
------- -------- --------
Total expenses....................................... 82,973 147,875 300,935
------- -------- --------
OPERATING INCOME............................................ 14,636 27,317 56,085
------- -------- --------
OTHER INCOME (EXPENSE):
Interest expense.......................................... (12,497) (22,287) (56,710)
Interest income and other, net............................ 2,435 5,489 2,114
Gains (losses) on sale of assets and other, net........... 11,544 (123) (5,520)
------- -------- --------
Total other income (expense)......................... 1,482 (16,921) (60,116)
------- -------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES..................................................... 16,118 10,396 (4,031)
INCOME TAX PROVISION........................................ (6,903) (4,781) (56)
------- -------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS.................... 9,215 5,615 (4,087)
LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES...... (110) (480) (4,256)
EXTRAORDINARY LOSSES ON EXTINGUISHMENT OF DEBT, NET OF
INCOME TAX BENEFIT OF $614 AND $1,013 IN 1995 AND 1997,
RESPECTIVELY.............................................. (817) (1,639)
------- -------- --------
NET INCOME (LOSS)........................................... 8,288 5,135 (9,982)
REDEEMABLE COMMON AND PREFERRED STOCK DIVIDENDS............. (815) (4,973) (31,164)
------- -------- --------
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS......... $ 7,473 $ 162 $(41,146)
======= ======== ========
BASIC PER SHARE AMOUNTS:
Continuing operations..................................... $ 0.71 $ 0.03 $ (1.29)
Discontinued operations................................... (0.01) (0.02) (0.16)
Extraordinary items....................................... (0.07) (0.06)
------- -------- --------
Net income (loss)......................................... $ 0.63 $ 0.01 $ (1.51)
======= ======== ========
DILUTED PER SHARE AMOUNTS:
Continuing operations..................................... $ 0.66 $ 0.03 $ (1.29)
Discontinued operations................................... (0.01) (0.02) (0.16)
Extraordinary items....................................... (0.06) (0.06)
------- -------- --------
Net income (loss)......................................... $ 0.59 $ 0.01 $ (1.51)
======= ======== ========
SHARES FOR BASIC............................................ 11,838 19,550 27,290
======= ======== ========
SHARES FOR DILUTED.......................................... 12,585 20,510 27,290
======= ======== ========
</TABLE>

See notes to Consolidated Financial Statements.

F-25
<PAGE> 115

CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

<TABLE>
<CAPTION>
CONVERTIBLE
EXCHANGEABLE SERIES A SERIES B SERIES D
PREFERRED STOCK COMMON STOCK COMMON STOCK COMMON STOCK
-------------------- -------------------- -------------------- --------------------
SHARES SHARES SHARES SHARES
OUTSTANDING AMOUNT OUTSTANDING AMOUNT OUTSTANDING AMOUNT OUTSTANDING AMOUNT
----------- ------ ----------- ------ ----------- ------ ----------- ------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995.......... 3,631 $36 374 $4 317 $ 3
Repayment of note receivable......
Stock options granted below fair
market value.....................
Reclassification of Series A, B
and C redeemable stock...........
Two-for-one stock exchange........ 3,631 36 374 4 317 3
Distributions on redeemable
stock............................
Reversal of dividends payable.....
Conversion to Class A Common
Stock............................ (1,275) (13) (539) (5)
Conversion to Class B Common
Stock............................ (5,637) (56) (95) (1)
Conversion to Class C Common
Stock............................ (298) (3) (748) (8)
Shares allocated to treasury...... (52)
Issuance of Class A Common Stock,
net of issuance costs of
$8,303...........................
Exercise of common stock option
and warrant......................
Conversion of Senior Series C
Common Stock to Class B and Class
C Common Stock...................
Acquisition of treasury stock.....
Amortization of unearned
compensation.....................
Conversion of Class B Common Stock
to Class A Common Stock..........
Retirement of treasury stock......
Net income........................
Reclassification of capital
deficiency account...............
--- -- ------ --- ---- -- ---- ---
BALANCE, DECEMBER 31, 1995........ 0 0 0 0 0 0
Dividends payable.................
Distributions paid................
Issuance of Class A Common Stock,
net of issuance cost of $7,034...
Shareholder conversion in
conjunction with issuance of
Class A Common Stock.............
Issuance of Preferred Stock, net
of issuance cost of $4,725....... 138 $1
Issuance of Class A Common Stock
for Skyline, Bridan Tower, and
Henry Mergers....................
Conversion of Class B Common Stock
to Class A Common Stock..........
Exercise of common stock
options..........................
Amortization of unearned
compensation.....................
Net income........................
--- -- ------ --- ---- -- ---- ---
BALANCE, DECEMBER 31, 1996........ 138 1 0 0 0 0 0 0
Dividends payable.................
Distributions paid................
Issuance of Class A Common
Stock............................
Issuance of Preferred Stock, net
of issuance costs of $7,750......
Conversion of Class B Common Stock
to Class A Common Stock..........
Exercise of common stock
options..........................
Tax benefit of stock options......
Acquisition of treasury stock.....
Amortization of unearned
compensation.....................
Net loss..........................
--- -- ------ --- ---- -- ---- ---
BALANCE, DECEMBER 31, 1997........ 138 $1 0 $ 0 0 $0 0 $ 0
=== == ====== === ==== == ==== ===

CLASS A CLASS B
COMMON STOCK COMMON STOCK
-------------------- --------------------
SHARES SHARES
OUTSTANDING AMOUNT OUTSTANDING AMOUNT
----------- ------ ----------- ------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995..........
Repayment of note receivable......
Stock options granted below fair
market value.....................
Reclassification of Series A, B
and C redeemable stock...........
Two-for-one stock exchange........
Distributions on redeemable
stock............................
Reversal of dividends payable.....
Conversion to Class A Common
Stock............................ 1,813 $ 18
Conversion to Class B Common
Stock............................ 5,731 $ 57
Conversion to Class C Common
Stock............................
Shares allocated to treasury......
Issuance of Class A Common Stock,
net of issuance costs of
$8,303........................... 4,770 47
Exercise of common stock option
and warrant...................... 1
Conversion of Senior Series C
Common Stock to Class B and Class
C Common Stock................... 268 3
Acquisition of treasury stock..... (18)
Amortization of unearned
compensation.....................
Conversion of Class B Common Stock
to Class A Common Stock.......... 61 1 (61) (1)
Retirement of treasury stock......
Net income........................
Reclassification of capital
deficiency account...............
------ ---- ------- ----
BALANCE, DECEMBER 31, 1995........ 6,645 66 5,920 59
Dividends payable.................
Distributions paid................
Issuance of Class A Common Stock,
net of issuance cost of $7,034... 4,501 45
Shareholder conversion in
conjunction with issuance of
Class A Common Stock............. 838 8 (338) (3)
Issuance of Preferred Stock, net
of issuance cost of $4,725.......
Issuance of Class A Common Stock
for Skyline, Bridan Tower, and
Henry Mergers.................... 2,165 22
Conversion of Class B Common Stock
to Class A Common Stock.......... 952 10 (952) (10)
Exercise of common stock
options.......................... 28 1
Amortization of unearned
compensation.....................
Net income........................
------ ---- ------- ----
BALANCE, DECEMBER 31, 1996........ 15,101 151 4,658 47
Dividends payable.................
Distributions paid................
Issuance of Class A Common
Stock............................ 8,362 83
Issuance of Preferred Stock, net
of issuance costs of $7,750......
Conversion of Class B Common Stock
to Class A Common Stock.......... 1,193 12 (1,193) (12)
Exercise of common stock
options.......................... 53 1 44 0
Tax benefit of stock options......
Acquisition of treasury stock..... (1)
Amortization of unearned
compensation.....................
Net loss..........................
------ ---- ------- ----
BALANCE, DECEMBER 31, 1997........ 24,708 $247 3,509 $ 35
====== ==== ======= ====
</TABLE>

See notes to Consolidated Financial Statements.

F-26
<PAGE> 116

CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY) -- (CONTINUED)
<TABLE>
<CAPTION>
CLASS C
COMMON STOCK NOTE
-------------------- RECEIVABLE TREASURY STOCK ADDITIONAL
SHARES FROM --------------- UNEARNED PAID-IN
OUTSTANDING AMOUNT STOCKHOLDER SHARES AMOUNT COMPENSATION CAPITAL
----------- ------ ----------- ------ ------ ------------ ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995............. $(500) (26) $(340) $ 18,357
Repayment of note receivable......... 500
Stock options granted below fair
market value........................ $(473) 473
Reclassification of Series A, B and C
redeemable stock.................... 3,121
Two-for-one stock exchange........... (26) (43)
Distributions on redeemable stock....
Reversal of dividends payable........ 265
Conversion to Class A Common Stock...
Conversion to Class B Common Stock...
Conversion to Class C Common Stock... 1,046 $11
Shares allocated to treasury.........
Issuance of Class A Common Stock, net
of issuance costs of $8,303......... 70,355
Exercise of common stock option and
warrant............................. 79 1 11
Conversion of Senior Series C Common
Stock to Class B and Class C Common
Stock............................... 671 6
Acquisition of treasury stock........ (18) (438) 438
Amortization of unearned
compensation........................ 82
Conversion of Class B Common Stock to
Class A Common Stock................
Retirement of treasury stock......... 52 340 (340)
Net income...........................
Reclassification of capital
deficiency account.................. (21,709)
----- --- ----- --- ----- ----- --------
BALANCE, DECEMBER 31, 1995........... 1,796 18 0 (18) (438) (391) 70,928
Dividends payable....................
Distributions paid...................
Issuance of Class A Common Stock, net
of issuance cost of $7,034.......... 114,457
Shareholder conversion in conjunction
with issuance of Class A Common
Stock............................... (500) (5)
Issuance of Preferred Stock, net of
issuance cost of $4,725............. 132,774
Issuance of Class A Common Stock for
Skyline, Bridan Tower, and Henry
Mergers............................. 72,131
Conversion of Class B Common Stock to
Class A Common Stock................
Exercise of common stock options..... 441
Amortization of unearned
compensation........................ 94
Net income...........................
----- --- ----- --- ----- ----- --------
BALANCE, DECEMBER 31, 1996........... 1,296 13 0 (18) (438) (297) 390,731
Dividends payable.................... (25,210)
Distributions paid...................
Issuance of Class A Common Stock..... 311,213
Issuance of Preferred Stock, net of
issuance costs of $7,750............ (7,750)
Conversion of Class B Common Stock To
Class A Common Stock................
Exercise of common stock options..... 930
Tax benefit of stock options......... 1,297
Acquisition of treasury stock........ (1) (20)
Amortization of unearned
compensation........................ 95
Net loss.............................
----- --- ----- --- ----- ----- --------
BALANCE, DECEMBER 31, 1997........... 1,296 $13 $ 0 (19) $(458) $(202) $671,211
===== === ===== === ===== ===== ========

CAPITAL
DEFICIENCY RETAINED
UPON EARNINGS DIVIDENDS
COMBINATION (DEFICIT) PAYABLE TOTAL
----------- --------- --------- -----
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995............. $ (21,709) $(1,680) $ 265 $ (5,564)
Repayment of note receivable......... 500
Stock options granted below fair
market value........................
Reclassification of Series A, B and C
redeemable stock.................... 3,121
Two-for-one stock exchange...........
Distributions on redeemable stock.... (815) (815)
Reversal of dividends payable........ (265)
Conversion to Class A Common Stock...
Conversion to Class B Common Stock...
Conversion to Class C Common Stock...
Shares allocated to treasury.........
Issuance of Class A Common Stock, net
of issuance costs of $8,303......... 70,402
Exercise of common stock option and
warrant............................. 12
Conversion of Senior Series C Common
Stock to Class B and Class C Common
Stock............................... 9
Acquisition of treasury stock........
Amortization of unearned
compensation........................ 82
Conversion of Class B Common Stock to
Class A Common Stock................
Retirement of treasury stock.........
Net income........................... 8,288 8,288
Reclassification of capital
deficiency account.................. 21,709
--------- ------- -------- --------
BALANCE, DECEMBER 31, 1995........... 0 5,793 0 76,035
Dividends payable.................... (4,973) 4,973
Distributions paid................... (4,973) (4,973)
Issuance of Class A Common Stock, net
of issuance cost of $7,034.......... 114,502
Shareholder conversion in conjunction
with issuance of Class A Common
Stock...............................
Issuance of Preferred Stock, net of
issuance cost of $4,725............. 132,775
Issuance of Class A Common Stock for
Skyline, Bridan Tower, and Henry
Mergers............................. 72,153
Conversion of Class B Common Stock to
Class A Common Stock................
Exercise of common stock options..... 442
Amortization of unearned
compensation........................ 94
Net income........................... 5,135 5,135
--------- ------- -------- --------
BALANCE, DECEMBER 31, 1996........... 0 5,955 0 396,163
Dividends payable.................... (5,955) 15,613 (15,552)
Distributions paid................... (15,613) (15,613)
Issuance of Class A Common Stock..... 311,296
Issuance of Preferred Stock, net of
issuance costs of $7,750............ (7,750)
Conversion of Class B Common Stock To
Class A Common Stock................
Exercise of common stock options..... 931
Tax benefit of stock options......... 1,297
Acquisition of treasury stock........ (20)
Amortization of unearned
compensation........................ 95
Net loss............................. (9,982) (9,982)
--------- ------- -------- --------
BALANCE, DECEMBER 31, 1997........... $ 0 $(9,982) $ 0 $660,865
========= ======= ======== ========
</TABLE>

See notes to Consolidated Financial Statements.

F-27
<PAGE> 117

CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1995 1996 1997
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (loss) from continuing operations.................... $ 9,215 $ 5,615 $ (4,087)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO CASH PROVIDED
BY OPERATING ACTIVITIES:
Barter revenues........................................... (4,678) (7,989) (13,137)
Barter expenses........................................... 4,626 6,973 12,054
Depreciation and amortization............................. 12,307 16,820 58,417
Amortization of deferred financing costs.................. 278 868 1,287
Amortization of debt discount............................. 84 100
Amortization of debt premium.............................. (574)
Provision for losses on accounts receivable............... 1,387 2,930 4,484
Provision for loss on investment note receivable.......... 6,750
Deferred taxes............................................ 3,490 831 (5,334)
Accretion of note discount................................ (53) (42)
Recovery of allowance on investment note receivable....... (500)
(Gain) loss on sale of station and other, net............. (11,544) 248 (404)
Loss on broadcasting contract............................. 1,670
Stock compensation........................................ 82 94 95
Change in assets and liabilities, net of effects of
mergers and acquisitions:
Accounts receivable....................................... (5,993) (27,625) (12,277)
Prepaid expenses and other assets......................... (864) (975) (942)
Restricted cash........................................... (703)
Accounts payable and accrued expenses..................... 2,317 8,994 (13,385)
Accrued interest.......................................... (993) 6,789 1,738
--------- --------- ---------
Continuing operations................................... 9,577 13,615 35,252
Discontinued operations................................... 147 2,044 8,056
--------- --------- ---------
Cash provided by operating activities................... 9,724 15,659 43,308
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property, equipment and
intangible assets....................................... (5,926) (15,782) (22,664)
Proceeds from asset and radio station sales............... 15,302 1,087 86,551
Repayment of investment notes receivable.................. 3,000 1,350 1,243
Payments for purchase of radio stations................... (31,013) (312,591) (500,824)
Payments for investment notes receivable and related
intangible assets....................................... (48,597) (56,522) (410)
Deposits and other long-term assets....................... (6,649) (20,303) 7,537
--------- --------- ---------
Continuing operations................................... (73,883) (402,761) (428,567)
Discontinued operations................................... (7,300) (19,124) (216,506)
--------- --------- ---------
Cash used for investing activities...................... (81,183) (421,885) (645,073)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under the Credit Agreements.................... 225,000 151,500 639,500
Repayments under the Credit Agreements.................... (202,500) (151,500) (286,000)
Borrowings under other obligations........................ 750
Repayment of other obligations............................ (1,288) (403) (868)
Net proceeds from debt offering--net of discount.......... 173,581
Net proceeds from stock offerings and options............. 69,882 247,474 193,165
Additions to deferred financing costs..................... (3,896) (5,344) (5,642)
Redemption of Series C Senior Common Stock................ (14,580)
Dividends paid............................................ (4,973) (15,613)
Purchase of treasury stock................................ (438)
--------- --------- ---------
Continuing operations................................... 72,180 410,335 525,292
Discontinued operations................................... 0 2,449 82,669
--------- --------- ---------
Cash provided by financing activities................... 72,180 412,784 607,961
--------- --------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS....................... 721 6,558 6,196
CHANGE IN CASH AND CASH EQUIVALENTS INCLUDED IN DISCONTINUED
OPERATIONS................................................ (12) (2,361) (2,222)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR................ 3,168 3,877 8,074
--------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR...................... $ 3,877 $ 8,074 $ 12,048
========= ========= =========
</TABLE>

See notes to Consolidated Financial Statements.
F-28
<PAGE> 118

CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CBS Radio, Inc. (formerly known as American Radio Systems Corporation)
(collectively, "American," "ARS" or the "Company") is a national broadcasting
company formed in 1993 to acquire, develop and operate radio stations and
communications towers throughout the United States. As of December 31, 1997 the
Company owned and/or operated approximately 100 radio stations in 21 markets and
owned and/or operated approximately 760 wireless communication sites.

On June 4, 1998 the merger of ARS and a subsidiary of CBS Corporation (the
CBS Merger) was consummated. In connection with the merger, all of the shares of
American Tower Systems Corporation (Tower) owned by ARS were distributed (the
Distribution) to ARS common stockholders and holders of options to acquire ARS
common stock and have been or will be distributed upon conversion of shares of
ARS 7% Convertible Exchangeable Preferred Stock (or the debentures into which
they were exchanged). As a consequence of the Distribution, Tower ceased to be a
subsidiary of, or to be otherwise affiliated with, ARS and now operates as an
independent publicly traded company. Consequently, the results of operations and
net assets of Tower have been classified as Discontinued Operations in
accordance with Accounting Principles Board Opinion No. 30, "Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business and Extraordinary, Unusual, and Infrequently Occurring Events and
Transactions," for all periods presented. Net revenues for discontinued
operations for 1995, 1996 and 1997 totaled $0.2 million, $2.8 million and $17.1
million, respectively. The Distribution was accounted for as a non-reciprocal
(non-cash) transfer to the Company's former shareholders reducing additional
paid in-capital by approximately $150.0 million on the CBS Merger date.

Pursuant to the provisions of the CBS Merger Agreement, Tower entered into
an agreement (the Separation Agreement) with CBS and ARS providing for, among
other things, the orderly separation of ARS and Tower, the allocation of certain
tax liabilities to Tower, certain closing date adjustments relating to ARS, the
lease to ARS by Tower of space on certain towers previously owned by ARS and
transferred to Tower, and certain indemnification obligations (including with
respect to securities law matters) of Tower. As a consequence of the CBS Merger,
the Company or CBS is required to divest certain radio stations in order to
comply with regulatory orders. (See Note 10).

Basis of Presentation and Principles of Consolidation -- The accompanying
consolidated financial statements include the accounts of the Company and its
subsidiaries. All significant intercompany accounts and transactions have been
eliminated. Investments in affiliates, owned more than 20 percent but not in
excess of 50 percent, are accounted for using the equity method, when less than
a controlling interest is held.

Revenue Recognition -- Revenues are recognized when advertisements are
broadcast.

Corporate General and Administrative Expense -- Corporate general and
administrative expense consists of corporate overhead costs not specifically
allocable to any of the Company's individual business properties.

Barter Transactions -- Revenue from the stations' exchange of advertising
time for goods and services is recorded as the advertising is broadcast at the
fair market value of goods or services received or to be received. The value of
the goods and services is charged to expense when used. Net barter receivables
are included in accounts receivable.

F-29
<PAGE> 119
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Barter transactions were approximately as follows for the years ended
December 31 (in thousands):

<TABLE>
<CAPTION>
1995 1996 1997
------ ------ -------
<S> <C> <C> <C>
Barter revenues......................................... $4,678 $7,989 $13,137
Barter expenses......................................... 4,626 6,973 12,054
Net barter receivables.................................. 248 811 1,457
Barter fixed asset additions............................ 131 22 202
Net barter asset (liability) assumed in acquisitions.... (431) 42
</TABLE>

Net Local Marketing Agreement Expense -- Net local marketing agreement
("LMA") expenses consist of fees paid by or earned by American under agreements
which permit an entity to program and market stations prior to their
acquisition. The Company enters into such agreements prior to the consummation
of many of its acquisitions or dispositions. LMA expenses for the years ended
December 31, 1996 and 1997 are presented net of approximately $2,333,000 and
$4,138,000, respectively, of revenue earned under such agreements with third
parties.

Concentration of Credit Risk -- The Company extends credit to customers on
an unsecured basis in the normal course of business. No individual industry or
industry segment is significant to the Company's customer base. The Company has
policies governing the extension of credit and collection of amounts due from
customers.

Derivative Financial Instruments -- The Company uses derivative financial
instruments as a means of managing interest-rate risk associated with current
debt or anticipated debt transactions that have a high probability of being
executed. Derivative financial instruments used include interest rate swap
agreements and interest rate cap agreements. These instruments are matched with
either fixed or variable rate debt and, when matched, are recorded on a
settlement basis as an adjustment to interest expense. Premiums paid to purchase
interest rate cap agreements are amortized as an adjustment of interest expense
over the life of the contract. Derivative financial instruments are not held for
trading purposes. (See Notes 3 and 11.)

Impairment of Long-Lived Assets -- Recoverability of long-lived assets is
determined by periodically comparing the forecasted undiscounted net cash flows
of the operations to which the assets relate to the carrying amount, including
associated intangible assets of such operations. Through December 31, 1997, no
impairments requiring adjustment have occurred.

Stock-Based Compensation -- Compensation related to equity grants or awards
to employees is measured using the intrinsic value method prescribed by
Accounting Principles Board Opinion No. 25 (See Note 8.)

Income (Loss) Per Common Share -- In the fourth quarter of 1997, the
Company adopted Statement of Financial Accounting Standards No. 128, (FAS 128)
"Earnings Per Share." Prior to the fourth quarter of 1997, the Company computed
income (loss) per common share using the methods outlined in Accounting
Principles Board Opinion No. 15, "Earnings Per Share," and its interpretations.

F-30
<PAGE> 120
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
A reconciliation of the denominator for the basic and diluted per share
calculations is as follows:

<TABLE>
<CAPTION>
1995 1996 1997
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Shares for basic computation............................ 11,838 19,550 27,290
Effect of stock options................................. 747 960 --
Assumed conversion of redeemable common and preferred
stock................................................. -- -- --
------ ------ ------
Shares for diluted computation.......................... 12,585 20,510 27,290
====== ====== ======
</TABLE>

Shares of redeemable common and preferred stock convertible into common
stock have been excluded from the diluted computation as they are anti-dilutive.
Had such shares been included, shares for diluted computation would have been
increased by 410,000, 1,662,000 and 3,235,000 in 1995, 1996 and 1997,
respectively. In addition, because such shares are antidilutive, no adjustment
has been made to reconcile from income (loss) for the basic computation to that
for the diluted computation. No effect has been given to stock options in 1997
as they are antidilutive for that year. Had such options been included, shares
for diluted computation would have been increased by 1,388,000.

Property and Equipment and Intangible Assets -- Property and equipment are
recorded at cost, or at estimated fair value in the case of acquired properties.
Cost includes expenditures for radio properties and related assets and the net
amount of interest cost associated with significant capital additions.
Approximately $463,000 of interest was capitalized for the year ended December
31, 1997. Depreciation is provided using the straight-line method over estimated
useful lives ranging from three to fifteen years.

Non-competition and consulting agreements, FCC licenses, goodwill, and
various other intangibles, acquired in connection with the Company's
acquisitions of the various radio stations are being amortized over their
estimated useful lives, ranging from one to forty years, using the straight-line
method. FCC licenses are generally amortized over a twenty-five year period and
goodwill over a forty-year period. Other intangible assets consist principally
of deferred financing costs, broadcast affiliation agreements, favorable studio
and office space leases and costs incurred on pending acquisitions. Accumulated
amortization of goodwill aggregated approximately $6,369,000 and $17,318,000 at
December 31, 1996 and 1997, respectively. Accumulated amortization of FCC
licenses aggregated approximately $7,628,000 and $42,876,000 at December 31,
1996 and 1997, respectively. Accumulated amortization of other intangible assets
aggregated approximately $14,112,000 and $18,698,000 at December 31, 1996 and
1997, respectively.

Property and equipment and intangible assets included approximately $108.6
million and $84.0 million of assets related to radio stations held for sale or
under exchange agreements (excluding the Merger Agreement) as of December 31,
1996 and 1997, respectively. The following summary presents the results of
operations (excluding depreciation and amortization, net local marketing
agreement and corporate general and administrative expenses) relating to these
stations that are included in the accompanying consolidated financial statements
for each respective period.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
------------------
(IN THOUSANDS)
1996 1997
------- -------
<S> <C> <C>
Net operating revenues...................................... $15,795 $22,271
Net operating expenses...................................... 10,663 15,742
</TABLE>

F-31
<PAGE> 121
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Restricted Cash -- Restricted cash represents cash held in escrow pursuant
to certain exchange agreements. Such agreements may be terminated at the
Company's option, in which event such cash held in escrow is required to be
utilized to reduce borrowings under the Company's credit agreement.

Investment Notes Receivable -- In connection with certain transactions
discussed in Notes 9, 10 and 14, the Company has loaned funds at varying rates
of interest to certain entities which own radio stations and tower properties
that the Company is obligated, or has options, to purchase. These notes have
varying interest rates ranging from 6% to 12% and are collateralized by
substantially all of the assets of the related radio stations.

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 amounts reported in the financial
statements and accompanying notes. In the process of preparing its consolidated
financial statements, the Company estimates the appropriate carrying value of
certain assets and liabilities which are not readily apparent from other
sources. The primary estimates underlying the Company's financial statements
include allowances for potential bad debts on accounts and notes receivable, the
useful lives of its assets such as property and intangibles, fair values of
financial instruments, the realizable value of its tax assets and accruals for
health insurance and other matters. Management bases its estimates on certain
assumptions, which they believe are reasonable in the circumstances, and while
actual results could differ from those estimates, management does not believe
that any change in those assumptions in the near term would have a material
effect on its financial position, results of operations or liquidity.

Income Taxes -- Deferred taxes are provided to reflect temporary
differences in bases between book and tax assets and liabilities, and net
operating loss carryforwards. Deferred tax assets and liabilities are measured
using currently enacted tax rates. (See Note 6.)

Retirement Plans -- The Company has a 401(k) plan covering substantially
all employees, subject to certain minimum age and length-of-employment
requirements. Under the plan, the Company matches 30% of participants'
contributions up to 5% of compensation. The Company contributed approximately
$225,000, $293,000 and $849,000 to the plan for the years ended December 31,
1995, 1996, and 1997, respectively.

Recent Accounting Pronouncements -- In June 1997, the FASB issued FAS No.
130, "Reporting Comprehensive Income" (FAS 130), and FAS No. 131 "Disclosures
about Segments of an Enterprise and Related Information" (FAS 131). These
pronouncements will be effective in 1998. FAS 130 establishes standards for
reporting and display of comprehensive income items. Financial statement amounts
will not be affected by this adoption. FAS 131 established standards for
reporting information about the operating segments in its annual report and
interim reports. The Company does not anticipate that the adoption of FAS 131
will have a material impact on the Company's financial information.

In February 1998, the FASB issued SFAS No. 132 (FAS 132) "Employers'
Disclosures about Pensions and Other Postretirement Benefits," which the Company
will be required to adopt in 1998. FAS 132 will require additional disclosure
concerning changes in the Company's pension obligations and assets and
eliminates certain other disclosures no longer considered useful. Adoption will
not have any effect on reported results of operations or financial position.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
comprehensive income, depending on whether a derivative is designated as part of
a hedge transaction and if it is, the type of hedge transaction. For fair-value
hedge transactions in which the Company is hedging changes in an asset's,
liability's or firm commitment's fair value, changes in the fair value of the
derivative instrument will generally be offset in the income statement by
changes in the hedged item's fair value. For cash flow hedge transactions,
changes in the fair value of the derivative instrument will be reported in
comprehensive income. The gains and losses on the derivative instrument that are
reported in other comprehensive income will be reclassified as earnings in the
periods in which earnings are impacted by the variability of the cash flows of
the hedged item. The ineffective portion of all hedges will be recognized in
current period earnings. The Company currently expects to adopt FAS 133 for the
year ending December 31, 1999. Management does not believe that the adoption of
FAS 133 will have a material impact on its results of operations or financial
position.

Cash Flow Information -- For purposes of the statements of cash flows, the
Company considers all highly liquid, short-term investments with remaining
maturities of three months or less when purchased to be cash and cash
equivalents.

Cash payments for interest expense aggregated approximately $9,890,000,
$14,239,000 and $55,465,000 for the years ended December 31, 1995, 1996, and
1997, respectively.

Cash payments for income taxes aggregated approximately $1,808,000,
$3,086,000 and $2,675,000 for the years ended December 31, 1995, 1996, and 1997,
respectively.

Significant non-cash investing and financing transactions, apart from the
barter transactions discussed above, are as follows:

For the year ended December 31, 1995:

Accrued and unpaid Common Deferred Yield Distributions on the Series C
Common Stock aggregated $815,000. (See Note 7.)

In connection with the acquisition of a radio station, the Company issued a
$500,000 note to the previous owner.

Capital lease obligations of approximately $201,000 were incurred for
office furniture and equipment.

In connection with the Company's initial public offering of its Class A
Common Stock (the "Initial Public Offering"), the Company exchanged
approximately 939,000 shares of Senior Series Common Stock for approximately
268,000 shares of Class B Common Stock and approximately 671,000 shares of Class
C Common Stock. (See Note 8).

The Company's obligation to repurchase the shares of the beneficiaries of a
Predecessor Entity's Employee Stock Ownership Plan was canceled as a result of
the Initial Public Offering and pursuant to a vote by the Board of Directors
effective September 30, 1995. (See Note 7).

For the year ended December 31, 1996:

In connection with radio station and tower acquisitions, the Company
assumed approximately $4,437,000 in liabilities and issued shares of Class A
Common Stock with an agreed upon value of approximately $72,153,000. (See Note
9).

F-33
<PAGE> 123
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Capital lease obligations of approximately $390,000 were incurred for
office furniture and equipment. (See Note 3).

For the year ended December 31, 1997:

In connection with radio station and tower acquisitions, the Company
assumed approximately $227,413,000 in liabilities and issued shares of Class A
Common Stock with a value of approximately $311,300,000. The Company received
approximately $69,277,000 of restricted cash as consideration for disposed radio
stations and approximately $42,848,000 of this restricted cash was used as
consideration for radio station acquisitions. The Company also exchanged
approximately $44,352,000 in investment notes as consideration towards radio
station and tower acquisitions. (See Note 9).

The Company issued 105,602 additional shares of Cumulative Exchangeable
Preferred Stock as dividend payments in kind. (See Note 7).

Capital lease obligations of approximately $40,000 were incurred for office
equipment. (See Note 3).

Reclassifications -- Certain reclassifications have been made to the prior
year financial statements to conform with the 1997 presentation.

2. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31 (in
thousands):

<TABLE>
<CAPTION>
1996 1997
------- --------
<S> <C> <C>
Land and improvements..................................... $10,754 $ 9,374
Buildings and improvements................................ 21,842 43,250
Broadcast equipment....................................... 32,607 73,564
Office equipment, furniture, fixtures and other
equipment.............................................. 8,318 19,537
Assets under capital lease obligations.................... 1,259 1,311
Construction in progress.................................. 4,627 2,430
------- --------
Total............................................. 79,407 149,466
Less accumulated depreciation and amortization............ (8,869) (16,895)
------- --------
Property and equipment--net............................... $70,538 $132,571
======= ========
</TABLE>

Accumulated amortization for the assets under capital leases aggregated
approximately $659,000 and $847,000 at December 31, 1996 and 1997, respectively.

F-34
<PAGE> 124
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. LONG-TERM DEBT

Outstanding amounts under the Company's long-term debt arrangements
consisted of the following as of December 31 (in thousands):

<TABLE>
<CAPTION>
1996 1997
-------- --------
<S> <C> <C>
Credit Agreements........................................... $151,500 $505,000
Senior Subordinated Notes................................... 173,665 327,691
Other Obligations........................................... 972 1,287
-------- --------
Total....................................................... 326,137 833,978
Less current maturities..................................... (444) (340)
-------- --------
Long-term debt.............................................. $325,693 $833,638
======== ========
</TABLE>

Credit Agreements -- In January 1997, the Company entered into two new
credit agreements with a syndicate of banks (collectively, the "1997 Credit
Agreement"), which replaced the previously existing credit agreement. All
amounts outstanding under the previous agreement were repaid with proceeds from
the 1997 Credit Agreement; the following discussion, with the exception of
information regarding interest rates, is based upon the terms and conditions of
the 1997 Credit Agreement. Collectively, the previous credit agreement and the
1997 Credit Agreement are referred to as the Credit Agreements.

The 1997 Credit Agreement consists of two separate lending agreements,
providing for facilities consisting of a $550.0 million reducing revolver credit
facility which is available through December 31, 2004, a $200.0 million
revolving credit converting to a term loan facility maturing December 31, 2004,
and a $150.0 million term loan facility, maturing December 31, 2004, available
in connection with certain note obligations of EZ Communications; the $150.0
million facility was not needed, and has expired unused.

Amounts outstanding under the Credit Agreements bear interest based upon a
variable base rate adjusted for a margin which is determined by reference to
certain financial ratios of the Company, generally related to leverage. Until
such time as the Company requests that rates be fixed or capped, rates are
determined, at the option of the Company, by reference to either the Eurodollar
rate plus certain percentages, or an alternate base rate (as defined) plus
certain percentages. The weighted average interest rates under the Credit
Agreements were approximately 8.0% and 7.4% for the years ended December 31,
1996 and 1997, respectively.

There was $74.8 million and $48.0 million available under the Credit
Agreements at December 31, 1996 and 1997, respectively. In connection with the
Credit Agreements, the Company is obligated to pay commitment fees based on a
percentage of the unused portion of the available commitments (the fee varies
depending upon which facility is affected and the Company's leverage ratio).
Commitment fees paid related to the Credit Agreements were approximately
$24,500, $1,113,000 and $1,111,000 in 1995, 1996 and 1997, respectively.

The 1997 Credit Agreement contains certain financial and operational
covenants and other restrictions with which the Company must comply, including,
among others, limitations on certain acquisitions, additional indebtedness,
capital expenditures, and payment of cash dividends and stock repurchases. In
addition, restrictions are placed upon the use of borrowings under the 1997
Credit Agreement and the Company must maintain certain financial ratios,
principally related to leverage. Borrowings under the 1997 Credit Agreement are
collateralized by a first security interest in the capital stock of the
Company's Restricted Subsidiaries (as defined in the 1997 Credit Agreement), all
FCC licenses, and all financial instruments (including the station

F-35
<PAGE> 125
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. LONG-TERM DEBT -- (CONTINUED)
investment note receivables) and material agreements. The Company's Restricted
Subsidiaries have guaranteed the obligations of the Company under the 1997
Credit Agreement.

Senior Subordinated Notes -- In February 1996, the Company sold
$175,000,000 of 9% Senior Subordinated Notes due 2006 (the "Subordinated Notes")
at a discount of $1,419,000 to yield 9.125% (the Debt Offering). Proceeds to the
Company, net of underwriters' discount and associated costs, were approximately
$167.5 million.

As of December 31, 1997, the Subordinated Notes aggregated approximately
$173,765,000 net of an unamortized discount of approximately $1,235,000.
Interest is payable semi-annually on February 1 and August 1 with the face
amount of the Subordinated Notes due on February 1, 2006. The Subordinated Notes
are redeemable at the option of the Company, in whole or in part at any time on
or after February 1, 2001 and prior to maturity, at the following redemption
prices (expressed as percentages of principal amount) plus accrued and unpaid
interest, if any, to but excluding the redemption date, if redeemed during the
12-month period beginning February 1 of the years indicated: 2001 -- 104.5%;
2002 -- 103.0%; 2003 -- 101.5%; 2004 and thereafter -- 100.0%. Notwithstanding
the foregoing, at any time prior to February 1, 1999, the Company may redeem up
to $58.3 million principal amount of the Subordinated Notes from the net
proceeds of a public equity offering (as defined in the Subordinated Notes
indenture) at a redemption price equal to 109.0% of the principal amount thereof
plus accrued and unpaid interest, if any, to the Redemption Date, provided that
at least $116.7 million principal amount of the Subordinated Notes remain
outstanding immediately after the occurrence of any such redemption. The
Subordinated Notes are subordinate in right of payment to the prior payment in
full of all obligations under the 1997 Credit Agreement. The Subordinated Notes
contain certain covenants including, but not limited to, limitations on sales of
assets, dividend payments, future indebtedness and issuance of preferred stock,
and require an offer to purchase within 15 days after the occurrence of a Change
of Control (as defined) the outstanding subordinated Notes at a purchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of purchase. A Change of Control will occur upon the
consummation of the CBS Merger. Proceeds from the Debt Offering and the equity
offering, discussed in Note 8, were used to repay outstanding borrowings under
the Credit Agreements.

As part of the EZ Merger, the Company assumed EZ's obligations with respect
to $150.0 million principal amount of the EZ 9.75% Senior Subordinated Notes
(the "9.75% Notes") and repaid all borrowings under the EZ credit facility with
borrowings from the 1997 Credit Agreement. As required by the closing of the EZ
Merger, the Company offered to repurchase the 9.75% Notes; such offer commenced
in April 1997 and expired in May 1997, with no such notes being tendered for
purchase. As of December 31, 1997, the 9.75% Notes aggregated approximately
$153,926,000 net of an unamortized premium of approximately $3,926,000. Interest
is payable semi-annually on June 1 and December 1 with the face amount of the
Subordinated Notes due on December 1, 2005. The 9.75% Notes are redeemable at
the option of the Company, in whole or in part at any time on or after December
1, 2000 at a redemption price of 104.875% of the principal amount, plus accrued
and unpaid interest, if any, to the date of redemption. The redemption price
reduces over three years to a redemption price of 100% of the principal amount
in 2003 and thereafter. Notwithstanding the foregoing, at any time prior to
December 1, 1998, the Company may redeem up to $50.0 million of the original
aggregate principal amount of the 9.75% Note with the net proceeds of one public
offering of common stock at 109.75% of the principal amount thereof, together
with accrued and unpaid interest, if any, to the date of redemption, as long as
at least $100.0 million of the original aggregate amount of the 9.75% Notes
remain outstanding. The 9.75% Notes are general unsecured obligations of the
Company and rank pari passu in right of payment to all obligations under the
1997 Credit Agreement. The 9.75% Notes are

F-36
<PAGE> 126
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. LONG-TERM DEBT -- (CONTINUED)
guaranteed by the restricted subsidiaries as described in Note 13. The 9.75%
Notes contain certain covenants including, but not limited to, limitations on
sales of assets, dividend payments, future indebtedness and issuance of
preferred stock, and require an offer to purchase within 15 days after the
occurrence of a Change of Control (as defined) the outstanding 9.75% Notes at a
purchase price equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of the purchase.

Derivative Positions -- Under the terms of the Credit Agreements, the
Company is required, under certain conditions, to enter into interest rate
protection agreements. At December 31, 1996, ARS maintained two swap agreements
with commercial banks, expiring in September 2000, under which the interest rate
is fixed with respect to $35.5 million of notional principal amount at
approximately 7% and 10%. At December 31, 1997, the Company maintained two swap
agreements with commercial banks, one expiring in March 2000, under which the
interest rate is fixed with respect to $30.8 million of notional principal
amount at approximately 6.3%, and one expiring in March 2002, under which the
interest rate is fixed with respect to $9.0 million of notional principal amount
at approximately 6.8%. The Company maintained swap agreements with commercial
banks, expiring in September 2001, under which the interest rate is fixed with
respect to $35.5 million of notional principal amount at approximately 7.2% and
10.0%. The Company maintained a swap agreement with a commercial bank, expiring
in March 2002, under which the interest rate is fixed with respect to $37.0
million notional principal amount from March 2000 up to September 2001 and $72.6
million notional principal amount thereafter at approximately 6.8%. The Company
also maintained a cap agreement with a commercial bank, expiring in April 2000,
under which the interest rate is fixed with respect to $119.7 million of
notional principal amount at approximately 9.5%. The Company intends to enter
into new agreements, at least to the extent necessary to comply with the
requirements of the 1997 Credit Agreement (50% of the total variable interest
rate indebtedness of the Company must bear fixed interest). The Company's
exposure under these agreements is limited to the impact of variable interest
rate fluctuations and the periodic settlement of amounts due under these
agreements if the other parties fail to perform. However, the Company does not
anticipate nonperformance by the counterparties. (See Note 11.)

Other Obligations -- In connection with various acquisitions, the Company
has assumed certain long-term obligations of the acquired entities.
Substantially all of these obligations were repaid during 1997, with the
remaining unpaid obligation payable in monthly installments through 2014. In
1997, the Company also agreed to borrow $750,000 from a lessor to fund leasehold
improvements. The unsecured note is payable through 2012 and bears interest at
an effective rate of 10.0%.

Future principal payments required under the Company's long-term debt
arrangements at December 31, 1997 are as follows (in thousands):

<TABLE>
<S> <C>
YEAR ENDING DECEMBER 31:
- ------------------------------------------------------------

1998........................................................ $ 340
1999........................................................ 152
2000........................................................ 132
2001........................................................ 32
2002........................................................ 35
Thereafter through 2015..................................... 833,287
--------
TOTAL............................................. $833,978
========
</TABLE>

F-37
<PAGE> 127
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. LONG-TERM DEBT -- (CONTINUED)
Extraordinary Losses -- In 1995, the Company replaced its then existing
credit facility, and, in connection with repayment of borrowings under that
facility, recognized an extraordinary loss of $817,000, net of a tax benefit of
$614,000, representing the write-off of deferred financing fees for the old
facility. Following the closing of the 1997 Credit Agreement in January 1997 and
repayment of amounts outstanding under the previous agreement, the Company
recognized an extraordinary loss of approximately $1.6 million, net of a tax
benefit of $1.0 million, representing the write-off of deferred financing fees
associated with the previous agreement.

4. COMMITMENTS AND CONTINGENCIES

Broadcast Rights -- At December 31, 1997, the Company was committed to the
purchase of broadcast rights for various sports events, and other programming,
including on-air talent, aggregating approximately $42,120,000. This programming
is not yet available for broadcast. Expenses for broadcast rights totaled
$5,254,000, $7,040,000, and $8,518,000 for the years ended December 31, 1995,
1996, and 1997, respectively. As of December 31, 1997, aggregate payments
related to these commitments are as follows (in thousands):

<TABLE>
<S> <C>
YEAR ENDING DECEMBER 31:
- ------------------------------------------------------------

1998........................................................ $13,822
1999........................................................ 12,809
2000........................................................ 10,795
2001........................................................ 4,634
2002........................................................ 60
-------
TOTAL............................................. $42,120
=======
</TABLE>

Leases -- The Company leases various offices, studios, and broadcast and
other equipment under operating leases that expire over various terms. Most
leases contain renewal options with specified increases in lease payments in the
event of renewal by the Company.

Future minimum rental payments required under non-cancelable operating
leases in effect at December 31, 1997 are as follows (in thousands):

<TABLE>
<S> <C>
YEAR ENDING DECEMBER 31:
- ------------------------------------------------------------
1998........................................................ $ 6,476
1999........................................................ 6,114
2000........................................................ 5,596
2001........................................................ 4,057
2002........................................................ 3,700
Thereafter through 2041..................................... 17,807
-------
TOTAL............................................. $43,750
=======
</TABLE>

Aggregate rent expense under operating leases for the years ended December
31, 1995, 1996 and 1997 approximated $1,764,000, $3,906,000 and $7,635,000,
respectively.

F-38
<PAGE> 128
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. COMMITMENTS AND CONTINGENCIES -- (CONTINUED)
Audience Rating and Other Service and Employment Contracts -- The Company
has entered into various non-cancelable audience rating and other service and
employment contracts that expire over the next five years. Most of these
audience rating and other service agreements are subject to escalation clauses
and may be renewed for successive periods ranging from one to five years on
terms similar to current agreements, except for specified increases in payments.
Management believes that, in the normal course of business, these contracts will
be renewed or replaced by similar contracts.

Future minimum payments required under these contracts at December 31, 1997
are as follows (in thousands):

<TABLE>
<S> <C>
YEAR ENDING DECEMBER 31:
- ------------------------------------------------------------

1998........................................................ $ 8,086
1999........................................................ 6,971
2000........................................................ 4,527
2001........................................................ 2,298
2002........................................................ 1,289
Thereafter through 2012..................................... 3,808
-------
TOTAL............................................. $26,979
=======
</TABLE>

Total expenses under these contracts for the years ended December 31, 1995,
1996 and 1997 approximated $2,426,000, $4,117,000 and $11,438,000, respectively.

Acquisition Commitments -- See Notes 9, 10 and 14 for information with
respect to station acquisition commitments.

Litigation -- In the normal course of business, the Company is subject to
certain suits and other matters. Management believes that the eventual
resolution of any pending matters, either individually or in the aggregate, will
not have a material effect on the Company's consolidated financial position,
results of operations or liquidity.

5. RELATED-PARTY TRANSACTIONS

An individual, who is a stockholder of the Company and was a limited
partner and creditor of two of the Predecessor Entities, is a partner in a law
firm which represents the Company, and certain associates of this firm serve as
assistant secretaries to the Company. Legal fees and other expenses incurred for
services rendered by this firm to the Company approximated $772,000, $2,038,000
and $1,585,000 for the years ended December 31, 1995, 1996 and 1997,
respectively.

An affiliate of Chase Equity Associates ("CEA"), a stockholder of the
Company, is a co-syndication agent and an approximate 9% participant under prior
credit agreements. A company director is also a general partner of CEA. For the
years ended December 31, 1995, 1996 and 1997, the stockholder affiliate's share
of interest and fees paid by the Company pursuant to the provisions of the
Credit Agreements were $1,688,500, $553,000 and $2,711,000, respectively.

F-39
<PAGE> 129
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. INCOME TAXES

The income tax provision (benefit) from continuing operations was comprised
of the following for the years ended December 31 (in thousands):

<TABLE>
<CAPTION>
1995 1996 1997
------ ------ -------
<S> <C> <C> <C>
CURRENT:
Federal.............................................. $1,914 $2,775 $ 3,474
State................................................ 623 809 914
DEFERRED:
Federal.............................................. 4,023 812 (4,824)
State................................................ 343 141 (805)
Benefit from disposition of stock options (recorded to
additional paid-in capital).......................... 244 1,297
------ ------ -------
Income tax provision................................... $6,903 $4,781 $ 56
====== ====== =======
</TABLE>

A reconciliation between the U.S. statutory rate and the effective rate
from continuing operations is as follows for the years ended December 31:

<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Statutory tax rate.......................................... 34% 34% (34)%
State taxes, net of federal benefit......................... 4 6 (6)
Goodwill amortization....................................... 1 4 51
Amortization of intangibles................................. 1 1
Meals and entertainment..................................... 1 3 14
Valuation allowance......................................... (25)
Other -- net................................................ 3 (2)
-- --- ---
Effective tax rate -- continuing operations................. 43% 46% 1%
== === ===
</TABLE>

Total income taxes (benefit) for the years ended December 31 (in
thousands):

<TABLE>
<CAPTION>
1995 1996 1997
------ ------- -------
<S> <C> <C> <C>
Continuing operations.................................. $6,903 $ 4,781 $ 56
Discontinued operations................................ (74) 45 (935)
Extraordinary items.................................... (614) -- (1,013)
------ ------- -------
Total income taxes (benefit)........................... $6,215 $ 4,826 $(1,892)
====== ======= =======
</TABLE>

F-40
<PAGE> 130
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. INCOME TAXES -- (CONTINUED)
Significant components of the Company's deferred tax assets and
liabilities, computed using currently enacted tax rates, are as follows at
December 31 (in thousands):

<TABLE>
<CAPTION>
1996 1997
-------- ---------
<S> <C> <C>
CURRENT ASSETS:
Allowances and accruals made for financial reporting
purposes which are currently nondeductible............. $ 3,370 $ 4,013
Net operating loss carryforward........................... 75
Net operating loss carryback.............................. 2,277
-------- ---------
TOTAL CURRENT ASSETS.............................. $ 3,370 $ 6,365
======== =========
LONG-TERM ITEMS:
Assets:
Allowances made for financial reporting purposes which
are currently nondeductible.......................... $ 277 $ 2,868
Net operating loss carryforwards....................... 1,010 717
Valuation allowance.................................... (1,010)
LIABILITIES:
Property and equipment and intangible
assets -- principally due to tax amortization methods
for tax purposes..................................... (33,203) (199,195)
-------- ---------
Net long-term deferred tax liabilities.................... $(32,926) $(195,610)
======== =========
</TABLE>

At December 31, 1997, the Company has net operating loss carryforwards
available to reduce future taxable income of $2,260,000 for federal and state
purposes. These loss carryforwards expire through 2009. During 1997, as a result
of increases in taxable income and certain tax planning strategies, certain of
these assets were realized and the entire valuation allowance of $1,010,000 was
removed.

7. REDEEMABLE STOCK

Activity related to the classes of redeemable stock for the year ended
December 31, 1995 is as follows (in thousands):

<TABLE>
<CAPTION>
SERIES C SERIES A
----------------- -----------------
SHARES AMOUNT SHARES AMOUNT
------ ------- ------ -------
<S> <C> <C> <C> <C>
Balance, January 1, 1995........................ 1,714 $13,765 382 $ 3,432
Reclassification against additional paid-in
capital.................................... (382) (3,432)
Distributions accrued in kind................. 815
Distributions paid............................ (2,580)
Conversion to Common Stock.................... (939)
Share redemption.............................. (775) (12,000)
----- ------- ----- -------
Balance, December 31, 1995...................... 0 $ 0 0 $ 0
===== ======= ===== =======
</TABLE>

Senior Common Stock -- Holders of the Senior Series C Common Stock (the
"Senior Common Stock") were entitled to quarterly cash distributions (the
"Common Yield Distributions") equal to 10% of the stock's initial "preferred
distribution amount," compounded on a daily basis.

F-41
<PAGE> 131
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. REDEEMABLE STOCK -- (CONTINUED)
Series A Common Stock -- Repurchase Obligation to ESOP Stockholders -- The
Company was obligated to repurchase shares of Class A Common Stock held by an
employee stock ownership plan ("ESOP") of a Predecessor Entity. During 1995, the
Company repurchased at fair market value approximately 18,000 shares.

As a result of the Initial Public Offering, the Board of Directors of the
Company voted effective September 30, 1995 to amend the ESOP to eliminate the
right of beneficiaries to require the Company to purchase their shares. Pursuant
to this amendment, the Company reclassified the long-term portion of its
obligation of approximately $3.4 million to additional paid-in capital. The
Board of Directors also voted effective December 31, 1995 to terminate the ESOP.
During 1996, the Company applied for a favorable determination letter from the
IRS with respect to termination of the plan, which was received in March 1997.
The Company is in the process of terminating the ESOP. Accordingly, the ESOP has
distributed approximately 315,000 shares of Class A Common Stock to participants
through February 1998. Upon distribution of approximately 13,000 remaining
shares, the ESOP will be terminated.

Cumulative Exchangeable Preferred Stock -- In January 1997, the Company
consummated a private offering of 2,000,000 shares of its 11 3/8% Cumulative
Exchangeable Preferred Stock ("Exchangeable Preferred Stock") to a group of
qualified institutional investors. The Company utilized the net proceeds, which
approximated $192.1 million, to repay amounts outstanding under the 1997 Credit
Agreement and to fund acquisitions. Shares of Exchangeable Preferred Stock are
exchangeable, at the Company's option, in whole but not in part, on any dividend
payment date commencing April 15, 1997 into the Company's 11 3/8% Subordinated
Exchange Debentures due 2009 ("Exchange Debentures"). As discussed below, the
Exchangeable Preferred Stock possesses mandatory redemption features and is
classified as such in the Company's consolidated financial statements.

Dividends on the Exchangeable Preferred Stock are cumulative at an annual
rate of 11 3/8% (equivalent to $11.375 per share), accruing from the date of
original issuance (January 30, 1997) and are payable quarterly in arrears on
April 15, July 15, October 15, and January 15, commencing April 15, 1997. The
Company's ability to pay dividends is restricted under the terms of the
Subordinated Notes and is prohibited during the existence of a default under the
Company's 1997 Credit Agreement or the Subordinated Note Indenture. The Company
has the right, on or prior to January 15, 2002, to pay dividends through the
issuance of additional shares of Exchangeable Preferred Stock. The Company met
all tests and approximately 105,602 additional shares were issued and $5,988,000
of accrued dividends were paid through December 31, 1997.

The Exchangeable Preferred Stock is redeemable at the option of the
Company, for cash at any time after January 15, 2002, initially at 105.688% of
the liquidation preference, declining ratably immediately after January 15,
2007, plus accrued and unpaid dividends at the date of the redemption. In
addition, prior to January 15, 2000, the Company may, at its option, use the net
cash proceeds of an offering to redeem up to 35% of the outstanding Exchangeable
Preferred Stock at 111.375% of the liquidation preference, plus accumulated and
unpaid dividends to the date of redemption; provided that after any such
redemption, there must be at least $130.0 million aggregate liquidation
preference of the Exchangeable Preferred Stock outstanding. The Company is
required, subject to certain conditions, to redeem all Exchangeable Preferred
Stock outstanding on January 15, 2009, at a redemption price to 100% of the
liquidation preference, plus accumulated and unpaid dividends to the date of
redemption. Within 15 days after the occurrence of a Change in Control, the
Company, will be required, subject to certain conditions, to offer to purchase
all of the then outstanding shares at a price equal to 101% of the liquidation
preference, plus accumulated and unpaid

F-42
<PAGE> 132
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. REDEEMABLE STOCK -- (CONTINUED)
dividends to the date of redemption. A Change of Control will occur upon the
consummation of the CBS Merger. During the first quarter of 1998, the Company
paid the holders of the Exchangeable Preferred Stock consent fees aggregating
$2.1 million in connection with certain amendments to the holders' Exchangeable
Preferred Stock agreements.

8. STOCKHOLDERS' EQUITY

Common Stock Classes -- The Class A Common Stock and Class B Common Stock
entitle the holder to one and ten votes, respectively, per share. The Class C
Common Stock is nonvoting.

Convertible Exchangeable Preferred Stock Offering -- The outstanding
Convertible Exchangeable Preferred Stock ("Convertible Preferred Stock")
consists of 137,500 shares (2,750,000 Depositary Shares, each Depositary Share
represents ownership of one-twentieth of a share of Convertible Preferred
Stock). Proceeds to the Company of the sale of these shares in June 1996, net of
underwriters' discount and associated costs, were approximately $132.8 million.
Proceeds from the offering were used to fund acquisitions. Shares of Convertible
Preferred Stock are convertible at the option of the holder at any time, unless
previously redeemed or exchanged, into shares of Class A Common Stock, par value
$.01 per share, of the Company at a conversion price of $42.50 per share of
Class A Common Stock (equivalent to a conversion rate of 1.1765 shares of Class
A Common Stock per Depositary Share), subject to adjustment in certain events.

The Convertible Preferred Stock is redeemable, in whole or in part, at the
option of the Company, for cash at any time after July 15, 1999, initially at
$1,049 per share ($52.45 per Depositary Share), declining ratably immediately
after July 15 of each year thereafter to a redemption price of $1,000 per share
($50 per Depositary Share) after July 15, 2006, plus in each case accrued and
unpaid dividends. The Convertible Preferred Stock will be exchangeable, subject
to certain conditions, at the option of the Company, in whole but not in part,
on any dividend payment date commencing June 30, 1997 for the Company's 7%
Convertible Subordinated Debentures due 2011 (the "Exchange Debentures") at a
rate of $1,000 principal amount of Exchange Debentures for each share of
Convertible Preferred Stock ($50 principal amount for each Depositary Share).

Dividends on the Convertible Preferred Stock are cumulative at an annual
rate of 7% (equivalent to $3.50 per Depositary Share), accruing from the date of
original issuance (June 25, 1996) and are payable quarterly in arrears on March
31, June 30, September 30, and December 31, commencing September 30, 1996. The
Company's ability to pay dividends is restricted under the terms of the
Subordinated Notes (see Note 3) and is prohibited during the existence of a
default under the Company's Credit Agreements or the Subordinated Notes. The
Company met all tests and approximately $9,625,000 of accrued dividends had been
paid through December 31, 1997.

Common Stock Offerings -- In February 1996, the Company consummated an
offering of approximately 5,515,000 shares of Class A Common Stock at an
offering price of $27 per share, consisting of 4,000,000 shares initially sold
by the Company, approximately 1,013,000 shares sold by selling shareholders and
approximately 501,000 shares sold by the Company pursuant to the exercise of the
underwriters' over-allotment option. Proceeds to the Company, net of
underwriters' discount and associated costs, were approximately $114.5 million
and were utilized to repay existing debt and fund acquisitions.

In June 1995, the Company consummated an initial public offering of
5,500,000 shares of the Company's Class A Common Stock ($.01 par value) at a
price of $16.50 per share. The total shares issued pursuant to the

F-43
<PAGE> 133
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. STOCKHOLDERS' EQUITY -- (CONTINUED)
Initial Public Offering consisted of 4,270,000 shares initially sold by the
Company, 730,000 shares by selling shareholders and an additional 500,000 shares
sold by the Company pursuant to the underwriters' over-allotment option.
Proceeds to the Company, net of underwriters' discount and associated costs,
were approximately $70.4 million. The Company used the proceeds of a liquidation
preference associated with the Company's Senior Common Stock ($14.6 million) to
reduce indebtedness under the then existing credit agreement ($54.0 million) and
to repay certain stockholder notes ($1.0 million). The remaining proceeds were
used to fund current working capital needs.

Capital Deficiency Upon Combination -- In connection with accounting for
the Combination, the Predecessor Entities' accumulated deficits or retained
earnings at formation in 1993 were carried forward into the Company in the form
of a capital deficiency account. The Company has reclassified the balance of the
capital deficiency upon combination against additional paid-in capital in the
accompanying financial statements.

ARS Stock Option Plan -- ARS has a stock option plan which provides for the
granting of options to employees to acquire up to 3,000,000 shares of Class A
and B Common Stock. Exercise prices in the case of incentive stock options are
not less than the fair value of the underlying Class A Common Stock on the date
of grant. Exercise prices in the case of nonqualified stock options are set at
the discretion of the Board of Directors. Options vest ratably over various
periods, generally five years, commencing one year from the date of grant.

The following table summarizes option activity:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
EXERCISE PRICES
OPTIONS PER SHARE
--------- ----------------
<S> <C> <C>
Outstanding as of December 31, 1994...................... 892,000 $ 6.88
Granted................................................ 362,000 $12.58
Cancelled.............................................. (4,800) $ 6.38
Exercised.............................................. (1,200) $ 6.38
--------- ------
Outstanding as of December 31, 1995...................... 1,248,000 $ 8.54
Granted/issued(1)...................................... 740,500 $29.40
Cancelled(1)........................................... (260,600) $ 7.11
Exercised.............................................. (28,800) $ 6.84
--------- ------
Outstanding as of December 31, 1996...................... 1,699,100 $14.56
Granted/issued......................................... 593,000 $28.07
Issued in connection with EZ Merger.................... 362,239 $ 2.70
Cancelled.............................................. (5,000) $28.25
Exercised.............................................. (96,261) $ 9.67
--------- ------
Outstanding as of December 31, 1997...................... 2,553,078 $15.55
========= ======
</TABLE>

- ---------------
(1) Includes 253,000 options which were canceled and reissued at the December
31, 1996 fair market value of $27.25.

F-44
<PAGE> 134
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. STOCKHOLDERS' EQUITY -- (CONTINUED)
Options exercisable:

<TABLE>
<CAPTION>
WEIGHTED-AVERAGE
EXERCISE PRICES
PER SHARE
----------------
<S> <C> <C>
December 31, 1995................................. 271,200 shares $6.61
December 31, 1996................................. 520,800 shares $7.58
December 31, 1997................................. 1,155,095 shares $7.91
</TABLE>

In February 1995, the Board granted options to employees to acquire 282,000
shares of Class B Common Stock with exercise prices below the fair market value
at the date of grant ($11.50 per share). In addition, the Board, in June 1995,
granted options to an employee to acquire 10,000 shares of Class B Common Stock
at an exercise price below fair market value. Fair market value at date of grant
was determined based on advice from the Company's investment banker. Unearned
compensation with respect to these options aggregated $473,000 and is being
amortized over the period that the options vest (five years). Amortization
aggregating $82,000, $94,000 and $94,000 was recorded for the years ended
December 31, 1995, 1996 and 1997, respectively.

The following table sets forth information regarding ARS options
outstanding at December 31, 1997:

<TABLE>
<CAPTION>
WEIGHTED-AVERAGE
RANGE OF NUMBER WEIGHTED-AVERAGE EXERCISE PRICE FOR
NUMBER EXERCISE PRICE CURRENTLY EXERCISE PRICE WEIGHTED-AVERAGE CURRENTLY
OF OPTIONS PER SHARE EXERCISABLE PER SHARE REMAINING LIFE EXERCISABLE
---------- -------------- ----------- ----------------- ----------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
504,916 $ 6.38 403,933 $ 6.38 1.0 $ 6.38
315,200 $ 6.38- 9.90 189,120 $ 7.80 1.6 $ 7.80
350,600 $ 9.88-23.75 140,240 $12.66 2.2 $12.66
465,700 $25.00-39.13 93,140 $26.16 3.5 $26.16
916,662 $ 1.39-38.81 328,662 $18.98 4.2 $ 2.73
--------- ------------ --------- ------ --- ------
2,553,078 $ 1.39-39.13 1,155,095 $15.55 2.8 $ 7.91
========= ============ ========= ====== === ======
</TABLE>

Pro Forma Disclosure -- As described in Note 1, the Company uses the
intrinsic value method to measure compensation expense associated with grants of
stock options or awards to employees. Had the Company used the fair value method
to measure compensation for grants under all plans made in 1995, 1996 and 1997,
reported basic income (loss) applicable to common stockholders and income (loss)
per share would have been $7,257,000 or $0.61 per share in 1995, $(858,000) or
$(0.04) per share in 1996, and $(44,272) or $(1.62) per share in 1997. Diluted
income per share for 1995 would have been $.58 per share.

The "fair value" of each option grant is estimated on the date of grant
using the Black/Scholes option pricing model. Key assumptions used to apply this
pricing model are as follows:

<TABLE>
<CAPTION>
1995 AND 1996 1997
------------- -------
<S> <C> <C>
Approximate risk-free interest rate......................... 6.0% 6.0%
Expected life of option grants.............................. 5 years 5 years
Expected volatility of underlying stock..................... 35.0% 40.0%
</TABLE>

F-45
<PAGE> 135
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. STOCKHOLDERS' EQUITY -- (CONTINUED)
The estimated weighted-average fair value of option grants made during
1995, 1996 and 1997 was $5.47, $11.88 and $7.32, respectively, per option.

Reserved Shares -- The Company has reserved 1,400,000 shares of Class A
Common Stock and 1,600,000 shares of Class B Common Stock for issuance under
ARS' stock option plan (the "Plan").

9. ACQUISITIONS AND DISPOSITIONS

General: The following acquisitions have been accounted for by the purchase
method of accounting, and, accordingly, the operating results of the acquired
entities, to the extent that a local marketing agreement LMA did not exist, have
been included in consolidated operating results since the date of acquisition.
Stations obtained by exchange of similar properties are recorded at the carrying
value of the station given as consideration. The purchase price has been
allocated to the assets acquired, principally intangible assets, and the
liabilities assumed based on their estimated fair values at the dates of
acquisition. The excess of purchase price over the estimated fair value of the
net assets acquired has been recorded as goodwill. The financial statements
reflect the preliminary allocation of certain purchase prices as the appraisals
for certain acquisitions have not yet been finalized. The Company does not
expect the final appraisals will have a material effect on the financial
position, results of operations or liquidity of the Company.

1997 STATION ACQUISITIONS AND DISPOSITIONS:

EZ Merger: On April 4, 1997, the Company consummated the merger of EZ into
the Company (the "EZ Merger"). Pursuant to the EZ Merger, the Company acquired
eighteen FM and six AM stations in eight markets: Seattle, St. Louis,
Pittsburgh, Sacramento, Charlotte, Kansas City, New Orleans and Philadelphia,
assumed approximately $222.4 million of long-term debt (of which approximately
$72.7 was paid at closing), paid approximately $108.9 million in cash and issued
approximately 8,344,000 shares of Class A Common Stock to the EZ stockholders
valued at approximately $310.8 million (excluding approximately 362,000 shares
of common stock reserved for options held by former employees of EZ valued at
approximately $12.5 million). The aggregate purchase price was approximately
$830.0 million, including goodwill, approximately $7.0 million in transaction
costs, and assumed liabilities (including deferred income taxes) of
approximately $428.0 million. The EZ Merger has been accounted for using an
effective closing date of April 1, 1997, as the difference between the actual
and effective closing date on the results of operations, liquidity and financial
position was not material.

As part of the EZ Merger, the Company assumed EZ's obligations with respect
to $150.0 million principal amount of the EZ 9.75% Senior Subordinated Notes
(the 9.75% Notes) and repaid all borrowings under the EZ credit facility with
borrowings from the 1997 Credit Agreement. (See Note 3).

Austin: In March 1997, the Company acquired KAMX-FM, KKMJ-FM, and KJCE-AM
for approximately $28.7 million.

Baltimore: In February 1997, the Company acquired WWMX-FM and WOCT-FM for
approximately $90.0 million.

Boston/Worcester: In January 1997, the Company acquired WAAF-FM and WWTM-AM
for approximately $24.8 million. The Company began programming and marketing the
station pursuant to an LMA in August 1996.

F-46
<PAGE> 136
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)
In July 1997, the Company acquired WNFT-AM for approximately $4.5 million.
The Company began programming and marketing the station pursuant to an LMA
agreement in June 1997.

Charlotte and Pittsburgh: In May 1997, the Company, as successor to EZ,
consummated an asset exchange agreement pursuant to which the Company exchanged
WIOQ-FM and WUSL-FM in Philadelphia for WRFX-FM, WPEG-FM, WBAV-FM, WGIV-AM
(formerly WBAV-AM) and WFNZ-AM serving Charlotte, and also consummated an asset
purchase agreement to acquire WNKS-FM serving Charlotte for approximately $10.0
million.

In February 1997, EZ and the seller entered into a consent decree with the
U.S. Justice Department (the "Charlotte Consent Decree"). Pursuant to the
Charlotte Consent Decree, and in compliance with the FCC's multiple ownership
rules, EZ agreed to dispose of WRFX-FM, which was transferred to an independent
and insulated trustee upon consummation of the exchange. In August 1997, the
Company consummated an asset exchange agreement pursuant to which it exchanged
WRFX-FM for WDSY-FM, serving Pittsburgh, and $20.0 million.

Cincinnati: In January 1997, the Company merged with an unaffiliated
corporation pursuant to which it became a party to an agreement to acquire
WGRR-FM, for approximately $30.5 million. Pursuant to such merger, the Company
issued 18,341 shares of Class A Common Stock valued at approximately $0.5
million. In May 1997, the Company consummated the acquisition of WGRR-FM.

Cincinnati and Rochester: In February 1997, the Company acquired WVOR-FM,
WPXY-FM, WHAM-AM and WHTK-AM for approximately $31.5 million including working
capital. In April 1997, the Company exchanged WVOR-FM, WHAM-AM and WHTK-AM
serving Rochester, together with $16.0 million, for WKRQ-FM serving Cincinnati.

Dayton: In February 1997, the Company acquired WXEG-FM for approximately
$3.6 million and acquired WLQT-FM and WBBT-FM (formerly WDOL-FM) for
approximately $12.0 million.

Detroit, Philadelphia, Sacramento: In February 1997, the Company exchanged
WFLN-FM in Philadelphia for KSFM-FM and KMJI-AM serving Sacramento and sold
WQRS-FM in Detroit for approximately $20.0 million. The net assets were
classified as net assets under exchange agreement as of December 31, 1996. See
Sacramento below.

Fresno: In April 1997, the Company acquired KOOR-AM (formerly KOQO-AM) and
KOQO-FM for approximately $6.0 million.

Hartford: In November 1997, the Company acquired for a nominal amount the
New England Weather Service, based in Hartford, Connecticut pursuant to the
exercise of an option which the Company acquired for $1.0 million, in connection
with its acquisition of WTIC-AM and WTIC-FM in May 1996.

Lebanon: In October 1997, the Company acquired WYLX-FM (formerly WMMA-FM)
serving the Lebanon, Ohio market for approximately $3.0 million.

Omaha: In May 1997, the Company sold the assets of KGOR-FM, KFAB-AM and
Business Music Service Inc. for approximately $38.0 million.

Palm Springs: In December 1997, the Company acquired KEZN-FM for
approximately $5.1 million. The Company began programming and marketing the
station pursuant to an LMA agreement in October 1997.
F-47
<PAGE> 137
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)
Portsmouth: In September 1997, the Company acquired WQSO-FM (formerly
WSRI-FM), WZNN-AM, WMYF-AM and WEZR-FM for approximately $6.0 million. The
Company began programming and marketing the stations pursuant to an LMA
agreement in July 1997.

Rochester: In April 1997, the Company acquired WZNE-FM (formerly WAQB-FM),
a newly authorized Class A FM station for approximately $3.5 million.

In July 1997, the Company sold the assets of WCMF-AM for approximately $0.7
million.

Sacramento: In March 1997, the Company acquired KXOA-FM, KQPT-AM (formerly
KXOA-AM) and KZZO-FM (formerly KQPT-FM) for approximately $50.0 million. Prior
to the consummation of the acquisition, in October 1996, the Company entered
into an agreement to sell KXOA-FM for approximately $27.5 million. After the
expiration of the HSR Act waiting period, the other party to the agreement began
programming and marketing KXOA-FM pursuant to an LMA in January 1997. As a
condition to consummation of the EZ merger, KXOA-FM was transferred to an
independent and insulated trustee (under a trust for the benefit of the Company)
and was held by the trustee subject to sale pursuant to the foregoing agreement.
In June 1997, the trustee sold KXOA-FM to the ultimate purchaser.

In April 1997, the Company sold KMJI-AM for approximately $1.5 million.

Sacramento and West Palm Beach: In March 1997, the Company consummated an
agreement to exchange KSTE-AM in Sacramento and $33.0 million in cash for
WEAT-FM, WEAT-AM and WOLL-FM serving West Palm Beach.

San Jose: In February 1997, the Company acquired KBRG-FM (formerly KBAY-FM)
and KKSJ-AM for approximately $31.0 million.

In September 1997, the Company sold the assets of KKSJ-AM for approximately
$3.2 million. The acquirer began programming and marketing the stations pursuant
to an LMA agreement in June 1997.

Seattle and New Orleans: In April 1997, the Company exchanged WEZB-FM,
WRNO-FM and WBYU-AM, serving New Orleans, and $7.5 million for KBKS-FM (formerly
KCIN-FM) and KRPM-AM serving Seattle.

In June 1997, the Company sold the assets of KMPS-AM for approximately $1.8
million.

St. Louis: In July 1997, the Company sold the assets of KTRS-AM (formerly
KSD-AM) for approximately $10.0 million.

West Palm Beach: In October 1997, the Company sold the assets of WKGR-FM,
WOLL-FM, and WBZT-AM for approximately $29.0 million in cash and a tower site
which was transferred to the Tower Subsidiary.

1996 STATION ACQUISITIONS AND DISPOSITIONS:

Baltimore: In October 1996, the Company acquired the assets of WBGR-AM for
approximately $2.8 million.

Buffalo: In August 1996, the Company acquired the assets of WSJZ-FM for
approximately $12.5 million. The Company had been programming and marketing the
station pursuant to an LMA beginning in April 1996.
F-48
<PAGE> 138
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)
Fresno: In December 1996, the Company acquired the assets of KNAX-FM and
KVSR-FM (formerly KRBT-FM) for approximately $11.0 million. The Company had been
programming and marketing the stations pursuant to an LMA beginning in August
1996.

Fresno, Omaha, Portland and Sacramento: In July 1996, the Company
consummated the merger of Henry Broadcasting Company ("HBC"). Pursuant thereto,
the Company acquired KUFO-FM and KUPL-AM (formerly KBBT-AM) in Portland, Oregon,
KYMX-FM and KCTC-AM in Sacramento, California KGOR-FM and KFAB-AM in Omaha, and
KSKS-FM, KKDJ-FM, and KMJ-AM in Fresno, California, for an aggregate purchase
price of approximately $110.4 million. As part of a related transaction with the
principal stockholder of HBC, the Company acquired certain real estate used in
the business of HBC for approximately $2.0 million in cash and obtained a
five-year option to acquire certain other real estate for a purchase price of
approximately $1.0 million.

Hartford: In May 1996, the Company acquired WTIC-AM and WTIC-FM for
approximately $39.0 million, including approximately $1.1 million of working
capital. The Company also paid $1.0 million for a two-year option to purchase
for $1.00 the New England Weather Service which was purchased in 1997.

In December 1996, the Company sold WNEZ-AM serving New Britain, Connecticut
for approximately $710,000, and a loss of approximately $140,000 was recorded
upon disposition.

Las Vegas: In October 1996, the Company acquired KMZQ-FM and KXTE-FM
(formerly KFBI-FM) for approximately $28.0 million. The Company had been
programming and marketing the stations pursuant to an LMA beginning in May 1996.
As part of such transaction, the Company paid an additional $0.2 million to
acquire the seller's right (and obligation) to purchase KXNT-AM (formerly
KVEG-AM) for approximately $1.9 million which purchase, as noted below, was
consummated in September 1996.

In September 1996, the Company acquired the assets of KXNT-AM for
approximately $1.9 million. The Company had been programming and marketing the
station pursuant to an LMA beginning in May 1996.

In July 1996, the Company acquired the assets of KMXB-FM (formerly KJMZ-FM)
for approximately $8.0 million. The Company had been programming and marketing
the station pursuant to an LMA beginning in May 1996.

In July 1996, the Company acquired the assets of KLUC-FM and KXNO-AM for
approximately $11.0 million.

Philadelphia and Detroit: In May 1996, the Company consummated the
transactions contemplated by a merger agreement with Marlin Broadcasting, Inc.
("Marlin"). The Company acquired WFLN-FM in Philadelphia, Pennsylvania, WQRS-FM
in Detroit, Michigan and WTMI-FM in Miami, Florida for an aggregate purchase
price of approximately $58.5 million, together with the assumption of
approximately $9.0 million of long-term debt which was paid in full at closing.
The principal stockholder of Marlin immediately thereafter acquired WTMI-FM from
the Company for approximately $18.0 million in cash. Proceeds from the sale of
WTMI-FM were held in an escrow account pursuant to a like-kind exchange
agreement and were utilized to partially fund the Portland and San Jose
transaction discussed below. The Company retained certain Philadelphia real
estate and tower assets valued at approximately $1.5 million. In June 1996, the
Company entered into an agreement with an unaffiliated party pursuant to which
it exchanged the assets of the Philadelphia station for two stations in
Sacramento and sold the Detroit station for approximately $20.0 million in cash.
This party began programming the Philadelphia and Detroit stations

F-49
<PAGE> 139
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)
under an LMA beginning in June 1996. The net assets and liabilities of the
Detroit and Philadelphia stations included in this exchange agreement were
carried on the consolidated balance sheet as of December 31, 1996 as net assets
held under exchange agreement.

Portland: In July 1996, the Company acquired the assets of KBBT-FM
(formerly KDBX-FM) for approximately $14.0 million.

Portland and San Jose: In August 1996, the Company acquired the assets of
KUPL-FM and KKJZ-FM in Portland, Oregon and KSJO-FM and KBAY-FM (formerly
KUFX-FM) in San Jose, California for approximately $103.0 million.

Sacramento: In September 1996, the Company acquired the assets of KRRE-FM
(formerly KSSJ-FM) for approximately $14.0 million. The Company had been
programming and marketing the station pursuant to an LMA beginning in July 1996.

In July 1996, the Company acquired the assets of KSTE-AM serving Rancho
Cordova, California for approximately $7.25 million. The Company began
programming and marketing the station pursuant to an LMA beginning in April
1996.

UNAUDITED PRO FORMA INFORMATION:

The following unaudited pro forma summary presents the consolidated results
of operations as if the acquisitions that occurred in 1996 and 1997,
respectively, had occurred as of January 1, 1996 and 1997 after giving effect to
certain adjustments, including depreciation and amortization of assets and
interest expense on any debt incurred to fund the acquisitions. These unaudited
pro forma results have been prepared for comparative purposes only and do not
purport to be indicative of what would have occurred had the acquisitions been
made as of January 1, 1996 and 1997 or of results which may occur in the future.

<TABLE>
<CAPTION>
UNAUDITED
YEARS ENDED DECEMBER 31,
------------------------
1996 1997
---------- ----------
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
<S> <C> <C>
Net revenues................................................ $313,115 $389,184
Loss from continuing operations............................. (18,388) (13,024)
Loss from continuing operations applicable to common
stockholders.............................................. (23,841) (50,083)
Basic loss per common share -- continuing operations........ $ (0.82) $ (1.70)
</TABLE>

10. PENDING TRANSACTIONS

Boston and Tampa: In August 1998, the Company entered into a sales
agreement to sell WEEI-AM, WRKO-AM, WAAF-FM, WWTM-AM and WEGQ-FM for
approximately $140.0 million. Concurrently, the Company entered into an
agreement to purchase WYUU-FM and WLLD-FM in Tampa for approximately $75.0
million. Subject to receipt of regulatory approval, these transactions are
expected to be consummated in late 1998.

F-50
<PAGE> 140
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Boston: In October, 1998 the Company entered into an agreement to sell
WNFT-AM for approximately $5.0 million. Subject to the receipt of FCC approval,
the transaction is expected to be consummated in the first quarter of 1999.

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of financial instruments has been determined by
the Company using available market information and appropriate valuation
methodologies. However, considerable judgment is required in interpreting data
to develop the estimates of fair value. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts that the Company could
realize in a current market exchange. The fair value estimates presented herein
are based on pertinent information available to management as of December 31,
1996 and 1997. Although management is not aware of any factors that would
significantly affect the estimated fair value amounts, such amounts have not
been comprehensively revalued for purposes of these financial statements since
that date, and current estimates of fair value may differ significantly from the
amounts presented herein. (See Note 1.)

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:

Cash, cash equivalents, accounts receivable, accounts payable, accrued
expenses and other short-term obligations -- These carrying amounts approximate
fair value because of the short-term nature of these financial instruments.

Notes receivable -- The fair value of notes receivable is estimated based
on discounted cash flows using current interest rates at which similar loans to
borrowers with similar credit ratings would be made or if the loan is collateral
dependent, management's estimate of the fair value of the collateral. The
carrying amount of these notes aggregated $69,920,000 and $26,112,000 at
December 31, 1996 and 1997, respectively, and approximated their fair value.

Deposits on station purchases -- The fair value is not practicable to
estimate.

Long-term debt -- The fair values of long-term debt are estimated based on
current market rates and instruments with the same risk and maturities. The fair
value of long-term debt approximated the carrying value at December 31, 1996 and
1997.

Interest rate protection agreements -- The fair values of these agreements
are obtained from dealer quotes. These values represent the estimated amount the
Company would receive or pay to terminate the agreements taking into
consideration the current interest rates. The Company would expect to pay the
fair value of these agreements of approximately $1.5 million and $2.6 million as
of December 31, 1996 and 1997, respectively. (See Note 3.)

F-51
<PAGE> 141
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
1997
Net revenues..................................... $52,952 $ 98,190 $101,759 $104,119
Operating income................................. 2,176 18,391 15,751 19,767
Income (loss) from continuing operations......... (2,667) 2,763 284 (4,467)
Net income (loss) before dividends............... (4,364) 2,421 (324) (7,715)
Basic and diluted loss per share before
extraordinary losses(1)(2)..................... $ (.42) $ (.20) $ (.30) $ (.52)
1996
Net revenues..................................... $23,041 $ 37,231 $ 51,754 $ 63,166
Operating income................................. 1,882 6,862 7,403 11,170
Income (loss) from continuing operations......... (406) 2,274 1,048 2,699
Net income (loss) before dividends............... (456) 2,210 934 2,447
Basic income (loss) per share(1)(2).............. $ (.03) $ .11 $ (.07) $ .00
Diluted income (loss) per share(1)(2)............ $ (.03) $ .10 $ (.07) $ .00
</TABLE>

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

(1) The sum of the quarter's earnings per share does not equal the year-to-date
earnings per share due to changes in average share calculations. (See Note
1).

(2) Income (loss) per share has been retroactively restated to conform to FAS
No. 128. (See Note 1.)

13. SUBSIDIARY GUARANTEES

The Company's payment obligations under the 9.00% Senior Subordinated Notes
("9.00% Notes") and the 9.75% Notes are fully and unconditionally guaranteed on
a joint and several basis (collectively, the "Subsidiary Guarantees"), on a
senior basis (in the case of the 9.75% Notes) and a senior subordinated basis
(in the case of the 9.00% Notes) by all of its present and any future Restricted
Subsidiaries (collectively, "Restricted Guarantors"). The Restricted
Subsidiaries have also unconditionally guaranteed, and any future Restricted
Subsidiaries will be required to guarantee, on a joint and several basis
(collectively, the "Senior Subsidiary Guarantees"), all obligations of the
Company under the 1997 Credit Agreement. The Tower Subsidiary has not guaranteed
obligations under the Credit Agreements or either series of the Senior
Subordinated Notes.

The 9.00% Notes and the Subsidiary Guarantees are subordinated to all
Senior Debt (as defined) of the Company including indebtedness under the 1997
Credit Agreement and the Senior Subsidiary Guarantees and 9.75% Notes related
guarantees. The indenture governing each series of the Senior Subordinated Notes
contains limitations on the amount of indebtedness (including Senior Debt) which
the Company may incur.

With the intent that the Subsidiary Guarantees not constitute fraudulent
transfers or conveyances under applicable state or federal law, the obligation
of each guarantor under its Subsidiary Guarantee is also limited to the maximum
amount as will, after giving effect to any rights to contribution of such
guarantor pursuant to any agreement providing for an equitable contribution
among such guarantor and other affiliates of the Company of payments made by
guarantees by such parties, result in the obligations of such guarantor in
respect of such maximum amount not constituting a fraudulent conveyance.

F-52
<PAGE> 142
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. SUBSIDIARY GUARANTEES -- (CONTINUED)
The following condensed consolidating financial data illustrates the
composition of the combined guarantors. The Company believes that separate
complete financial statements of the respective guarantors would not provide
additional material information which would be useful in assessing the financial
composition of the guarantors. No single guarantor has any significant legal
restrictions on the ability of investors or creditors to obtain access to its
assets in the event of default on the Subsidiary Guarantee, other than in the
case of the 9.00% Notes or its subordination to Senior Debt described above.

Investments in subsidiaries are accounted for by the parent on the equity
method for purposes of the unaudited supplemental consolidating presentation.
Earnings (losses) of subsidiaries are therefore reflected in the parent's
investment accounts and earnings. The principal elimination entries eliminate
investments in subsidiaries and intercompany balances and transactions.

For purposes of FAS No. 14, "Financial Reporting for Segments of a Business
Enterprise," the Company's radio segment consists of the Parent, its Divisions
and the Guarantor Subsidiaries. The Company's tower segment consists of the
Non-Guarantor Subsidiary.

F-53
<PAGE> 143
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. SUBSIDIARY GUARANTEES -- (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 1997

<TABLE>
<CAPTION>
PARENT AND GUARANTOR NON-GUARANTOR CONSOLIDATED
ITS DIVISIONS SUBSIDIARIES SUBSIDIARY ELIMINATIONS TOTALS
------------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents............. $ 10,470 $ 1,578 $ 12,048
Accounts receivable, net... 52,130 35,099 87,229
Prepaid expenses and other
assets.................. 5,615 998 6,613
Deferred income taxes...... 4,006 2,359 6,365
---------- ---------- -------- ----------- ----------
Total current
assets........... 72,221 40,034 112,255
---------- ---------- -------- ----------- ----------
PROPERTY AND EQUIPMENT,
NET........................ 86,054 46,517 132,571
---------- ---------- -------- ----------- ----------
OTHER ASSETS:
Restricted cash............ 22,141 22,141
Investment in and advances
to subsidiaries......... 1,164,380 $(1,164,380) 0
Investment notes
receivable.............. 25,497 615 26,112
Goodwill -- net............ 333,002 20,895 353,897
FCC licenses -- net........ 1 1,112,272 1,112,273
Other intangible
assets -- net........... 28,301 2,159 30,460
Deposits and other
long-term assets........ 9,140 9,140
Net assets of discontinued
operations.............. $153,207 153,207
---------- ---------- -------- ----------- ----------
Total other
assets........... 1,582,462 1,135,941 153,207 (1,164,380) 1,707,230
---------- ---------- -------- ----------- ----------
TOTAL........................ $1,740,737 $1,222,492 $153,207 $(1,164,380) $1,952,056
========== ========== ======== =========== ==========
</TABLE>

F-54
<PAGE> 144
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. SUBSIDIARY GUARANTEES -- (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 1997

<TABLE>
<CAPTION>
PARENT AND GUARANTOR NON-GUARANTOR CONSOLIDATED
ITS DIVISIONS SUBSIDIARIES SUBSIDIARY ELIMINATIONS TOTALS
------------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of
long-term debt....... $ 340 $ 340
Accounts payable and
accrued expenses..... 11,729 $ 25,403 37,132
------------- ------------ -------- ------------ ----------
Total current
liabilities... 12,069 25,403 37,472
------------- ------------ -------- ------------ ----------
NONCURRENT LIABILITIES:
Deferred income taxes... 9,740 185,870 195,610
Other long-term
liabilities.......... 8,875 46 8,921
Long-term debt.......... 833,638 833,638
------------- ------------ -------- ------------ ----------
Total noncurrent
liabilities... 852,253 185,916 1,038,169
------------- ------------ -------- ------------ ----------
REDEEMABLE PREFERRED
STOCK................... 215,550 215,550
------------- ------------ -------- ------------ ----------
STOCKHOLDERS' EQUITY:
Preferred stock......... 1 1
Common stock............ 295 $ 356 $ (356) 295
Additional paid-in
capital.............. 671,211 1,002,769 155,711 (1,158,480) 671,211
Unearned compensation... (202) (202)
Retained earnings
(accumulated
deficit)............. (9,982) 8,404 (2,860) (5,544) (9,982)
Treasury stock.......... (458) (458)
------------- ------------ -------- ------------ ----------
Total
stockholders'
equity........ 660,865 1,011,173 153,207 (1,164,380) 660,865
------------- ------------ -------- ------------ ----------
TOTAL..................... $ 1,740,737 $ 1,222,492 $153,207 $ (1,164,380) $1,952,056
============= ============ ======== ============ ==========
</TABLE>

F-55
<PAGE> 145
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. SUBSIDIARY GUARANTEES -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
PARENT AND
ITS GUARANTOR NON-GUARANTOR CONSOLIDATED
DIVISIONS SUBSIDIARIES SUBSIDIARY ELIMINATIONS TOTALS
---------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net revenues..................... $231,438 $125,582 $357,020
License fees charged to Parent... (17,320) 17,320 0
-------- -------- ------- ------- --------
TOTAL NET REVENUES..... 214,118 142,902 357,020
OPERATING EXPENSES:
Operating expenses excluding
depreciation and
amortization, net local
marketing agreement and
corporate general and
administrative expenses..... 156,524 75,473 231,997
Net local marketing agreement
expenses.................... 1,590 724 2,314
Depreciation and
amortization................ 17,924 40,493 58,417
Corporate general and
administrative.............. 8,207 8,207
-------- -------- ------- ------- --------
OPERATING INCOME................. 29,873 26,212 56,085
OTHER INCOME (EXPENSE):
Interest expense............... (56,710) (56,710)
Interest income and other,
net......................... 2,114 2,114
Losses on sale of assets and
other, net.................. (5,519) (1) (5,520)
Equity in income of
subsidiaries................ 7,796 $(7,796) 0
-------- -------- ------- ------- --------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME
TAXES.......................... (22,446) 26,211 (7,796) (4,031)
INCOME TAX (PROVISION) BENEFIT... 18,359 (18,415) (56)
-------- -------- ------- ------- --------
INCOME (LOSS) FROM CONTINUING
OPERATIONS..................... (4,087) 7,796 (7,796) (4,087)
LOSS FROM DISCONTINUED
OPERATIONS..................... (4,256) $(2,270) 2,270 (4,256)
EXTRAORDINARY LOSS ON
EXTINGUISHMENT OF DEBT -- NET
OF TAX BENEFIT................. (1,639) (1,639)
-------- -------- ------- ------- --------
NET INCOME (LOSS)................ $ (9,982) $ 7,796 $(2,270) $(5,526) $ (9,982)
======== ======== ======= ======= ========
</TABLE>

F-56
<PAGE> 146
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. SUBSIDIARY GUARANTEES -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
PARENT AND GUARANTOR NON-GUARANTOR CONSOLIDATED
ITS DIVISIONS SUBSIDIARIES SUBSIDIARY TOTALS
------------- ------------ ------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
CASH FLOWS PROVIDED BY (USED FOR) OPERATING
ACTIVITIES:
Continuing operations......................... $(11,678) $46,930 $ 35,252
Discontinued operations....................... (1,579) $ 9,635 8,056
-------- ------- --------- ---------
Cash flows provided by (used for) operating
activities.................................... (13,257) 46,930 9,635 43,308
-------- ------- --------- ---------
INVESTING ACTIVITIES:
Payments for purchase of property, equipment
and intangible assets....................... (22,664) (22,664)
Proceeds from asset and radio station sales... 86,551 86,551
Repayment of investment note receivables...... 1,243 1,243
Payments for purchase of radio stations....... (500,824) (500,824)
Payments for investment notes receivable and
related intangible assets................... (410) (410)
Deposits and other long-term assets........... 7,537 7,537
-------- ------- --------- ---------
Continuing operations......................... (428,567) (428,567)
Discontinued operations....................... 0 (216,506) (216,506)
-------- ------- --------- ---------
Cash flows used for investing activities...... (428,567) (216,506) (645,073)
-------- ------- --------- ---------
FINANCING ACTIVITIES:
Borrowings under the Credit Agreements........ 639,500 639,500
Repayments under the Credit Agreements........ (286,000) (286,000)
Borrowing under other obligations............. 750 750
Repayments under other obligations............ (868) (868)
Additions to deferred financing costs......... (5,642) (5,642)
Dividends paid................................ (15,613) (15,613)
Net proceeds from equity offerings and
options..................................... 193,165 193,165
Investment in and advances to subsidiaries.... 45,352 (45,352)
-------- ------- --------- ---------
Continuing operations......................... 570,644 (45,352) 525,292
Discontinued operations....................... (126,424) 209,093 82,669
-------- ------- --------- ---------
Cash flows from (used for) financing
activities.................................. 444,220 (45,352) 209,093 607,961
-------- ------- --------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS......... 2,396 1,578 2,222 6,196
CHANGE IN CASH AND CASH EQUIVALENTS INCLUDED
IN DISCONTINUED OPERATIONS.................. (2,222) (2,222)
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR........................................ 8,074 8,074
-------- ------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR........ $ 10,470 $ 1,578 $ 0 $ 12,048
======== ======= ========= =========
</TABLE>

F-57
<PAGE> 147
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. SUBSIDIARY GUARANTEES -- (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 1996

<TABLE>
<CAPTION>
PARENT AND GUARANTOR NON-GUARANTOR CONSOLIDATED
ITS DIVISIONS SUBSIDIARIES SUBSIDIARY ELIMINATIONS TOTALS
------------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents............. $ 8,074 $ 8,074
Accounts receivable, net... 49,565 $ 2,095 51,660
Prepaid expenses and other
assets.................. 3,509 14 3,523
Deferred income taxes...... 3,202 168 3,370
-------- -------- ------- --------- --------
Total current
assets........... 64,350 2,277 66,627
-------- -------- ------- --------- --------
PROPERTY AND EQUIPMENT,
NET........................ 67,267 3,271 70,538
-------- -------- ------- --------- --------
OTHER ASSETS:
Investment in and advances
to subsidiaries......... 314,983 $(314,983) 0
Investment notes
receivable.............. 69,920 69,920
Goodwill -- net............ 201,208 20,457 221,665
FCC licenses -- net........ 233,558 233,558
Other intangible
assets -- net........... 23,419 327 23,746
Deposits and other
long-term assets........ 25,589 48 25,637
Net assets held under
exchange agreement...... 47,495 47,495
Net assets of discontinued
operations.............. $29,727 29,727
-------- -------- ------- --------- --------
Total other
assets........... 635,119 301,885 29,727 (314,983) 651,748
-------- -------- ------- --------- --------
TOTAL........................ $766,736 $307,433 $29,727 $(314,983) $788,913
======== ======== ======= ========= ========
</TABLE>

F-58
<PAGE> 148
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. SUBSIDIARY GUARANTEES -- (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 1996

<TABLE>
<CAPTION>
PARENT AND GUARANTOR NON-GUARANTOR CONSOLIDATED
ITS DIVISIONS SUBSIDIARIES SUBSIDIARY ELIMINATIONS TOTALS
------------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-
term debt............... $ 444 $ $ 444
Accounts payable and
accrued expenses........ 31,087 $ 656 31,743
-------- -------- ------- --------- --------
Total current
liabilities...... 31,531 656 32,187
-------- -------- ------- --------- --------
NONCURRENT LIABILITIES:
Deferred income taxes...... 11,405 21,521 32,926
Other long-term
liabilities............. 1,944 1,944
Long-term debt............. 325,693 325,693
-------- -------- ------- --------- --------
Total noncurrent
liabilities...... 339,042 21,521 360,563
-------- -------- ------- --------- --------
STOCKHOLDERS' EQUITY:
Preferred stock............ 1 1
Common stock............... 211 500 $ (500) 211
Additional paid-in
capital................. 390,731 284,649 29,817 (314,466) 390,731
Unearned compensation...... (297) (297)
Retained earnings.......... 5,955 607 (590) (17) 5,955
Treasury stock............. (438) (438)
-------- -------- ------- --------- --------
Total stockholders'
equity........... 396,163 285,256 29,727 (314,983) 396,163
-------- -------- ------- --------- --------
TOTAL........................ $766,736 $307,433 $29,727 $(314,983) $788,913
======== ======== ======= ========= ========
</TABLE>

F-59
<PAGE> 149
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. SUBSIDIARY GUARANTEES -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
PARENT AND GUARANTOR NON-GUARANTOR CONSOLIDATED
ITS DIVISIONS SUBSIDIARIES SUBSIDIARY ELIMINATIONS TOTALS
------------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net revenues................. $170,940 $4,252 $175,192
License fees charged to
Parent..................... (7,655) 7,655
-------- ------ ------ ----- --------
TOTAL NET REVENUES........... 163,285 11,907 175,192
OPERATING EXPENSES:
Operating expenses
excluding depreciation
and amortization, net
local marketing
agreement and corporate
general and
administrative
expenses................ 115,219 2,662 117,881
Net local marketing
agreement expenses...... 10,461 (2,333) 8,128
Depreciation and
amortization............ 9,873 6,947 16,820
Corporate general and
administrative.......... 5,046 5,046
-------- ------ ------ ----- --------
OPERATING INCOME............. 22,686 4,631 27,317
OTHER INCOME (EXPENSE):
Interest expense........... (22,287) (22,287)
Interest income and other,
net..................... 5,489 5,489
Losses on sale of assets
and other, net.......... (123) (123)
Equity in income of
subsidiaries............ 607 (607)
-------- ------ ------ ----- --------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME
TAXES...................... 6,372 4,631 (607) 10,396
-------- ------ ------ ----- --------
INCOME TAX PROVISION......... (757) (4,024) (4,781)
-------- ------ ------ ----- --------
INCOME FROM CONTINUING
OPERATIONS................. 5,615 607 (607) 5,615
LOSS FROM DISCONTINUED
OPERATIONS................. (480) (480) 480 (480)
-------- ------ ------ ----- --------
NET INCOME (LOSS)............ $ 5,135 $ 607 $ (480) $(127) $ 5,135
======== ====== ====== ===== ========
</TABLE>

F-60
<PAGE> 150
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. SUBSIDIARY GUARANTEES -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
PARENT AND GUARANTOR NON-GUARANTOR CONSOLIDATED
ITS DIVISIONS SUBSIDIARIES SUBSIDIARY TOTALS
------------- ------------ ------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES:
Continuing operations.................. $ 8,323 $5,292 $ 13,615
Discontinued operations................ (185) -- $ 2,229 2,044
--------- ------ -------- ---------
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES............................. 8,138 5,292 2,229 15,659
--------- ------ -------- ---------
INVESTING ACTIVITIES:
Payments for purchase of property,
equipment and intangible assets..... (15,782) (15,782)
Proceeds from asset and radio station
sales............................... 1,087 1,087
Repayment of investment notes
receivable.......................... 1,350 1,350
Payments for purchase of radio
stations............................ (312,591) (312,591)
Payments for investment notes
receivable and related intangible
assets.............................. (56,522) (56,522)
Deposits and other long-term assets.... (20,303) (20,303)
--------- ------ -------- ---------
Continuing operations.................. (402,761) (402,761)
Discontinued operations................ (19,124) (19,124)
--------- ------ -------- ---------
Cash flows used for investing
activities................... (402,761) (19,124) (421,885)
--------- ------ -------- ---------
FINANCING ACTIVITIES:
Borrowings under the Credit
Agreements.......................... 151,500 151,500
Repayments under the Credit
Agreements.......................... (151,500) (151,500)
Repayments under other obligations..... (403) (403)
Net proceeds from debt offering -- net
of discount......................... 173,581 173,581
Additions to deferred financing
costs............................... (5,344) (5,344)
Dividends paid......................... (4,973) (4,973)
Net proceeds from equity offerings and
options............................. 247,474 247,474
Investment in and advances to
subsidiaries........................ 5,292 (5,292) 0
--------- ------ -------- ---------
Continuing operations.................. 415,627 (5,292) 410,335
Discontinued operations................ (16,807) 19,256 2,449
--------- ------ -------- ---------
Cash flows from (used for)
financing activities......... 398,820 (5,292) 19,256 412,784
--------- ------ -------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS.... 4,197 2,361 6,558
CHANGE IN CASH AND CASH EQUIVALENTS
INCLUDED IN DISCONTINUED OPERATIONS.... (2,361) (2,361)
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR................................... 3,877 0 3,877
--------- ------ -------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR... $ 8,074 $ 0 $ 0 $ 8,074
========= ====== ======== =========
</TABLE>

F-61
<PAGE> 151
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. SUBSIDIARY GUARANTEES -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
NON-
PARENT AND GUARANTOR GUARANTOR CONSOLIDATED
ITS DIVISIONS SUBSIDIARIES SUBSIDIARY ELIMINATIONS TOTALS
------------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net revenues..................... $97,609 $97,609
License fees charged to Parent... (484) $484 0
------- ---- ----- ---- -------
NET REVENUES..................... 97,125 484 97,609
OPERATING EXPENSES:
Operating expenses excluding
depreciation and
amortization, net local
marketing agreement and
corporate general and
administrative expenses..... 66,148 10 66,158
Net local marketing agreement
expenses.................... 600 600
Depreciation and
amortization................ 11,833 474 12,307
Corporate general and
administrative.............. 3,908 3,908
------- ---- ----- ---- -------
OPERATING INCOME................. 14,636 0 14,636
OTHER INCOME (EXPENSE):
Interest expense............... (12,497) (12,497)
Interest income and other,
net......................... 2,435 2,435
Gains on sale of assets and
other, net.................. 11,544 11,544
------- ---- ----- ---- -------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES............ 16,118 16,118
INCOME TAX PROVISION............. (6,903) (6,903)
------- ---- ----- ---- -------
INCOME FROM CONTINUING
OPERATIONS..................... 9,215 9,215
LOSS FROM DISCONTINUED
OPERATIONS..................... (110) $(110) $110 (110)
EXTRAORDINARY LOSS ON
EXTINGUISHMENT OF DEBT......... (817) (817)
------- ---- ----- ---- -------
NET INCOME (LOSS)................ $ 8,288 $ 0 $(110) $110 $ 8,288
======= ==== ===== ==== =======
</TABLE>

F-62
<PAGE> 152
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. SUBSIDIARY GUARANTEES -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
PARENT AND GUARANTOR NON-GUARANTOR CONSOLIDATED
ITS DIVISIONS SUBSIDIARIES SUBSIDIARY TOTALS
------------- ------------ ------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES:
Continuing operations.................. $ 9,577 $ 9,577
--------- ---------
Discontinued operations................ $ 147 147
--------- ---- ------- ---------
Cash flows provided by
operating activities......... 9,577 147 9,724
--------- ---- ------- ---------
INVESTING ACTIVITIES:
Payments for purchase of property,
equipment and intangible assets..... (5,926) (5,926)
Proceeds from asset and radio station
sales............................... 15,302 15,302
Payments for purchase of radio
stations............................ (31,013) (31,013)
Payment for investment notes receivable
and related intangible assets....... (48,597) (48,597)
Repayments of investment notes
receivable.......................... 3,000 3,000
Deposits and other long-term assets.... (6,649) (6,649)
--------- ---- ------- ---------
Continuing operations.................. (73,883) (73,883)
--------- ---- ------- ---------
Discontinued operations................ (3,218) (4,082) (7,300)
--------- ---- ------- ---------
Cash flows used for investing
activities................... (77,101) (4,082) (81,183)
--------- ---- ------- ---------
FINANCING ACTIVITIES:
Borrowings under the Credit
Agreements.......................... 225,000 225,000
Repayments under the Credit
Agreements.......................... (202,500) (202,500)
Repayments under other obligations..... (1,288) (1,288)
Additions to deferred financing
costs............................... (3,896) (3,896)
Redemption of Series C Common Stock.... (14,580) (14,580)
Purchase of treasury stock............. (438) (438)
Net proceeds from equity offering and
exercise of options................. 69,882 69,882
--------- ---- ------- ---------
Continuing operations.................. 72,180 72,180
--------- ---- ------- ---------
Discontinued operations................ (3,947) 3,947 0
--------- ---- ------- ---------
Cash flows from financing
activities................... 68,233 3,947 72,180
--------- ---- ------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS.... 709 12 721
CHANGE IN CASH AND CASH EQUIVALENTS
INCLUDED IN DISCONTINUED OPERATIONS.... (12) (12)
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR................................... 3,168 3,168
--------- ---- ------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR... $ 3,877 $ 0 $ 0 $ 3,877
========= ==== ======= =========
</TABLE>

F-63
<PAGE> 153
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSEQUENT EVENTS

Radio Transactions

Dayton and Kansas City: In January 1998, the Company consummated an
agreement to exchange WXEG-FM, WBTT-FM, WLQT-FM, WMMX-FM, WTUE-FM and WONE-AM
serving Dayton for WDAF-AM, KOZN-FM (formerly KYYS-FM), KMXV-FM and KUDL-FM
serving Kansas City. The Company began programming and marketing KYYS-FM and
KMXV-FM pursuant to an LMA agreement in September 1997.

Kansas City, Sacramento and St. Louis: In January 1998, the Company
acquired KLOU-FM in St. Louis in exchange for KUDL-FM and WDAF-AM in Kansas City
and approximately $7.0 million. The Company also consummated a related agreement
with the same party, pursuant to which the Company sold KCTC-AM serving
Sacramento for approximately $4.0 million.

Riverside/San Bernardino and Sun City: In March 1998, the Company acquired
KFRG-FM, serving the Riverside/San Bernardino market, and KXFG-FM, serving Sun
City, California, for approximately $60.0 million. The Company began programming
and marketing the stations pursuant to an LMA agreement in August 1997.

Portsmouth: In August 1998, the Company sold the assets of WQSO-FM and
WZNN-AM serving Rochester, New Hampshire and WERZ-FM and WMYF-AM, serving
Exeter, New Hampshire for approximately $6.0 million.

Portland, Sacramento, San Francisco and San Jose: In May 1998, the Company
consummated an asset exchange agreement pursuant to which it will acquire
KINK-FM, serving Portland, Oregon, KUFX-FM (formerly KBRG-FM), serving
Fremont/San Francisco, California, $2.0 million in a promissory note due
September 30, 1998, or at the time of certain earlier events, and 150,000 shares
of common stock of Latin Communications, Inc., in exchange for KBRG-FM (formerly
KBAY-FM), serving San Jose, and KRRE-FM (formerly KSSJ-FM), serving Sacramento.
The Company began programming and marketing KINK-FM and KRRE-FM pursuant to an
LMA agreement in January 1998. Concurrently, the purchase of KBRG-FM began
programming and marketing KBRG-FM pursuant to the LMA.

Sacramento: In September 1998, the Company consummated an asset exchange
agreement pursuant to which the Company's KRAK-FM exchanged FCC frequencies with
another radio station also located in the Sacramento market for approximately
$4.4 million.

San Jose and Monterey: In May 1998, the Company consummated a merger
agreement pursuant to which the Company acquired the assets of KEZR-FM serving
San Jose, California and KLUE-FM serving Monterey, California in exchange for
approximately 723,000 shares of Class A Common Stock valued at approximately
$20.0 million and $4.0 million in cash.

San Jose: In August 1998, the Company consummated the sale of KSJO-FM for
approximately $30.0 million.

St. Louis: In July 1998, the Company sold the assets of KFNS-AM serving the
St. Louis, Missouri market for approximately $3.8 million.

Temple: In June 1998, the Company acquired radio station KKIK-FM, licensed
to Temple, Texas (in the Austin area) for approximately $3.7 million.

F-64
<PAGE> 154
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSEQUENT EVENTS -- (CONTINUED)
West Palm Beach: In July 1997, the Company entered into an agreement to
acquire WTPX-FM for approximately $11.0 million. The Company began programming
and marketing the station pursuant to an LMA in June 1997. In October 1997, the
Company entered into an agreement to terminate these agreements. In May 1998,
the WTPX-FM termination agreement was consummated and a third party acquired
WTPX-FM from the Company pursuant to which the Company received the net proceeds
of certain investment notes.

In July 1998, the Company sold WEAT-AM serving West Palm Beach, Florida for
approximately $1.5 million.

Columbus, St. Louis, Baltimore and San Jose: In August of 1998 the Company
acquired WHOK-FM, WLVQ-FM and WAZU-FM in Columbus in exchange for KSD-FM and
KLOU-FM in St. Louis, WOCT-FM in Baltimore and KUFX-FM in San Jose.

Tower Separation

The Separation Agreement requires Tower to reimburse the Company on a
"make-whole" (after tax) basis for the tax liabilities incurred by the Company
attributable to the Distribution and certain related transactions to the extent
that the aggregate liability exceeds $20.0 million (the "Tower Liability"). The
amount of that tax liability was dependent on the "fair market value" of the
common stock of Tower at the time of the consummation of the CBS merger. Tower
received an appraisal from an independent appraisal firm that the "fair market
value" of Tower's common stock was equal to $17.25 per share. Based on such
appraisal, CBS paid estimated taxes of approximately $212.0 million with respect
to the Tower Liability for which CBS was reimbursed by Tower. As required by the
Separation Agreement, Tower provided CBS with security of $9.8 million in cash
(which may be replaced at Tower's option with a letter of credit reasonably
satisfactory to CBS) in connection with the filing of estimated tax returns
based on such appraisal. Such appraisal is not, of course, binding on the
Internal Revenue Service or other taxing authorities. Tower's reimbursement
obligation with respect to such taxes would change by approximately $21.0
million for each $1.00 change in the "fair market value" of Tower's common stock
from the value reported for tax purposes. The average of the high and low
trading prices of Tower's common stock in the when-issued over-the-counter
market on June 4, 1998 was $20.50.

The $212.0 million payment did not include all the taxes payable with
respect to merger consideration that has or will be paid upon conversion of the
Convertible Exchangeable Preferred Stock; such taxes will be based on the "fair
market value" of Tower common stock at the time of conversion. Conversions have
occurred at various times since June 4, 1998. Tower's reimbursement obligation
associated with such conversions is expected to approximate $22.7 million, of
which Tower has already paid approximately $8.5 million, assuming that the fair
market value of Tower's common stock distributed by CBS on the date of
conversion is $20.375 per share, which was the closing price of Tower's common
stock as traded on the New York Stock Exchange on November 3, 1998. Tower's
reimbursement obligation with respect to such taxes would change by
approximately $1.15 million for each $1.00 change in the fair market value of
Tower's common stock from the assumed value.

The Merger Agreement also provides for closing date balance sheet
adjustments based upon the working capital and specified debt levels (including
the liquidation preference of the ARS Cumulative Preferred Stock) of ARS at the
effective time of the CBS Merger which may result in payments to be made by
either

F-65
<PAGE> 155
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSEQUENT EVENTS -- (CONTINUED)
ARS or ATS to the other party following the closing date of the CBS Merger. ATS
will benefit from or bear the cost of such adjustments.

Debt and Equity Securities.

In connection with the CBS Merger, all classes of American Radio common
stock were retired and 1,000 shares of a new common stock were issued with a par
value of $.01 per share. Below is summarized activity in the Company's debt and
preferred equity securities subsequent to the CBS Merger.

Credit Agreement -- The outstanding balance of this security was repaid
using the proceeds from the Junior Preferred Stock issued in conjunction with
the CBS Merger.

Senior Subordinated Notes -- In July 1998, $7.6 million of the outstanding
principal was redeemed at a price equal to 101% of the principal pursuant to an
offer to purchase in connection with the CBS Merger.

11 3/8 Cumulative Exchangeable Preferred Stock -- On July 15, 1998, the
outstanding shares of 11 3/8 Subordinated Exchange Debentures were exchanged
into 11 3/8% Subordinated Exchange Debentures due January 15, 2009. Interest is
payable semi-annually each January 15 and July 15.

7% Convertible Exchangeable Preferred Stock -- On September 30, 1998 the
outstanding shares of 7% Convertible Exchangeable Preferred Stock were exchanged
into 7% Convertible Subordinated Debentures due June 30, 2011 at the rate of
$1,000 principal amount of 7% Debentures for each share of Convertible Preferred
Stock. Interest is payable quarterly on each March 31, June 30, September 30 and
December 31. These debentures are unsecured obligations of the Company and are
subordinated in right of payment to all existing and future senior indebtedness.
Prior to the CBS Merger these securities were convertible at the option of the
holder at any time into ARS common stock. Subsequent to the CBS Merger these
securities are convertible at the option of the holder into merger consideration
consisting of cash and shares of Tower common stock. During the third quarter of
1998, 58,823 shares were redeemed at a cost of $60.9 million.

The Convertible Preferred Stock is redeemable, in whole or in part, at the
option of American Radio, for cash at any time after July 15, 1999, initially at
$1,049 per share ($52.45 per Depositary Share), declining ratably to $1,000 per
share immediately after July 15, 2006, plus accrued and unpaid dividends. The
Convertible Preferred Stock is exchangeable at the option of ARS for 7%
Convertible Subordinated Debentures due 2011 (the 7% Debentures) at a rate of
$1,000 principal amount of 7% Debentures for each share of Convertible Preferred
Stock ($50 principal amount for each Depositary Share.) On August 31, 1998 the
holders of the Convertible Preferred Stock were given notice that these
securities will be converted into 7% Debentures as of September 30, 1998.

Dividends on the Convertible Preferred Stock are cumulative at an annual
rate of 7% (equivalent to $3.50 per Depositary Share), accruing from the date of
original issuance (June 25, 1995) and are payable quarterly in arrears on March
31, June 30, September 30 and December 31, commencing September 30, 1996. The
ability of ARS to pay dividends is restricted under the terms of the 9% Notes
and the 9 3/4% Notes and is prohibited during the existence of a default under
the indentures.

Junior Preferred Securities -- On June 4, 1998, the Company issued 567,000
shares of Junior Preferred Stock with a par value of $0.01 per share and a
liquidation preference value of $1,000 per share. These shares have voting
rights only in special circumstances and the dividends are payable only if and
when declared by the Board of Directors. These securities are subordinate to the
Company's previously outstanding preferred stock. The proceeds from the issuance
of these securities, which totaled $567.0 million, were used to pay off
F-66
<PAGE> 156
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSEQUENT EVENTS -- (CONTINUED)
the outstanding balance and accrued interest under the Company's Revolving
Credit Agreement. In July 1998, the number of shares authorized was increased to
one million. As of September 30, 1998, 68,828 additional shares were issued. The
proceeds from the issuance of these securities, totaling $68.8 million, were
used to redeem the Senior Subordinated Notes and 7% Convertible Exchangeable
Preferred Stock.

Securities held by CBS -- As of September 30, 1998 CBS had purchased and
continues to hold $6.0 million of Senior Subordinated Notes and $16.9 million of
the 11 3/8% Subordinated Exchange Debentures.

F-67
<PAGE> 157

CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, 1997 MARCH 31, 1998
----------------- --------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 12,048 $ 6,198
Accounts receivable (less allowance for doubtful accounts
of $7,578 in 1997 and $7,846 in 1998).................. 87,229 73,211
Prepaid expenses and other assets......................... 4,363 7,629
Current portion of investment notes receivable (less
valuation allowance of $6,750 in 1997 and 1998)........ 2,250 2,250
Deferred income taxes..................................... 6,365 6,365
---------- ----------
Total current assets.............................. 112,255 95,653
---------- ----------
PROPERTY AND EQUIPMENT -- NET............................... 132,571 121,492
---------- ----------
OTHER ASSETS:
Restricted cash........................................... 22,141
Investment notes receivable............................... 26,112 26,108
Intangible Assets, net
Goodwill............................................... 353,897 351,634
FCC licenses........................................... 1,112,273 1,171,196
Other intangible assets................................ 30,460 28,577
Deposits and other long-term assets....................... 9,140 3,186
Net assets of discontinued operations..................... 153,207 155,710
---------- ----------
Total other assets................................ 1,707,230 1,736,411
---------- ----------
TOTAL....................................................... $1,952,056 $1,953,556
========== ==========
</TABLE>

See notes to Unaudited Condensed Consolidated Financial Statements
F-68
<PAGE> 158

CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, 1997 MARCH 31, 1998
----------------- --------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturities of long-term debt...................... $ 340 $ 282
Accounts payable.......................................... 5,949 4,759
Accrued compensation...................................... 1,704 3,391
Accrued expenses.......................................... 16,216 17,914
Accrued interest.......................................... 13,263 9,267
Income taxes payable...................................... -- 564
---------- ----------
Total current liabilities......................... 37,472 36,177
---------- ----------
DEFERRED INCOME TAXES....................................... 195,610 186,237
---------- ----------
OTHER LONG-TERM LIABILITIES................................. 8,921 8,546
---------- ----------
LONG-TERM DEBT.............................................. 833,638 863,361
---------- ----------
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED STOCK:
Cumulative Exchangeable Preferred Stock, $0.01 par value;
10,000,000 shares authorized; 2,105,602 shares issued
and outstanding; liquidation preference $100 per
share.................................................. 215,550 215,550
---------- ----------
STOCKHOLDERS' EQUITY:
Preferred Stock; $0.01 par value; 10,000,000 shares
authorized:
Convertible Exchangeable Preferred Stock; 137,500
shares issued and outstanding (represented by
2,750,000 depositary shares); liquidation preference
$1,000 per share..................................... 1 1
Class A Common Stock; $.01 par value; 100,000,000 shares
authorized; 24,708,096 and 24,746,510 shares issued and
outstanding, respectively.............................. 247 247
Class B Common Stock; $.01 par value; 15,000,000 shares
authorized; 3,508,639 and 3,494,325 shares issued and
outstanding, respectively.............................. 35 35
Class C Common Stock; $.01 par value; 6,000,000 shares
authorized; 1,295,518 shares issued and outstanding.... 13 13
Additional paid-in capital................................ 671,211 663,036
Unearned compensation..................................... (202) (178)
Accumulated deficit....................................... (9,982) (19,011)
---------- ----------
Total............................................. 661,323 644,143
Less:
Treasury stock, at cost, 19,019 shares................. (458) (458)
---------- ----------
Total stockholders' equity........................ 660,865 643,685
---------- ----------
TOTAL....................................................... $1,952,056 $1,953,556
========== ==========
</TABLE>

See notes to Unaudited Condensed Consolidated Financial Statements
F-69
<PAGE> 159

CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------
1997 1998
----------- -----------
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
<S> <C> <C>
NET REVENUES................................................ $ 52,952 $ 88,593
-------- --------
OPERATING EXPENSES:
Operating expenses excluding depreciation and
amortization, net local marketing agreement and
corporate general and administrative expenses.......... 40,147 65,351
Net local marketing agreement expenses.................... 1,932 709
Depreciation and amortization............................. 6,920 18,018
Corporate general and administrative...................... 1,777 1,905
-------- --------
Total expenses.................................... 50,776 85,983
-------- --------
OPERATING INCOME............................................ 2,176 2,610
-------- --------
OTHER INCOME (EXPENSE):
Interest expense.......................................... (7,408) (16,583)
Interest income........................................... 631 330
Gains on sale of assets and other, net.................... 298 340
-------- --------
Total other (expense)............................. (6,479) (15,913)
-------- --------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES....... (4,303) (13,303)
INCOME TAX BENEFIT.......................................... 1,636 9,372
-------- --------
LOSS FROM CONTINUING OPERATIONS............................. (2,667) (3,931)
Loss from discontinued operations, net of income taxes...... (58) (5,099)
Extraordinary loss on extinguishment of debt, net of income
tax benefit of $1,013 in 1997............................. (1,639)
-------- --------
NET LOSS.................................................... (4,364) (9,030)
PREFERRED STOCK DIVIDENDS................................... (6,198) (8,394)
-------- --------
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS.................. $(10,562) $(17,424)
======== ========
BASIC AND DILUTED PER COMMON SHARE AMOUNTS:
Continuing operations..................................... $ (.42) $ (.42)
Discontinued operations................................... (.17)
Extraordinary loss........................................ (.08)
-------- --------
Net loss.................................................. $ (.50) $ (.59)
======== ========
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING........................................ 21,095 29,533
======== ========
</TABLE>

See notes to Unaudited Condensed Consolidated Financial Statements
F-70
<PAGE> 160

CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1997 1998
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
CASH FLOWS FROM (USED FOR) OPERATING ACTIVITIES:
Continuing operations..................................... $ (1,878) $ 12,689
Discontinued operations................................... 291 (1,738)
CASH FLOWS FROM (USED FOR) OPERATING ACTIVITIES............. (1,587) 10,951
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property, equipment and
intangible assets...................................... (5,395) (2,994)
Proceeds from radio station sales......................... 20,403 3,952
Payments for radio station acquisitions................... (262,863) (42,153)
Issuance of investment notes receivable................... (375)
Repayment of investment note receivable................... 1,243 4
Deposits and other long-term assets....................... 16,407 (79)
--------- ---------
Continuing operations..................................... (230,580) (41,270)
Discontinued operations................................... (2,697) (91,835)
--------- ---------
Cash used for investing activities................ (233,277) (133,105)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under Credit Agreements and other.............. 276,500 30,000
Repayments under Credit Agreements........................ (230,000)
Repayments of other obligations........................... (245) (208)
Net proceeds from equity offerings and options............ 160 219
Net proceeds from exchangeable preferred stock offering... 192,350
Additions to deferred financing costs..................... (5,526)
Dividends paid............................................ (2,406) (8,394)
--------- ---------
Continuing operations..................................... 230,833 21,617
Discontinued operations................................... (134) 96,891
--------- ---------
Cash provided by financing activities............. 230,699 118,508
--------- ---------
DECREASE IN CASH AND CASH EQUIVALENTS....................... (4,165) (3,646)
Change in cash and cash equivalents included in
discontinued operations................................ 720 (2,204)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.............. 8,074 12,048
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD.................... $ 4,629 $ 6,198
========= =========
</TABLE>

See notes to Unaudited Condensed Consolidated Financial Statements.
F-71
<PAGE> 161

CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The financial statements included herein have been prepared by CBS Radio,
Inc. (formerly American Radio Systems Corporation) and subsidiaries
(collectively, "American Radio," "ARS" or the "Company"), without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission
(the Commission). Although certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, the Company believes that the disclosures are adequate to make the
information presented not misleading and reflect all adjustments (consisting
only of normal recurring adjustments) which are necessary for a fair
presentation of results of operations for such periods. Results of interim
periods may not be indicative of results for the full year. These financial
statements should be read in conjunction with the consolidated financial
statements for the year ended December 31, 1997 and the notes thereto included
in the Company's audited consolidated financial statements included elsewhere in
this Registration Statement.

On June 4, 1998 the merger of ARS and a subsidiary of CBS Corporation (the
CBS Merger) was consummated. In connection with the merger, all of the shares of
American Tower Systems Corporation (Tower) owned by ARS were distributed (the
Distribution) to ARS common stockholders and holders of options to acquire ARS
common stock and have been or will be distributed upon conversion of shares of
ARS 7% Convertible Exchangeable Preferred Stock (or the debentures into which
they are exchangeable). As a consequence of the Distribution, Tower ceased to be
a subsidiary of, or to be otherwise affiliated with, ARS and now operates as an
independent publicly traded company. Consequently, the results of operations and
net assets of Tower have been classified as Discontinued Operations in
accordance with Accounting Principles Board Opinion No. 30, "Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business and Extraordinary, Unusual, and Infrequently Occurring Events and
Transactions," for all periods presented. Net revenues for discontinued
operations for the three months ended March 31, 1997 and 1998 totaled $1.3
million and $17.6 million, respectively. The Distribution was accounted for as a
non-reciprocal (non-cash) transfer to the Company's former shareholders reducing
additional paid in-capital by approximately $150.0 million on the CBS Merger
date.

Accounting Policies

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("FAS") No. 130, "Reporting Comprehensive
Income," which became effective for the Company for periods beginning after
December 15, 1997. FAS No. 130 establishes standards for reporting and
displaying comprehensive income and its components (revenues, expenses, gains,
and losses) in a full set of general purpose financial statements. FAS No. 130
requires that a company (a) classify items of other comprehensive income by
their nature in a financial statement and (b) display the accumulated balance of
other comprehensive income separately from retained earnings and additional
paid-in-capital in the equity section of the balance sheet. Reclassification of
financial statements for earlier periods provided for

F-72
<PAGE> 162
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. BASIS OF PRESENTATION -- (CONTINUED)
comparative purposes is required. The Company has adopted this statement in the
first quarter of 1998. Comprehensive income does not differ from net income.

In June 1998, the FASB issued Statement No. 133 (FAS 133), "Accounting for
Derivative Instruments and Hedging Activities," which requires that all
derivative instruments be recorded on the balance sheet at their fair value.
Changes in the fair value of derivatives are recorded each period in current
earnings or other comprehensive income, depending on whether a derivative is
designated as part of a hedge transaction and if it is, the type of hedge
transaction. For fair-value hedge transactions in which the Company is hedging
changes in an asset's, liability's or firm commitment's fair value, changes in
the fair value of the derivative instrument will generally be offset in the
income statement by changes in the hedged item's fair value. For cash flow hedge
transactions, changes in the fair value of the derivative instrument will be
reported in comprehensive income. The gains and losses on the derivative
instrument that are reported in other comprehensive income will be reclassified
as earnings in the periods in which earnings are impacted by the variability of
the cash flows of the hedged item. The ineffective portion of all hedges will be
recognized in current period earnings. The Company currently expects to adopt
FAS 133 for the year ending December 31, 1999. Management does not believe that
the adoption of FAS 133 will have a material impact on its results of operations
or financial position.

Reclassifications

Certain reclassifications have been made to the 1997 financial statements
to conform to the 1998 presentation.

2. PER SHARE DATA

In the fourth quarter of 1997, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). Prior to the
fourth quarter of 1997, the Company computed income (loss) per common share
using the methods outlined in Accounting Principles Board Opinion No. 15,
"Earnings Per Share", and its interpretations.

Basic income (loss) per common share is computed using the weighted average
number of common shares outstanding during each year. Diluted income (loss) per
common share reflects the effect of the Company's outstanding options (using the
treasury stock method), except where such items would be anti-dilutive. Shares
of redeemable preferred stock convertible into common stock have been excluded
from the diluted computation as they are anti-dilutive. Had such shares been
included, shares for the diluted computation would have been increased by
approximately 3,235,000 in 1997 and 1998. In addition, because such shares are
anti-dilutive, no adjustment has been made to reconcile from income (loss) for
the basic computation to that for the diluted computation. No effect has been
given to stock options in 1997 and 1998 as they are anti-dilutive for that year.
Had such options been included, shares for the diluted computation would have
been increased by 1,067,000 and 1,870,000 in 1997 and 1998, respectively.

3. INCOME TAXES

The Company provides for income taxes at the end of each interim period
based on the estimated effective tax rate for the full fiscal year for each tax
reporting corporate entity. Cumulative adjustments to the tax benefit
(provision) are recorded in the interim period in which a change in the
estimated annual effective rate is determined.

F-73
<PAGE> 163
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS

Property and equipment and intangible assets included approximately $84.0
million and $56.9 million of assets related to radio stations held for sale or
under exchange agreements (excluding the CBS Merger Agreement) as of December
31, 1997 and March 31, 1998, respectively. The following summary presents the
results of operations (excluding depreciation and amortization, net local
marketing agreement and corporate general and administrative expenses) relating
to these stations that are included in the accompanying unaudited condensed
consolidated financial statements for each respective period.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------
1997 1998
------- -------
(IN THOUSANDS)
<S> <C> <C>
Net operating revenues...................................... $1,835 $2,195
Net operating expenses...................................... 1,787 2,621
</TABLE>

5. ACQUISITIONS AND DISPOSITIONS

General: The following acquisitions have all been accounted for by the
purchase method of accounting, and, accordingly, the operating results of the
acquired entities, to the extent that a local marketing agreement (LMA) did not
exist, have been included in consolidated operating results since the date of
acquisition. The purchase price has been allocated to the assets acquired,
principally intangible assets, and the liabilities assumed based on their
estimated fair values at the dates of acquisition. The excess of purchase price
over the estimated fair value of the net assets acquired has been recorded as
goodwill. The financial statements reflect the preliminary allocation of certain
purchase prices as the appraisals for certain acquisitions have not yet been
finalized. The Company does not expect the final appraisals will have a material
effect on the financial position, results of operations or liquidity of the
Company.

During the first three months of 1998, the Company consummated the
following station and tower related transactions.

1998 ACQUISITIONS AND DISPOSITIONS:

Dayton and Kansas City: In January 1998, the Company consummated an
agreement to exchange WXEG-FM, WBTT-FM, WLQT-FM, WMMX-FM, WTUE-FM and WONE-AM
serving Dayton in exchange for WDAF-AM, KOZN-FM (formerly KYYS-FM), KMXV-FM and
KUDL-FM serving Kansas City. The Company began programming and marketing KYYS-FM
and KMXV-FM pursuant to an LMA agreement in September 1997.

F-74
<PAGE> 164
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)
The following unaudited pro forma summary for the three months ended March
31, 1997 and 1998 presents the consolidated results of operations as if the
acquisitions had occurred as of January 1, 1997 after giving effect to certain
adjustments, including depreciation and amortization of assets and interest
expense on any debt incurred to fund the acquisitions. These unaudited pro forma
results have been prepared for comparative purposes only and do not purport to
be indicative of what would have occurred had the acquisitions been made as of
January 1, 1997 or of results which may occur in the future.

<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1997 MARCH 31, 1998
------------------ ------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C>
Net revenues................................... $ 84,144 $ 88,593
Loss from continuing operations................ (9,229) (4,068)
Net loss....................................... (10,926) (9,167)
Loss from continuing operations applicable to
common stockholders.......................... (17,066) (12,462)
Basic and diluted net loss per common share --
continuing operations........................ $ (.58) $ (.42)
</TABLE>

6. PENDING TRANSACTIONS

7. SUBSIDIARY GUARANTEES

The Company's payment obligations under the 9.00% Senior Subordinated Notes
("9.00% Notes") and the 9.75% Senior Subordinated Notes ("9.75% Notes") are
fully and unconditionally guaranteed on a joint and several basis (collectively,
the "Subsidiary Guarantees"), on a senior basis (in the case of the 9.75% Notes)
and a senior subordinated basis (in the case of the 9.00% Notes) by all of its
present and any future Restricted Subsidiaries (collectively "Restricted
Guarantors"). The Restricted Subsidiaries have also unconditionally guaranteed,
and any future Restricted Subsidiaries will be required to guarantee, on a joint
and several basis (collectively, the "Senior Subsidiary Guarantees"), all
obligations of the Company under the 1997 Credit Agreement. The Tower Subsidiary
has not guaranteed obligations under the Credit Agreements or either series of
the Senior Subordinated Notes.

F-75
<PAGE> 165
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. SUBSIDIARY GUARANTEES -- (CONTINUED)
With the intent that the Subsidiary Guarantees not constitute fraudulent
transfers or conveyances under applicable state or federal law, the obligation
of each guarantor under its Subsidiary Guarantee is also limited to the maximum
amount as will, after giving effect to any rights to contribution of such
guarantor pursuant to any agreement providing for an equitable contribution
among such guarantor and other affiliates of the Company of payments made by
guarantees by such parties, result in the obligations of such guarantor in
respect of such maximum amount not constituting a fraudulent conveyance.

The following unaudited condensed consolidating financial data illustrates
the composition of the combined guarantors. The Company believes that separate
complete financial statements of the respective guarantors would not provide
additional material information which would be useful in assessing the financial
composition of the guarantors. No single guarantor has any significant legal
restrictions on the ability of investors or creditors to obtain access to its
assets in event of default on the Subsidiary Guarantee, other than in the case
of the 9.00% Notes its subordination to Senior Debt described above.

F-76
<PAGE> 166
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 1998

<TABLE>
<CAPTION>
PARENT AND GUARANTOR NON-GUARANTOR CONSOLIDATED
ITS DIVISIONS SUBSIDIARIES SUBSIDIARY ELIMINATIONS TOTALS
------------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents........... $ 4,303 $ 1,895 $ 6,198
Accounts receivable,
net................... 44,460 28,751 73,211
Prepaid expenses and
other assets.......... 8,243 1,636 9,879
Deferred income taxes.... 4,006 2,359 6,365
---------- ---------- -------- ----------- ----------
Total current
assets......... 61,012 34,641 95,653
---------- ---------- -------- ----------- ----------
PROPERTY AND EQUIPMENT,
NET...................... 75,078 46,414 121,492
---------- ---------- -------- ----------- ----------
OTHER ASSETS:
Investment in and
advances to
subsidiaries.......... 1,344,168 $(1,344,168)
Investment notes
receivable............ 25,498 610 26,108
Intangible assets -- net
Goodwill -- net....... 330,875 20,759 351,634
FCC licenses -- net... 1,171,196 1,171,196
Other intangible
assets -- net....... 26,373 2,204 28,577
Deposits and other long-
term assets........... 3,120 66 3,186
Deferred income taxes....
Net assets of
discontinued
operations............ 415 $233,318 (78,023) 155,710
---------- ---------- -------- ----------- ----------
Total other
assets......... 1,730,449 1,194,835 233,318 (1,422,191) 1,736,411
---------- ---------- -------- ----------- ----------
TOTAL...................... $1,866,539 $1,275,890 $233,318 $(1,422,191) $1,953,556
========== ========== ======== =========== ==========
</TABLE>

F-77
<PAGE> 167
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

MARCH 31, 1998

<TABLE>
<CAPTION>
PARENT AND GUARANTOR NON-GUARANTOR CONSOLIDATED
ITS DIVISIONS SUBSIDIARIES SUBSIDIARY ELIMINATIONS TOTALS
------------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of
long-term debt........ $ 282 $ 282
Accounts payable and
accrued expenses...... 27,771 $ 7,560 35,331
Income taxes payable..... 107,016 18,758 $ (125,210) 564
---------- ---------- -------- ----------- ----------
Total current
liabilities.... 135,069 26,318 (125,210) 36,177
---------- ---------- -------- ----------- ----------
NONCURRENT LIABILITIES:
Deferred income taxes.... 367 185,870 186,237
Other long-term
liabilities........... 8,507 39 8,546
Long-term debt........... 863,361 863,361
---------- ---------- -------- ----------- ----------
Total noncurrent
liabilities.... 872,235 185,909 1,058,144
---------- ---------- -------- ----------- ----------
REDEEMABLE PREFERRED
STOCK.................... 215,550 215,550
---------- ---------- -------- ----------- ----------
STOCKHOLDERS' EQUITY:
Preferred stock.......... 1 1
Common stock............. 295 490 (490) 295
Notes receivable, due
from stockholders..... (49,375) 49,375
Additional paid-in
capital............... 663,036 1,053,602 286,590 (1,340,192) 663,036
Unearned compensation.... (178) (178)
Retained earnings
(accumulated
deficit).............. (19,011) 10,061 (4,387) (5,674) (19,011)
Treasury stock........... (458) (458)
---------- ---------- -------- ----------- ----------
Total
stockholders'
equity......... 643,685 1,063,663 233,318 (1,296,981) 643,685
---------- ---------- -------- ----------- ----------
TOTAL............ $1,866,539 $1,275,890 $233,318 $(1,422,191) $1,953,556
========== ========== ======== =========== ==========
</TABLE>

F-78
<PAGE> 168
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998

<TABLE>
<CAPTION>
PARENT AND
ITS GUARANTOR NON-GUARANTOR CONSOLIDATED
DIVISIONS SUBSIDIARIES SUBSIDIARY ELIMINATIONS TOTALS
---------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net revenues.................. $53,789 $34,804 $88,593
License fees charged to
Parent...................... (4,283) 4,283 0
------- ------- ------- ------ -------
Total net revenues............ 49,506 39,087 88,593
OPERATING EXPENSES:
Operating expenses excluding
depreciation and
amortization, net local
marketing agreement and
corporate general and
administrative
expenses............... 39,664 25,687 65,351
Net local marketing
agreement expenses....... 683 26 709
Depreciation and
amortization............. 5,228 12,790 18,018
Corporate general and
administrative........... 1,905 1,905
------- ------- ------- ------ -------
OPERATING INCOME.............. 2,026 584 2,610
OTHER INCOME (EXPENSE):
Interest expense............ (16,583) (16,583)
Interest income............. 330 330
Gain (loss) on sale of
assets and other, net.... 394 (54) 340
Equity in income of
subsidiaries............. 270 (270) 0
------- ------- ------- ------ -------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME
TAXES....................... (13,563) 530 (270) (13,303)
INCOME TAX PROVISION
(BENEFIT)................... (9,632) 260 (9,372)
------- ------- ------- ------ -------
Income (loss) from continuing
operations.................. (3,931) 270 (270) (3,931)
------- ------- ------- ------ -------
Loss from discontinued
operations.................. (5,099) (1,527) 1,527 (5,099)
------- ------- ------- ------ -------
Net income (loss)............. $(9,030) $ 270 $(1,527) $1,257 $(9,030)
======= ======= ======= ====== =======
</TABLE>

F-79
<PAGE> 169
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998

<TABLE>
<CAPTION>
PARENT AND
ITS GUARANTOR NON-GUARANTOR CONSOLIDATED
DIVISIONS SUBSIDIARIES SUBSIDIARY TOTALS
---------- ------------ ------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
CASH PROVIDED BY OPERATING ACTIVITIES:
Continuing operations....................... $ (7,595) $ 20,284 $ 12,689
Discontinued operations..................... $ (1,738) (1,738)
-------- -------- -------- ---------
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES... $ (7,595) $ 20,284 $ (1,738) $ 10,951
-------- -------- -------- ---------
INVESTING ACTIVITIES:
Payments for purchase of property equipment
and intangible assets.................... (2,994) (2,994)
Proceeds from asset and radio station
sales.................................... 3,952 3,952
Repayment of investment notes receivable.... 4 4
Payments for purchase of radio stations..... (42,154) (42,153)
Repayments for investment notes
receivable...............................
Deposits and other long-term assets......... (79) (79)
-------- -------- -------- ---------
Continuing operations....................... (41,271) (41,270)
Discontinued operations..................... (91,835) (91,835)
-------- -------- -------- ---------
Cash flows used for investing
activities........................ (41,271) (91,835) (133,105)
-------- -------- -------- ---------
Financing Activities:
Borrowings under the Credit Agreements and
other.................................... 30,000 30,000
Repayments under the Credit Agreements
Repayments under other obligations....... (208) (208)
Dividends paid.............................. (8,394) (8,394)
Net proceeds from equity offerings and
options.................................. 219 219
Investment in and advances to
subsidiaries............................. 19,966 (19,966) 0
-------- -------- -------- ---------
Continuing operations....................... 41,583 (19,966) 21,617
Discontinued operations..................... 1,115 95,776 96,891
-------- -------- -------- ---------
Cash flows from (used for) financing
activities........................ 42,698 (19,966) 95,776 118,508
-------- -------- -------- ---------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS................................. (6,168) 318 2,203 (3,646)
CHANGE IN CASH AND CASH EQUIVALENTS INCLUDED
IN DISCONTINUED OPERATIONS.................. (2,203) (2,204)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD...................................... 10,470 1,578 0 12,048
-------- -------- -------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD...... $ 4,302 $ 1,896 $ 0 $ 6,198
======== ======== ======== =========
</TABLE>

F-80
<PAGE> 170
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. SUBSEQUENT EVENTS

Radio Transactions

Portsmouth: In August 1998, the Company sold the assets of WQSO-FM and
WZNN-AM serving Rochester, New Hampshire and WERZ-FM and WMYF-AM, serving
Exeter, New Hampshire for approximately $6.0 million.

San Jose: In August 1998, the Company consummated the sale of KSJO-FM for
approximately $30.0 million.

St. Louis: In July 1998, the Company sold the assets of KFNS-AM serving the
St. Louis, Missouri market for approximately $3.8 million.

Temple: In June 1998, the Company acquired radio station KKIK-FM, licensed
to Temple, Texas (in the Austin area) for approximately $3.7 million.

F-81
<PAGE> 171
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. SUBSEQUENT EVENTS -- (CONTINUED)
West Palm Beach: In July 1997, the Company entered into an agreement to
acquire WTPX-FM for approximately $11.0 million. The Company began programming
and marketing the station pursuant to an LMA in June 1997. In October 1997, the
Company entered into an agreement to terminate these agreements. In May 1998,
the WTPX-FM termination agreement was consummated and a third party acquired
WTPX-FM from the Company pursuant to which the Company received the net proceeds
of certain investment notes.

In July 1998, the Company sold WEAT-AM serving West Palm Beach, Florida for
approximately $1.5 million.

Tower Separation

F-82
<PAGE> 172
CBS RADIO, INC.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. SUBSEQUENT EVENTS -- (CONTINUED)
ARS or ATS to the other party following the closing date of the CBS Merger. ATS
will benefit from or bear the cost of such adjustments.

Debt and Equity Securities.

Credit Agreement -- The outstanding balance of this security was repaid
using the proceeds from the Junior Preferred Stock issued in conjunction with
the CBS Merger.

Dividends on the Convertible Preferred Stock are cumulative at an annual
rate of 7% (equivalent to $3.50 per Depositary Share), accruing from the date of
original issuance (June 25, 1995) and are payable quarterly in arrears on March
31, June 30, September 30 and December 31, commencing September 30, 1996. The
ability of ARS to pay dividends is restricted under the terms of the 9% Notes
and the 9 3/4% Notes and is prohibited during the existence of a default under
the indentures.

(FORMERLY AMERICAN RADIO SYSTEMS CORPORATION)

(A WHOLLY OWNED SUBSIDIARY OF CBS CORPORATION)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. SUBSEQUENT EVENTS -- (CONTINUED)
the outstanding balance and accrued interest under the Company's Revolving
Credit Agreement. In July 1998, the number of shares authorized was increased to
one million. As of September 30, 1998, 68,828 additional shares were issued. The
proceeds from the issuance of these securities, totaling $68.8 million, were
used to redeem the Senior Subordinated Notes and 7% Convertible Exchangeable
Preferred Stock.

Securities held by CBS -- As of September 30, 1998 CBS had purchased and
continues to hold $6.0 million of Senior Subordinated Notes and $16.9 million of
the 11 3/8% Subordinated Exchange Debentures.

F-84
<PAGE> 174

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Infinity Media Corporation:

We have audited the consolidated balance sheets of Infinity Media
Corporation (formerly known as Infinity Broadcasting Corporation) and
subsidiaries as of December 31, 1995 and 1996 and the related consolidated
statements of earnings, changes in stockholders' equity and cash flows for the
years then ended. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Infinity
Media Corporation (formerly known as Infinity Broadcasting Corporation) and
subsidiaries as of December 31, 1995 and 1996, and the results of their
operations and their cash flows for the years then ended, in conformity with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

New York, New York
September 15, 1998,
except for Note 14,
which is as of
October 29, 1998

F-85
<PAGE> 175

INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1996
-------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 20,340 19,836
Receivables (less allowance of $2,139 in 1995 and $6,688
in 1996)............................................... 86,720 179,366
Prepaid expenses and other current assets................. 1,305 7,777
Assets held for sale...................................... -- 70,347
-------- ---------
108,365 277,326
-------- ---------
Property and equipment at cost (net of accumulated
depreciation of $14,676 in 1995 and $18,141 in 1996)...... 20,561 38,714
Intangible assets (net of accumulated amortization of
$147,158 in 1995 and $235,230 in 1996).................... 451,220 1,435,340
Other assets................................................ 14,310 20,462
-------- ---------
$594,456 1,771,842
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accrued expenses............... 18,392 38,032
Transit franchise payable................................. -- 14,752
Accrued compensation...................................... 6,799 12,641
Accrued interest.......................................... 7,131 6,430
Income taxes.............................................. 4,866 1,433
Merger related liabilities................................ -- 12,818
Other current liabilities................................. 15,892 41,194
Current portion of long-term debt......................... -- 563
-------- ---------
Total current liabilities......................... 53,080 127,863
-------- ---------
Long-term debt.............................................. 267,384 1,077,976
Deferred income taxes....................................... -- 186,374
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value: 10,000,000 shares
authorized; none issued................................ -- --
Class A Common Stock, $.002 par value: 200,000,000 shares
authorized in 1995 and 300,000,000 shares authorized in
1996; 78,142,278 shares issued in 1995 and 83,011,870
shares issued in 1996..................................... 156 166
Class B Common Stock, $.002 par value: 17,500,000 shares
authorized; issued and outstanding 8,325,047 shares in
1995 and 8,310,465 shares in 1996...................... 17 17
Class C Common Stock, $.002 par value: 30,000,000 shares
authorized; issued and outstanding 1,116,257 in 1995
and -0- in 1996........................................ 2 --
Additional paid-in capital.................................. 529,837 613,302
Foreign currency translation................................ -- 1,096
Retained earnings (deficit)................................. (196,338) (170,449)
-------- ---------
333,674 444,132
Less treasury stock at cost, 4,191,218 shares in 1995 and
4,370,517 shares in 1996.................................. (59,682) (64,503)
-------- ---------
Total stockholders' equity........................ 273,992 379,629
-------- ---------
$594,456 1,771,842
======== =========
</TABLE>

See accompanying Notes to Consolidated Financial Statements.
F-86
<PAGE> 176

INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-------------------
1995 1996
-------- -------
<S> <C> <C>
Total revenues.............................................. $372,429 773,187
Less agency commissions..................................... (46,723) (95,184)
-------- -------
Net revenues...................................... 325,706 678,003
-------- -------
Operating expenses excluding depreciation and
amortization.............................................. 167,285 439,610
Depreciation and amortization............................... 50,482 96,056
Corporation general and administration expenses............. 6,135 7,602
-------- -------
223,902 543,268
-------- -------
Operating income.................................. 101,804 134,735
-------- -------
Other (expense) income:
Interest expense.......................................... (44,385) (64,201)
Interest income........................................... 387 1,022
Other income (expense).................................... (1,715) 1,636
Merger costs.............................................. -- (19,800)
-------- -------
Earnings before income taxes...................... 56,091 53,392
Income taxes................................................ 1,588 27,503
-------- -------
Net earnings...................................... $ 54,503 25,889
======== =======
</TABLE>

See accompanying Notes to Consolidated Financial Statements.
F-87
<PAGE> 177

INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1995 1996
---------- ----------
<S> <C> <C>
Net cash flows from operating activities:
Net earnings.............................................. $ 54,503 25,889
Depreciation and amortization............................. 50,482 96,056
Amortization of deferred financing costs.................. 2,056 1,812
Deferred taxes............................................ -- 1,149
Other..................................................... -- (1,077)
--------- ---------
107,041 123,829
Increase in receivables................................... (10,171) (49,212)
Decrease (increase) in other current assets............... (769) 1,080
Decrease in accounts payable and accrued expenses......... (47) (266)
Decrease in accrued interest.............................. (2,474) (701)
Increase in income taxes.................................. -- 11,440
Other, net................................................ (7,442) 5,847
--------- ---------
Net cash flow from operating activities.............. 86,138 92,017
--------- ---------
Investing activities:
Capital expenditures...................................... 2,789 7,387
Acquisitions:
Property and equipment................................. 200 21,750
Intangibles............................................ 52,800 1,150,489
Other assets........................................... -- 56,506
Less liabilities....................................... (2,415) (273,529)
Less: stock issued..................................... -- (67,189)
--------- ---------
Net cash used for investing activities............... 53,374 895,414
--------- ---------
Cash provided (required) before financing
activities.......................................... $ 32,764 (803,397)
========= =========
Financing activities:
Borrowings under debt agreements.......................... 56,000 928,896
Reduction of debt......................................... (320,366) (119,474)
Proceeds from issuance of stock........................... 269,852 1,411
Deferred financing costs.................................. (792) (3,119)
Repurchase of Class A Common Stock........................ (24,838) (4,821)
--------- ---------
Net cash and cash equivalents (used for) provided by
financing activities................................ (20,144) 802,893
Decrease (increase) in cash and cash equivalents.......... (12,620) 504
--------- ---------
Total cash (used for) provided by financing
activities.......................................... $ (32,764) 803,397
========= =========
</TABLE>

See accompanying Notes to Consolidated Financial Statements.
F-88
<PAGE> 178

INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995 AND 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
COMMON STOCK COMMON STOCK COMMON STOCK ADD'L FOREIGN RETAINED
--------------- --------------- --------------- PAID-IN CURRENCY EARNINGS
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL TRANSLATION (DEFICIT)
------ ------ ------ ------ ------ ------ ------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31,
1994................... 64,729 $129 8,652 $18 1,116 $ 2 260,011 -- (250,841)
Net earnings............. -- -- -- -- -- -- -- -- 54,503
Issuance of Class A
Common Stock........... 13,086 26 -- -- -- -- 269,826 -- --
Conversion of Class B
Common Stock to Class A
Common Stock........... 327 1 (327) (1) -- -- -- -- --
Treasury Stock
acquired............... -- -- -- -- -- -- -- -- --
------ ---- ----- --- ------ --- ------- ----- --------
BALANCE AT DECEMBER 31,
1995................... 78,142 156 8,325 17 1,116 2 529,837 -- (196,338)
Net earnings............. -- -- -- -- -- -- -- -- 25,889
Issuance of Class A
Common Stock related to
acquisition of TDI..... 2,370 5 -- -- -- -- 67,184 -- --
Issuance of Class A
Common Stock upon
exercise of stock
options................ 581 1 -- -- -- -- 1,401 -- --
Issuance of Class B
Common Stock........... -- -- 788 2 -- -- 7 -- --
Conversion of Class B
Common Stock to Class A
Common Stock........... 803 2 (803) (2) -- -- -- -- --
Conversion of Class C
Common Stock to Class A
Common Stock........... 1,116 2 -- -- (1,116) (2) -- -- --
Foreign currency
translation
adjustment............. -- -- -- -- -- -- -- 1,096 --
Income tax benefit from
exercise of stock
options................ -- -- -- -- -- -- 14,873 -- --
Treasury Stock
acquired............... -- -- -- -- -- -- -- -- --
------ ---- ----- --- ------ --- ------- ----- --------
BALANCE AT DECEMBER 31,
1996................... 83,012 $166 8,310 $17 -- $-- 613,302 1,096 (170,449)
====== ==== ===== === ====== === ======= ===== ========

TREASURY STOCK
-----------------
SHARES AMOUNT TOTAL
------ -------- -------
<S> <C> <C> <C>
BALANCE AT DECEMBER 31,
1994................... (2,935) $(34,844) (25,525)
Net earnings............. -- -- 54,503
Issuance of Class A
Common Stock........... -- -- 269,852
Conversion of Class B
Common Stock to Class A
Common Stock........... -- -- --
Treasury Stock
acquired............... (1,256) (24,838) (24,838)
------ -------- -------
BALANCE AT DECEMBER 31,
1995................... (4,191) (59,682) 273,992
Net earnings............. -- -- 25,889
Issuance of Class A
Common Stock related to
acquisition of TDI..... -- -- 67,189
Issuance of Class A
Common Stock upon
exercise of stock
options................ -- -- 1,402
Issuance of Class B
Common Stock........... -- -- 9
Conversion of Class B
Common Stock to Class A
Common Stock........... -- -- --
Conversion of Class C
Common Stock to Class A
Common Stock........... -- -- --
Foreign currency
translation
adjustment............. -- -- 1,096
Income tax benefit from
exercise of stock
options................ -- -- 14,873
Treasury Stock
acquired............... (179) (4,821) (4,821)
------ -------- -------
BALANCE AT DECEMBER 31,
1996................... (4,370) $(64,503) 379,629
====== ======== =======
</TABLE>

See accompanying Notes to Consolidated Financial Statements.
F-89
<PAGE> 179

INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1996

(1) BUSINESS COMBINATION WITH WESTINGHOUSE ELECTRIC CORPORATION

On June 20, 1996, CBS Corporation, formerly Westinghouse Electric
Corporation, and Infinity Media Corporation, formerly Infinity Broadcasting
Corporation, (the "Company") entered into an Agreement and Plan of Merger (the
"Merger Agreement").

The merger was consummated on December 31, 1996 and pursuant to the Merger
Agreement each share of issued and outstanding share of the Company's common
stock was converted into 1.71 shares of CBS Corporation common stock. The
accompanying consolidated financial statements are presented on the historical
basis of the Company prior to the merger and reflect the results of operations
through December 31, 1996. Costs incurred by the Company related to the merger
are reflected in the accompanying 1996 statement of earnings.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Principles of Consolidation and Presentation

The consolidated financial statements include the accounts of the Company
and its wholly-owned radio broadcasting and outdoor advertising subsidiaries.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts and related disclosures. Actual results could differ
from those estimates.

(b) Revenue Recognition

Revenues derived from the sale of radio advertising spots are recognized
when the spots are broadcast. Revenues from the sale of outdoor advertising
space are recognized proportionately over the contract term.

Property and equipment are recorded at cost. Depreciation is provided on a
straight-line basis over estimated useful lives.

(d) Intangible Assets

Intangible assets including goodwill are being amortized over their
estimated useful lives ranging from 5 to 25 years for identifiable intangibles,
and 15 to 25 years for goodwill.

Management continuously monitors and evaluates the realizability of
recorded intangibles to determine whether their carrying values have been
impaired. In evaluating the value and future benefits of intangible assets,
their carrying value is compared to management's best estimate of undiscounted
future cash flows over the remaining amortization period. If such assets are
considered to be impaired, the impairment to be recognized is measured by the
amount by which the carrying value of the assets exceeds their fair value. The
Company believes that the carrying value of recorded intangibles is not
impaired.

(e) Impairment of Long-Lived Assets

The Company adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of," on January 1, 1996. SFAS No. 121
requires that long-lived assets and certain identifiable intangibles be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the

F-90
<PAGE> 180
INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

carrying amount of an asset to future net cash flows expected to be generated by
the asset. If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the assets
exceeds their fair value. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell. Adoption of SFAS No. 121
did not have any impact on the Company's consolidated financial position,
results of operations, or liquidity.

(f) Income Taxes

The Company and its subsidiaries file a consolidated Federal income tax
return.

The Company accounts for income taxes under SFAS No. 109 "Accounting for
Income Taxes," which requires the use of the asset and liability method of
financial accounting and reporting for income taxes. Deferred income taxes
reflect the impact of temporary differences between the amount of assets and
liabilities recognized for financial reporting purposes and the amounts
recognized for tax purposes. In accordance with SFAS No. 109 the deferred taxes
are measured by applying currently enacted tax laws.

(g) Cash Equivalents

Cash equivalents include certificates of deposit and commercial paper with
maturities of one month or less.

(h) Fair Value of Financial Instruments

The estimated fair value of financial instruments is determined by the
Company using the best available market information and appropriate valuation
methodologies. However, considerable judgment is necessary in interpreting
market data to develop the estimates of fair value. Accordingly, the estimates
presented are not neccessarily indicative of the amounts that the Company could
realize in a current market exchange or the value that ultimately will be
realized by the Company upon maturity or disposition. The use of different
market assumptions or estimation methodologies may have a material effect on the
estimated fair value amounts. Most of the Company's financial instruments,
including cash, trade receivables and payables and accruals, are short term in
nature. Accordingly, the carrying amount of such financial instruments
approximates their fair value. The carrying amount of long-term debt other than
subordinated debt approximates fair value. The fair value of subordinated debt
is based on quoted market prices.

(i) Stock Option Plans

On January 1, 1996, the Company adopted SFAS No. 123, "Accounting for
Stock-Based Compensation," which permits entities to recognize as expense over
the vesting period the fair value of all stock-based awards on the date of
grant. Alternatively, SFAS No. 123 allows entities to continue to measure
compensation cost for stock-based awards using the intrinsic value based method
of accounting prescribed by APB Opinion No. 25, "Accounting for Stock Issued to
Employees," and to provide pro forma net income disclosures as if the fair value
based method defined in SFAS No. 123 had been applied. The Company has elected
to continue to apply the provisions of APB Opinion No. 25 and provide the pro
forma disclosure provisions of SFAS No. 123.

(j) Foreign Currency Translation

The statutory accounts of the Company's consolidated foreign subsidiaries
are maintained in accordance with local accounting regulations and are stated in
local currencies. Local statements are translated into U.S.

F-91
<PAGE> 181
INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

generally accepted accounting principles and U.S. dollars in accordance with
SFAS No. 52, "Accounting for Foreign Currency Translation."

Under SFAS No. 52, foreign currency assets and liabilities are translated
using the exchange rates in effect at the balance sheet date. Results of
operations are translated using the average exchange rates prevailing throughout
the year. The effects of exchange rate fluctuations on translating foreign
currency assets and liabilities into U.S. dollars are accumulated as part of the
foreign currency translation adjustment in consolidated stockholders' equity.
Gains and losses from foreign currency transactions are included in net earnings
in the period in which they occur.

(k) Advertising Costs

Advertising costs are expensed as incurred.

(l) New Pronouncements

Consolidated Statement of Comprehensive Income

In June 1997, SFAS No. 130, "Reporting Comprehensive Income," and SFAS No.
131, "Disclosure About Segments of an Enterprise and Related Information," were
issued. SFAS No. 130 requires that an enterprise report by major component and
as a single total the change in its net assets from nonowner sources during the
period. SFAS No. 131 establishes annual and interim reporting standards for an
enterprise's operating segments and related disclosures about its products,
services, geographic areas, and major customers. Adoption of these statements
will not impact the Company's consolidated financial position, results of
operations, or cash flows, and any effect will be limited to the form and
content of its disclosures. Both statements are effective for fiscal years
beginning after December 15, 1997.

(3) STOCK OFFERINGS AND STOCK DIVIDENDS

Effective May 12, 1995, the Company declared a three-for-two stock split in
the form of a stock dividend payable on May 19, 1995 to shareholders of record
at the close of business on May 12, 1995.

On October 24, 1995, the Company, through a public offering sold 12,750,000
shares of Class A Common Stock, resulting in proceeds to the Company of
approximately $269 million.

On March 18, 1996, the Company declared a three-for-two stock split in the
form of a stock dividend payable on April 11, 1996 to holders of record on March
28, 1996. The accompanying consolidated financial statements reflect the effect
of all of the above stock dividends.

On July 10, 1996, the Company amended its Restated Certificate of
Incorporation to increase the number of authorized shares of Class A Common
Stock to 300,000,000.

(4) ACQUISITIONS

In April 1995, the Company acquired Dallas/Ft. Worth radio station KLUV-FM
from TK Communications, Inc. for approximately $51 million, plus costs.

On January 16, 1996 the Company completed the acquisition of radio stations
KYNG-FM and KSNN-FM in Dallas, KFRC-FM, KFRC-AM and KYCY-FM in San Francisco,
WYCD-FM in Detroit and KYCW-FM in Seattle from various entities affiliated with
Alliance Broadcasting, Inc. for approximately $275 million, plus costs. On May
22, 1996, the Company completed the sale of its Seattle radio station KYCW-FM to
EZ Communications for $26 million.

F-92
<PAGE> 182
INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On March 26, 1996, the Company completed the acquisition of all of the
outstanding stock of TDI Worldwide, Inc. ("TDI"), a seller of advertising space
on buses and transit systems, for approximately $300 million plus costs.

On June 27, 1996, the Company completed the acquisition of twelve radio
stations from Granum Holdings L.P. for approximately $425 million including
working capital, plus costs. The radio stations are KRBV-FM, KHVN-AM and KOAI-FM
in Dallas/Ft. Worth, WBOS-FM and WOAZ-FM in Boston, WCAO-AM and WXYV-FM in
Baltimore, WAOK-AM and WVEE-FM in Atlanta and WHTQ-FM, WMMO-FM and WHOO-AM in
Orlando.

The purchase price of the above acquisitions were funded by borrowings
under the Company's bank credit agreement (the "Credit Agreement") and issuance
of approximately 2.4 million shares of the Company's Class A Common Stock.

The above acquisitions have been accounted for by the purchase method of
accounting. The purchase price has been allocated to the assets acquired,
principally intangible assets, and the liabilities assumed based on their
estimated fair values at the date of acquisition. The excess of purchase price
over the estimated fair values of the net assets acquired has been recorded as
goodwill.

The operating results of these acquisitions are included in the Company's
consolidated results of operations from the date of acquisition. The following
unaudited pro forma summary presents the consolidated results of operations as
if the 1995 and 1996 acquisitions had occurred as of the beginning of 1995,
after giving effect to certain adjustments, including amortization of intangible
assets and interest expense on the acquisition debt. These pro forma results
have been prepared for comparative purposes only and do not purport to be
indicative of what would have occurred had the acquisitions been made as of
those dates or of results which may occur in the future.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1995 1996
---------- ---------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Net revenues........................................... $656,752 750,521
Net earnings........................................... 15,361 6,682
</TABLE>

In May 1996, the Company entered into an agreement with Cox Broadcasting,
Inc. ("Cox") to swap its radio stations WHTQ-FM, WMMO-FM and WHOO-AM in Orlando
for Cox's radio stations WCKG-FM and WYSY-FM in Chicago. In addition, the
Company has agreed to pay Cox $20 million. The transaction has been structured
as a tax-free, like-kind exchange. The acquisitions closed in February 1997. In
August 1996, the Company entered into an agreement to sell WYSY-FM to Spanish
Broadcasting System, Inc. for $33 million upon completion of the Company's
acquisition of the station from Cox. This transaction closed in March 1997.

In October 1996, the Company entered into an agreement to sell its Dallas
radio station KEWS-FM for $32 million to Salem Communications Corp. ("Salem")
and as part of the consideration, the Company will receive Salem's Dallas
station KDFX-AM. The Company also entered into an agreement to sell its Dallas
station KDMM-AM for $675,000 to Marcos Rodriguez, Inc. Such transactions closed
February 1997.

The Company has reported the carrying value of the assets held for sale at
the lower of cost or their estimated net realizable value. The Company has
presented the assets held for sale as a separate line item in its consolidated
balance sheets.

F-93
<PAGE> 183
INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On February 3, 1994, the Company, Unistar Communications Group, Inc.
("UCG"), Unistar Radio Networks, Inc. ("Unistar") and Westwood One, Inc.
("Westwood One") consummated the purchase by Westwood One of Unistar for
approximately $101.3 million. In connection with this transaction, an affiliate
of the Company received 5 million newly issued shares of common stock of
Westwood One for $3 per share and a warrant to purchase an additional 3 million
shares of Westwood One's common stock at a purchase price of $3 per share,
subject to certain vesting requirements. The Company manages Westwood One
pursuant to a management agreement which provides for a base management fee plus
a bonus based on achieving cash flow targets and additional warrants to acquire
shares of Westwood One's common stock in the event that Westwood One's common
stock trades above certain target price levels. In September 1994 and August
1995, pursuant to such provision, the Company received a warrant to purchase
500,000 shares of Westwood One's common stock at an exercise price of $3 per
share and 500,000 shares at an exercise price of $4 per share, respectively. In
December 1995 and 1996, the Company received approximately $5,593,750 and
$5,750,000, respectively, as a result of Westwood One's purchase and
cancellation of the Company's warrants exercisable at $3 and $4 per share,
respectively. The Company accounts for its investment in Westwood One on the
equity basis.

(5) PROPERTY AND EQUIPMENT

A summary of property and equipment, at cost, for the years ended December
31, 1995 and 1996 follows:

<TABLE>
<CAPTION>
1995 1996
------- ------
(IN THOUSANDS)
<S> <C> <C>
Machinery, equipment and fixtures......................... $24,845 45,908
Land, building and improvements........................... 10,392 10,947
------- ------
$35,237 56,855
======= ======
</TABLE>

For the years ended December 31, 1995 and 1996, depreciation expense was
$4,714,000 and $7,984,000, respectively.

(6) LONG-TERM DEBT

Long-term debt at December 31, 1995 and 1996 consists of the following:

<TABLE>
<CAPTION>
1995 1996
-------- ---------
(IN THOUSANDS)
<S> <C> <C>
Bank Borrowings(a).................................... $ 84,750 935,401
10 3/8% Subordinated Debentures due 2002(b)........... 182,634 141,734
Other................................................. -- 1,404
-------- ---------
267,384 1,078,539
Less: Current portion................................. -- (563)
-------- ---------
$267,384 1,077,976
======== =========
</TABLE>

- ---------------
(a) On June 13, 1996, the Company and its subsidiaries amended and restated its
existing Credit Agreement to provide for aggregate borrowings of up to
$1,500 million. As of December 31, 1996, the Company had additional
borrowings available under the facility of approximately $565 million.

F-94
<PAGE> 184
INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Under the terms of a Security Agreement among the Company, its subsidiaries
and one of the banks acting as collateral agent, substantially all of the
assets of the Company and its subsidiaries, as well as the stock of the
Company's subsidiaries, are pledged to secure borrowings under the Credit
Agreement.

The Credit Agreement provides for quarterly principal payments beginning
September 1999, and also permits voluntary prepayments in whole or in part
at any time.

Under the Credit Agreement, interest is payable quarterly, based on the (i)
prime rate or (ii) London Interbank Offer Rate.

In the normal course of business, the Company enters into a variety of
interest rate protection agreements, options and swaps in order to limit its
exposure due to adverse fluctuations in interest rates. These instruments
are executed with creditworthy financial institutions. As a matter of policy
the Company does not engage in derivatives trading. Generally, payments and
receipts associated with financial instruments used to manage interest rate
risk are recognized along with the effects of associated transactions. As of
December 31, 1996, the Company has entered into various interest rate
protection agreements under which the Company's interest rate on $55 million
of borrowings under the Credit Agreement is fixed at between 6.85% and 7.0%
per annum, plus applicable margin. These agreements expire on various dates
ranging from April 1997 to July 2000.

(b) At December 31, 1996, the fair value of the Company's 10 3/8% Senior
Subordinated Notes was estimated to be $149,090,000, based on the quoted
market prices for the same issue.

During 1995 and 1996, the Company redeemed a face amount of $17,366,000 and
$40,900,000, respectively, of its 10 3/8 Senior Subordinated Notes.

The scheduled maturities of long-term debt for the next five years and
after are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, AMOUNT
------------------------ --------------
(IN THOUSANDS)
<S> <C>
1997................................................. $ 563
1998................................................. 638
1999................................................. 150,207
2000................................................. 225,068
2001................................................. 300,000
After 2001........................................... 402,063
----------
$1,078,539
==========
</TABLE>

For the years ended 1995 and 1996, the Company paid cash for interest of
$44,802,000 and $63,090,000, respectively.

During 1995, the Company registered with the Securities and Exchange
Commission, pursuant to a shelf registration statement, $500 million in
aggregate principal amount of its debt securities.

(7) EMPLOYEE AND OTHER POSTRETIREMENT BENEFIT PLANS

The Company and its subsidiaries have qualified 401(k) profit sharing plans
covering substantially all of its non-union full-time employees. For the years
ended December 31, 1995 and 1996, contributions to these plans by the Company
were de minimus.

The Company does not provide any postretirement health care and life
insurance benefits to its employees and, accordingly, has no liabilities for
such benefits.

F-95
<PAGE> 185
INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(8) INCOME TAXES

The provision for income taxes for the years ended December 31, 1995 and
1996 is as follows:

<TABLE>
<CAPTION>
1995 1996
------ ------
(IN THOUSANDS)
<S> <C> <C>
Current:
Federal.................................................. $ -- 18,894
State and local.......................................... 1,588 2,840
Foreign.................................................. -- 4,620
------ ------
Total current income tax expense................. 1,588 26,354
Deferred income tax expense................................ -- 1,149
------ ------
$1,588 27,503
====== ======
</TABLE>

No federal income taxes were provided in 1995 as a result of available net
loss carryforwards.

The Company had pre-tax income from foreign operations in 1996 of
approximately $12 million. Pre-tax income from domestic operations was
approximately $56 million and $41 million in 1995 and 1996, respectively.

Temporary differences which give rise to the deferred tax liabilities at
December 31, 1996 primarily relate to intangibles acquired as part of the TDI
and Granum stock acquisitions. Additionally, the value of the deferred tax asset
resulting from net operating loss carryforwards is offset by a valuation
allowance of equal amount.

The Company's income tax expense for the year ended December 31, 1996
differs from the expense that would have resulted from applying the federal
statutory rates during that period to income before income tax expense. The
reasons for these differences are explained in the following table:

<TABLE>
<CAPTION>
1996
--------------
(IN THOUSANDS)
<S> <C>
Expense based upon federal statutory rate of 35%............ $18,687
Amortization of goodwill.................................... 5,422
State and local taxes, net of federal benefit............... 1,846
Nondeductible expenses...................................... 5,635
Utilization of net operating loss........................... (4,936)
Other, net.................................................. 849
-------
Income tax expense.......................................... $27,503
=======
</TABLE>

At December 31, 1996, the Company had available net operating loss
carryforwards of approximately $67 million which will expire from 2004 to 2009.
Approximately $34 million and $26 million of the net operating loss
carryforwards relate to benefits arising from exercise of stock options and
acquisitions, respectively. These amounts will be reflected as credits to
additional paid in capital ($12 mil) and goodwill ($9 mil) when they are
ultimately utilized. During 1996, the tax effect of utilizing net operating loss
carryforwards arising from acquisitions was reflected as a credit to goodwill in
the amount of $7,123,000.

For the years ended December 31, 1995 and 1996, the Company paid cash for
income taxes of $3,620,000 and $10,338,000, respectively.

F-96
<PAGE> 186
INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(9) EMPLOYEE STOCK PLANS

Employee Stock Option Plan

The Company's 1988 Employee Stock Option Plan as amended provides for a
grant of options to purchase 10,494,788 shares of the Company's Class A Common
Stock and 1,771,875 shares of Class B Common Stock. The options are exercisable
in equal amounts generally over five years from the date of the grant. At
December 31, 1996, options for approximately 9,500,000 shares of Class A Common
Stock had been cumulatively granted and options for 3,838,900 shares were
exercisable.

Employee Deferred Share Plan

The Deferred Share Plan permits the grant of up to 541,443 Class A Deferred
Shares and 1,761,681 Class B Deferred Shares to executives or other key
employees of the Company.

The following is a table summarizing the changes during the years ended
December 31, 1995 and 1996 in options and deferred shares outstanding:

<TABLE>
<CAPTION>
CLASS A COMMON STOCK
---------------------------------------------
DEFERRED EXERCISE WEIGHTED AVERAGE
SHARES AND PRICE PER EXERCISE PRICE
OPTIONS SHARE PER SHARE
---------- ------------ ----------------
<S> <C> <C> <C>
Outstanding as of December 31,
1994............................... 7,237,937 $ .002-12.67 6.63
Granted/Issued....................... -- --
Canceled............................. (65,813) 3.90-11.55 7.73
Exercised............................ (335,528) .06-12.45 2.79
--------- ------------ -----
Total outstanding as of
December 31, 1995........ 6,836,596 6.81
---------
Granted/Issued....................... 1,712,528 23.50-33.63 25.70
Canceled............................. -- --
Exercised............................ (581,053) .002-12.45 3.51
--------- ------------ -----
Total outstanding as of
December 31, 1996........ 7,968,071 11.11
=========
</TABLE>

At December 31, 1996, the range of exercise prices was $.06-$33.63 and the
weighted-average remaining contractual lives of outstanding options was 7 years.

During 1988, the Company issued options with an exercise price of $0.12 per
share to an officer of the Company to purchase 4,742,996 shares of the Company's
Class B Common Stock. Through the year ended December 31, 1995 and during 1996,
options to purchase 379,556 and 750,000 shares, respectively, were exercised.

In addition, the Company issued 265,689 options and 29,705 deferred shares
in 1995 and 770,166 options and 8,282 deferred shares in 1996 to purchase shares
of Class B Common Stock at an exercise price per share of $14.05, $.002, $27.58
and $.002 per share, respectively. As of December 31, 1996, 1,457,370 and 37,987
of such options and deferred shares, respectively, were outstanding.

The per share weighted-average fair value of stock options granted during
1995 and 1996 was $7.72 and $13.86, respectively, on the date of the grant using
the Black Scholes option-pricing model with the following weighted-average
assumptions: expected volatility of 35.14% in 1995 and 38.33% in 1996, expected
dividend

F-97
<PAGE> 187
INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

yield of zero percent, risk-free interest rate of 6.24% in 1995 and 6.27% in
1996 and an expected life of 7 years in both 1995 and 1996.

The Company applies APB Opinion No. 25 in recording the value of stock
options granted pursuant to its plans. No compensation cost has been recognized
for stock options granted under the Company's Plans. Had the Company determined
compensation cost based on the fair value at the grant date for its stock
options under SFAS No. 123, the Company's net income would have decreased to the
pro forma amounts indicated below:

<TABLE>
<CAPTION>
1995 1996
------- ------
(IN THOUSANDS)
<S> <C> <C>
Net income:
As reported............................................. $54,503 25,889
Pro forma............................................... 54,207 21,085
</TABLE>

Pro forma net income reflects only options granted under the Company Plans
in 1995 and 1996. Therefore, the full impact of calculating compensation cost
for stock options under SFAS No. 123 is not reflected in the pro forma net
income amounts presented above because compensation cost is reflected over the
options' vesting period of 5 years and compensation cost for options granted
prior to January 1, 1995 is not considered.

(10) STOCKHOLDERS' EQUITY

Each share of Class A Common Stock and each share of Class C Common Stock
is entitled to one vote per share. Each Share of Class B Common Stock is
generally entitled to ten votes per share. Shares of Class B Common Stock and
Class C Common Stock, at the option of the holder, may be converted at any time
into an equal number of shares of Class A Common Stock. Each share of Class B
Common Stock and Class C Common Stock automatically converts into one share of
Class A Common Stock upon the sale, gift or other transfer of such share to any
person other than an associate of the Company (as defined) and upon certain
other events. On October 4, 1996, the Class C Common Stockholders converted all
shares into Class A Common Stock.

The Company has reserved 72,989 shares of Class A Common Stock, with an
exercise price of $.001 and 20,104,934 shares of Class C Common Stock with an
exercise price of $.001 for issuance upon the exercise of certain warrants and
options outstanding as of December 31, 1996.

(11) RELATED PARTY TRANSACTIONS

Several of the Company's radio stations are affiliated with Westwood One's
radio network and the Company sells several programs to Westwood One. During
1995 and 1996, the Company earned revenue related to such transactions
aggregating approximately $14,657,000 and $17,700,000 respectively.

In addition, as of December 31, 1995 and 1996, the Company had accounts
receivable from Westwood One amounting to approximately $6,179,000 and
$7,780,000, respectively.

(12) COMMITMENTS AND CONTINGENCIES

The Company and its subsidiaries occupy certain office space and
transmitting facilities under lease agreements expiring at various dates through
2008. Management expects that in the normal course of business, leases that
expire will be renewed or replaced by other leases. Most leases provide for
escalation of rent based on increases in the Consumer Price Index and/or real
estate taxes.

F-98
<PAGE> 188
INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following is a summary of the future minimum rental commitments under
existing leases:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, TOTAL
- ------------------------ --------------
(IN THOUSANDS)
<S> <C>
1997................................................. $15,431
1998................................................. 12,440
1999................................................. 10,698
2000................................................. 8,820
2001................................................. 7,749
After 2001........................................... 12,456
-------
$67,594
=======
</TABLE>

Rent expense applicable to such leases amounted to approximately $4,363,000
and $6,360,348 for the years ended December 31, 1995 and 1996, respectively.

At December 31, 1996, the Company is committed to the purchase of broadcast
rights for various sports events and other programming including on-air talent,
aggregating approximately $155 million. The aggregate payments related to these
commitments are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, TOTAL
- ------------------------ --------------
(IN THOUSANDS)
<S> <C>
1997........................................................ $ 53,560
1998........................................................ 37,500
1999........................................................ 33,616
2000........................................................ 29,243
2001........................................................ 1,021
--------
$154,940
========
</TABLE>

Guaranteed Franchise Payments

The Company's outdoor advertising business has franchise rights entitling
it to display advertising on such media as buses, taxis, trains, bus shelters,
terminals, billboards, and phone kiosks. Under most of these franchise
agreements, the franchiser is entitled to receive the greater of a percentage of
the relevant advertising revenues, net of advertising agency fees, or a
specified guaranteed minimum annual payment. At December 31, 1996, the future
minimum franchise payments are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, TOTAL
------------------------ --------------
(IN THOUSANDS)
<S> <C>
1997................................................. $119,645
1998................................................. 106,401
1999................................................. 96,718
2000................................................. 59,438
2001................................................. 17,435
After 2001........................................... 9,531
--------
Total guaranteed franchise payments............... $409,168
========
</TABLE>

Franchise costs totaled $127 million in 1996.

F-99
<PAGE> 189
INFINITY MEDIA CORPORATION
(FORMERLY INFINITY BROADCASTING CORPORATION)
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(13) INTANGIBLE AND OTHER ASSETS

Intangible assets at cost, as of December 31, 1995 and 1996, include:

<TABLE>
<CAPTION>
1995 1996
-------- ---------
(IN THOUSANDS)
<S> <C> <C>
FCC licenses.......................................... $370,394 727,276
Franchise costs....................................... -- 276,700
Goodwill.............................................. 152,724 591,334
Covenants not to compete.............................. 45,000 45,000
Favorable leasehold interest.......................... 30,260 30,260
-------- ---------
$598,378 1,670,570
======== =========
</TABLE>

For the years ended December 31, 1995 and 1996, amortization expense was
$45,768,000 and $88,072,000, respectively.

Other assets include principally deferred financing costs and are amortized
over the term of the financing.

(14) SUBSEQUENT EVENT

Effective October 29, 1998, the Company changed its name from Infinity
Broadcasting Corporation to Infinity Media Corporation.

F-100
<PAGE> 190

------------------------------------------------------
------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE CLASS A COMMON STOCK IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary......................... 1
Risk Factors............................... 8
Use of Proceeds............................ 16
Dividend Policy............................ 16
Dilution................................... 17
Capitalization............................. 18
Selected Combined and Pro Forma Financial
Data..................................... 19
Unaudited Combined Pro Forma Financial
Information.............................. 21
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 25
Business................................... 32
Management................................. 48
Principal Stockholder and Stock
Ownership................................ 56
Relationships Between the Company and
CBS...................................... 57
Description of Capital Stock............... 64
Certain Provisions of the Certificate of
Incorporation and By-Laws of the
Company.................................. 67
Description of Indebtedness................ 72
Shares Eligible for Future Sale............ 76
United States Tax Consequences to
Non-United States Holders................ 77
Underwriting............................... 79
Legal Matters.............................. 82
Experts.................................... 82
Available Information...................... 83
Index to Financial Statements.............. F-1
</TABLE>

UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE CLASS A COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------

135,000,000 SHARES

INFINITY LOGO

INFINITY

BROADCASTING
CORPORATION

CLASS A COMMON STOCK

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

MERRILL LYNCH & CO.
BT ALEX. BROWN
GOLDMAN, SACHS & CO.
ALLEN & COMPANY INCORPORATED
CREDIT SUISSE FIRST BOSTON
DONALDSON, LUFKIN & JENRETTE
LEHMAN BROTHERS
MORGAN STANLEY DEAN WITTER
NATIONSBANC MONTGOMERY SECURITIES LLC
SALOMON SMITH BARNEY
BEAR, STEARNS & CO. INC.
DEUTSCHE BANK SECURITIES
ING BARING FURMAN SELZ LLC
LAZARD FRERES & CO. LLC
PAINEWEBBER INCORPORATED
SANFORD C. BERNSTEIN & CO., INC.
SCHRODER & CO. INC.
SG COWEN

ABN AMRO ROTHSCHILD

A DIVISION OF ABN AMRO INCORPORATED

BANCBOSTON ROBERTSON STEPHENS

CHASE SECURITIES INC.

J.P. MORGAN & CO.

WASSERSTEIN PERELLA SECURITIES, INC.

, 1998
------------------------------------------------------
------------------------------------------------------
<PAGE> 191

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED NOVEMBER 12, 1998
PROSPECTUS
135,000,000 SHARES

INFINITY LOGO

INFINITY BROADCASTING CORPORATION

CLASS A COMMON STOCK
------------------------

All of the shares of Class A Common Stock, par value $.01 per share, offered
hereby are being sold by Infinity Broadcasting Corporation (the "Company"). Of
the 135,000,000 shares of Class A Common Stock offered hereby, 20,250,000 shares
are being offered for sale initially outside the United States and Canada (the
"International Offering") by the International Managers and 114,750,000 shares
are being offered for sale initially in a concurrent offering in the United
States and Canada (the "U.S. Offering" and, together with the International
Offering, the "Offerings") by the U.S. Underwriters (collectively with the
International Managers, the "Underwriters"). The initial public offering price
and the underwriting discount per share will be identical for both Offerings.
See "Underwriting."

The Class A Common Stock has been approved for listing on the New York Stock
Exchange under the symbol "INF," subject to official notice of issuance.

(continued on page i)

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN MATERIAL
RISK FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE CLASS A
COMMON STOCK OFFERED HEREBY.

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

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.............................. $ $ $
- ------------------------------------------------------------------------------------------------------------------
Total(3)............................... $ $ $
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

(2) Before deducting expenses payable by the Company estimated at $ .

(3) The Company has granted the International Managers and the U.S. Underwriters
options to purchase up to an additional 3,037,500 and 17,212,500 shares of
Class A Common Stock, respectively, in each case, exercisable within 30 days
after the date hereof, solely to cover over-allotments, if any. If such
options are exercised in full, the total Price to Public, Underwriting
Discount and Proceeds to Company will be $ , $ and
$ , respectively. See "Underwriting."

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

MERRILL LYNCH INTERNATIONAL

BT ALEX. BROWN INTERNATIONAL GOLDMAN SACHS INTERNATIONAL

ALLEN & COMPANY INCORPORATED CREDIT SUISSE FIRST BOSTON

DONALDSON, LUFKIN & JENRETTE LEHMAN BROTHERS MORGAN STANLEY DEAN WITTER

NATIONSBANC MONTGOMERY SECURITIES LLC SALOMON SMITH BARNEY INTERNATIONAL

BEAR, STEARNS INTERNATIONAL LIMITED DEUTSCHE BANK ING BARINGS LAZARD CAPITAL
MARKETS
PAINEWEBBER INTERNATIONAL SANFORD C. BERNSTEIN & CO.,
INC. SCHRODERS SG COWEN INTERNATIONAL

ABN AMRO ROTHSCHILD BANCBOSTON ROBERTSON STEPHENS CHASE SECURITIES INC.

J.P. MORGAN SECURITIES LTD. WASSERSTEIN PERELLA SECURITIES, INC.

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

The date of this Prospectus is , 1998.
<PAGE> 192

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

UNDERWRITING

Merrill Lynch International is acting as the lead manager (the "Lead
Manager") for each of the International Managers named below (the "International
Managers"). Subject to the terms and conditions set forth in an international
purchase agreement (the "International Purchase Agreement") among the Company
and the International Managers, and concurrently with the sale of 114,750,000
shares of Class A Common Stock to the U.S. Underwriters (as defined below), the
Company has agreed to sell to the International Managers, and each of the
International Managers severally and not jointly has agreed to purchase from the
Company, the aggregate number of shares of Class A Common Stock set forth
opposite its name below.

<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL MANAGERS SHARES
---------------------- -----------
<S> <C> <C>
Merrill Lynch International.....................................
BT Alex. Brown International....................................
Goldman Sachs International.....................................
Allen & Company Incorporated....................................
Credit Suisse First Boston (Europe) Limited.....................
Donaldson, Lufkin & Jenrette International......................
Lehman Brothers International (Europe)..........................
Morgan Stanley & Co. International Limited......................
NationsBanc Montgomery Securities LLC...........................
Salomon Brothers International Limited..........................
Bear, Stearns International Limited.............................
Deutsche Bank AG London.........................................
ING Barings.....................................................
Lazard Capital Markets..........................................
PaineWebber International (U.K.) Ltd. ..........................
Sanford C. Bernstein & Co., Inc. ...............................
J. Henry Schroder & Co. Limited.................................
SG Cowen International L.P. ....................................
ABN AMRO Rothschild.............................................
BancBoston Robertson Stephens Inc. .............................
Chase Securities Inc. ..........................................
J.P. Morgan Securities Ltd. ....................................
Wasserstein Perella Securities, Inc. ...........................
-----------
Total.............................................. 20,250,000
===========
</TABLE>

The Company has also entered into a U.S. purchase agreement (the "U.S.
Purchase Agreement" and, together with the International Purchase Agreement, the
"Purchase Agreements") with certain underwriters in the United States and Canada
(the "U.S. Underwriters" and, together with the International Managers, the
"Underwriters"), for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") is acting as the representative (the "U.S. Representative").
Subject to the terms and conditions set forth in the U.S. Purchase Agreement,
and concurrently with the sale of 20,250,000 shares of Class A Common Stock to
the International Managers pursuant to the International Purchase Agreement, the
Company has agreed to sell to the U.S. Underwriters, and each of the U.S.
Underwriters severally and not jointly has agreed to purchase from the Company,
an aggregate of 114,750,000 shares of Class A Common Stock. The initial public
offering price per share of Class A Common Stock and the total underwriting
discount per share of Class A Common Stock are identical under the International
Purchase Agreement and the U.S. Purchase Agreement.

In the International Purchase Agreement and the U.S. Purchase Agreement,
the several International Managers and the several U.S. Underwriters,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of the Class A Common Stock being sold
pursuant to each such Purchase Agreement if any of the shares of Class A Common
Stock being sold pursuant to each such Purchase Agreement are purchased. Under
certain circumstances under the Purchase Agreements, the commitments of
non-defaulting Underwriters may be increased. The closings with respect to the
sale of shares
ALT-1
<PAGE> 193

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

of Class A Common Stock to be purchased by the International Managers and the
U.S. Underwriters are conditioned upon one another.

The Lead Manager has advised the Company that the International Managers
propose initially to offer the shares of Class A Common Stock to the public at
the initial public offering price set forth on the cover page of this
Prospectus, and to certain dealers at such price less a concession not in excess
of $ per share of Class A Common Stock. The International Managers may
allow, and such dealers may reallow, a discount not in excess of $ per share
of Class A Common Stock on sales to certain other dealers. After the initial
public offering, the public offering price, concession and discount may be
changed.

The Company has granted an option to the International Managers,
exercisable for 30 days after the date of this Prospectus, to purchase up to an
aggregate of 3,037,500 additional shares of Class A Common Stock at the initial
public offering price set forth on the cover page of this Prospectus, less the
underwriting discount. The International Managers may exercise this option
solely to cover over-allotments, if any, made on the sale of the Class A Common
Stock offered hereby. To the extent that the International Managers exercise
this option, each International Manager will be obligated, subject to certain
conditions, to purchase a number of additional shares of the Class A Common
Stock proportionate to such International Manager's initial amount reflected in
the foregoing table. The Company has also granted an option to the U.S.
Underwriters, exercisable for 30 days after the date of this Prospectus, to
purchase up to an aggregate of 17,212,500 additional shares of Class A Common
Stock to cover over-allotments, if any, on terms similar to those granted to the
International Managers.

The International Managers and the U.S. Underwriters have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Pursuant to the Intersyndicate Agreement, the
International Managers and the U.S. Underwriters are permitted to sell shares of
Class A Common Stock to each other for purposes of resale at the initial public
offering price, less an amount not greater than the selling concession. Under
the terms of the Intersyndicate Agreement, the U.S. Underwriters and any dealer
to whom they sell shares of Class A Common Stock will not offer to sell or sell

ALT-2
<PAGE> 194

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

shares of Class A Common Stock to persons who are non-U.S. or non-Canadian
persons or to persons they believe intend to resell to persons who are non-U.S.
or non-Canadian persons, and the International Managers and any dealer to whom
they sell shares of Class A Common Stock will not offer to sell or sell shares
of Class A Common Stock to U.S. persons or to Canadian persons or to persons
they believe intend to resell to U.S. persons or to Canadian persons, except in
the case of transactions pursuant to the Intersyndicate Agreement.

ALT-3
<PAGE> 195

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

Class A Common Stock. In addition, neither the Company nor any of the
Underwriters makes any representation that the U.S. Representative or the Lead
Manager will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.

Each International Manager has agreed that: (i) it has not offered or sold
and, prior to the expiration of the period of six months from the Closing Date,
will not offer or sell any shares of Class A Common Stock to persons in the
United Kingdom, except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which do not
constitute an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (ii) it has complied and will
comply with all applicable provisions of the Financial Services Act 1986 with
respect to anything done by it in relation to the Class A Common Stock in, from
or otherwise involving the United Kingdom; and (iii) it has only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issuance of Common Stock to a person who
is of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.

No action has been or will be taken in any jurisdiction (except in the
United States) that would permit a public offering of the shares of Class A
Common Stock, or the possession, circulation or distribution of this Prospectus
or any other material relating to the Company or shares of Class A Common Stock
in any jurisdiction where action for that purpose is required. Accordingly, the
shares of Class A Common Stock may not be offered or sold, directly or
indirectly, and neither this Prospectus nor any other offering material or
advertisements in connection with the shares of Class A Common stock may be
distributed or published, in or from any country or jurisdiction except in
compliance with any applicable rules and regulations of any such country or
jurisdiction.

Purchasers of the shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the offering price set forth on the cover page hereof.

Certain of the Underwriters or their affiliates from time to time provided
investment banking financial advisory, general financing and banking services to
the Company, CBS Corporation and their respective affiliates, for which they
have received customary compensation, and may continue to do so in the future.
William H. Gray, III, a director of CBS Corporation, is a director of The Chase
Manhattan Corporation and The Chase Manhattan Bank, which are affiliates of
Chase Securities Inc., one of the International Managers.

Certain affiliates of the International Managers are lenders to CBS under
the CBS Credit Agreement. In the event that CBS uses amounts paid to it by the
Company in repayment of the CBS Note to repay amounts outstanding under the CBS
Credit Agreement, affiliates of members of the National Association of
Securities Dealers, Inc. ("NASD") participating in the distribution of the Class
A Common Stock in the Offerings may receive an amount greater than 10% of the
net proceeds of the Offerings. Accordingly, the underwriting arrangements for
the Offerings will be made in compliance with Rule 2710(c)(8) of the Conduct
Rules of the NASD.

ALT-4
<PAGE> 196

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

LEGAL MATTERS

EXPERTS

AVAILABLE INFORMATION

ALT-5
<PAGE> 197

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

Statement, including exhibits and schedules thereto, may be inspected without
charge at the Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies of all or any part thereof may be obtained
from such office after payment of fees prescribed by the Commission. The public
may obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. Electronic filings made by the Company through the
Commission's Electronic Data Gathering, Analysis and Retrieval System are
publicly available through the Commission's World Wide Web site
(http://www.sec.gov), which contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission, including the Company. Upon listing on the NYSE (for which
application will be made), reports and other information concerning the Company
can also be inspected at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.

ALT-6
<PAGE> 198

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary......................... 1
Risk Factors............................... 8
Use of Proceeds............................ 16
Dividend Policy............................ 16
Dilution................................... 17
Capitalization............................. 18
Selected Combined and Pro Forma Financial
Data..................................... 19
Unaudited Combined Pro Forma Financial
Information.............................. 21
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 25
Business................................... 32
Management................................. 48
Principal Stockholder and Stock
Ownership................................ 56
Relationships Between the Company and
CBS...................................... 57
Description of Capital Stock............... 64
Certain Provisions of the Certificate of
Incorporation and By-Laws of the
Company.................................. 67
Description of Indebtedness................ 72
Shares Eligible for Future Sale............ 76
United States Tax Consequences to
Non-United States Holders................ 77
Underwriting............................... 79
Legal Matters.............................. 83
Experts.................................... 83
Available Information...................... 83
Index to Financial Statements.............. F-1
</TABLE>

135,000,000 SHARES

INFINITY LOGO

INFINITY
BROADCASTING
CORPORATION

CLASS A COMMON STOCK

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

MERRILL LYNCH INTERNATIONAL

BT ALEX. BROWN INTERNATIONAL

GOLDMAN SACHS INTERNATIONAL

ALLEN & COMPANY INCORPORATED
CREDIT SUISSE FIRST BOSTON
DONALDSON, LUFKIN & JENRETTE
LEHMAN BROTHERS

MORGAN STANLEY DEAN WITTER

NATIONSBANC MONTGOMERY SECURITIES LLC

SALOMON SMITH BARNEY INTERNATIONAL

BEAR, STEARNS INTERNATIONAL LIMITED

DEUTSCHE BANK

ING BARINGS

LAZARD CAPITAL MARKETS

PAINEWEBBER INTERNATIONAL

SANFORD C. BERNSTEIN & CO., INC.

SCHRODERS

SG COWEN INTERNATIONAL

ABN AMRO ROTHSCHILD

BANCBOSTON ROBERTSON STEPHENS
CHASE SECURITIES INC.

J.P. MORGAN SECURITIES LTD.

WASSERSTEIN PERELLA SECURITIES, INC.

, 1998
------------------------------------------------------
------------------------------------------------------
<PAGE> 199

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following is an itemization of all expenses (subject to future
contingencies) incurred or expected to be incurred by the Company in connection
with the issuance and distribution of the securities being offered hereby:

<TABLE>
<S> <C>
SEC Registration Fee........................................ $949,679
NASD Filing Fee............................................. 30,500
New York Stock Exchange Listing Fee......................... *
Legal Fees and Expenses..................................... *
Blue Sky Fees and expenses (including counsel fees)......... *
Accounting Fees and Expenses................................ *
Transfer Agent and Registrar Fees........................... *
Printing and Engraving Expenses............................. *
Underwriting Expense Allowance.............................. *
Miscellaneous Expense....................................... *
--------
Total............................................. $
========
</TABLE>

- ---------------
* To be furnished by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company is incorporated under the laws of the State of Delaware.
Section 145 of the General Corporation Law of the State of Delaware ("Section
145") provides that a Delaware corporation may indemnify any persons who are, or
are threatened to be made, parties to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation), by
reason of the fact that such person is or was an officer, director, employee or
agent of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation or
enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding, provided such
person acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the corporation's best interests and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that his or
her conduct was illegal. A Delaware corporation may indemnify any persons who
are, or are threatened to be made, a party to any threatened, pending or
completed action or suit by or in the right of the corporation by reason of the
fact that such person was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit, provided such person acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the corporation's best
interests except that no indemnification is permitted without judicial approval
if the officer or director is adjudged to be liable to the corporation. Where an
officer or director is successful on the merits or otherwise in the defense of
any action referred to above, the corporation must indemnify him or her against
the expenses which such officer or director has actually and reasonably
incurred.

Section 145 further provides that the indemnification provisions of Section
145 shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office. The certificate of incorporation

II-1
<PAGE> 200

of the Company provides that, to the fullest extent permitted by the General
Corporation Law of the State of Delaware, no director of the Company shall be
liable to the Company or its stockholders for monetary damages arising from a
breach of such director's fiduciary duty owed to the Company or its
stockholders, other than liability for (i) any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) acts or omissions not in good
faith or involving intentional misconduct or (iii) any transaction from which
the director derived an improper personal benefit. The by-laws of the Company
provide that the Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (including, under certain circumstances, an action by or in
the right of the Company), by reason of the fact that he is or was a director,
officer, employee or agent of the Company. Such indemnity provides for
reimbursement of expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such action, suit or proceeding if the party to be indemnified acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company. With respect to any criminal action or proceeding,
such indemnification will be available if the party to be indemnified had no
reasonable cause to believe his conduct was unlawful. Any such indemnification
shall be made by the Company only as specifically authorized upon a
determination by a majority of a quorum of disinterested directors, by
independent legal counsel or by the stockholders that indemnification is proper
in the circumstances because the party to be indemnified has met the applicable
standard of conduct set forth in the indemnification provisions of the by-laws.
To the extent, however, that a director, officer, employee or agent of the
Company has been successful on the merits or otherwise in defense of any action,
suit or proceeding described above, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith, without the necessity of specific authorization.

Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him or her and incurred by him or her in
any such capacity, arising out of his or her status as such, whether or not the
corporation would otherwise have the power to indemnify him or her under Section
145.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since the Company's inception, the Company has not sold any unregistered
securities.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits:

II-2
<PAGE> 201

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
1. UNDERWRITING AGREEMENTS.
**1.1 Form of U.S. Purchase Agreement.
**1.2 Form of International Purchase Agreement.
2. PLANS OF ACQUISITION.
2.1 Agreement and Plan of Merger, dated August 1, 1995, among
Westinghouse Electric Corporation, Group W Acquisition Corp.
and CBS Inc., is incorporated herein by reference to Exhibit
2 to the report on Form 8-K of CBS Inc. filed with the
Securities and Exchange Commission on August 4, 1995.
2.2 Agreement and Plan of Merger, as amended, dated June 20,
1996, among Westinghouse Electric Corporation, R Acquisition
Corp. and Infinity Broadcasting Corporation, is incorporated
herein by reference to Annex I to the Westinghouse Electric
Corporation's Registration Statement No. 333-13219 on Form
S-4 filed with the Securities and Exchange Commission on
October 22, 1996.
2.3 Amended and Restated Agreement and Plan of Merger, dated
December 18, 1997, by and among American Radio Systems
Corporation, CBS Corporation and R Acquisition Corp., is
incorporated herein by reference to Exhibit 2.1 to the
report on Form 8-K of CBS Corporation filed with the
Securities and Exchange Commission on January 7, 1998.
2.4 First Amendment, dated December 19, 1997, to the Amended and
Restated Agreement and Plan of Merger, dated December 18,
1997, by and among American Radio Systems Corporation, CBS
Corporation and R Acquisition Corp., is incorporated herein
by reference to Exhibit 2.2 to the report on Form 8-K of CBS
Corporation filed with the Securities and Exchange
Commission on January 7, 1998.
3. CERTIFICATE OF INCORPORATION AND BY-LAWS.
**3.1 Certificate of Incorporation of the Registrant.
**3.2 By-Laws of the Registrant.
**3.3 Form of Restated Certificate of Incorporation of the
Registrant.
**3.4 Form of Restated By-Laws of the Registrant.
4. INSTRUMENTS DEFINING THE RIGHT OF SECURITY HOLDERS,
INCLUDING INDENTURES.
**4.1 Specimen Certificate of Class A Common Stock.
**4.2 Specimen Certificate of Class B Common Stock.
5. OPINIONS.
**5.1 Opinion of Cravath, Swaine & Moore with respect to the
legality of the Class A Common Stock.
10. MATERIAL CONTRACTS.
**10.1 Stock and Asset Transfer Agreement between CBS and the
Registrant.
**10.2 Intercompany Agreement between CBS and the Registrant.
**10.3 Tax Sharing Agreement between CBS and the Registrant.
10.4 $4.0 billion Credit Agreement among CBS Corporation, the
Lenders parties thereto, Nationsbank, N.A. and The
Toronto-Dominion Bank as Syndication Agents, The Chase
Manhattan Bank as Documentation Agent, and Morgan Guaranty
Trust Company of New York as Administrative Agent, dated
August 29, 1996, is incorporated herein by reference to
Exhibit 10(1) to the report on Form 10-Q of CBS Corporation
for the quarter ended September 30, 1996.
</TABLE>

II-3
<PAGE> 202

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
10.5 First Amendment, dated January 29, 1997, to the CBS Credit
Agreement, dated August 29, 1996, among CBS Corporation, the
Lenders parties thereto, Nationsbank, N.A. and The
Toronto-Dominion Bank as Syndication Agents, The Chase
Manhattan Bank as Documentation Agent, and Morgan Guaranty
Trust Company of New York as Administrative Agent, is
incorporated herein by reference to Exhibit 10(p) to the
report on Form 10-Q of CBS Corporation for the quarter ended
March 31, 1997.
10.6 Second Amendment, dated March 21, 1997, to the CBS Credit
Agreement, dated August 29, 1996, as amended by the First
Amendment thereto dated January 29, 1997, among CBS
Corporation, the Subsidiary Borrowers parties thereto, the
Lenders parties thereto, Nationsbank, N.A. and The
Toronto-Dominion Bank as Syndication Agents, The Chase
Manhattan Bank as Documentation Agent, and Morgan Guaranty
Trust Company of New York as Administrative Agent, is
incorporated herein by reference to Exhibit 10(q) to the
report on Form 10-Q of CBS Corporation for the quarter ended
March 31, 1997.
10.7 Third Amendment, dated March 3, 1998, to the CBS Credit
Agreement, dated August 29, 1996, as amended by the First
Amendment thereto dated January 29, 1997, as amended by the
Second Amendment thereto dated March 21, 1997 among CBS
Corporation, the Subsidiary Borrowers parties thereto, the
Lenders parties thereto, Nationsbank, N.A. and The
Toronto-Dominion Bank as Syndication Agents, The Chase
Manhattan Bank as Documentation Agent, and Morgan Guaranty
Trust Company of New York as Administration Agent, is
incorporated herein by reference to Exhibit 10(x) to the
report on Form 10-Q of CBS Corporation for the quarter ended
March 31, 1998.
10.8 Employment Agreement, entered into on June 20, 1996 and
effective December 31, 1996, between CBS and Mel Karmazin is
incorporated herein by reference to Exhibit 10(s) to the
report on Form 10-Q of CBS Corporation for the quarter ended
March 31, 1997.
10.9 Employment Agreement, entered into on May 1996, effective
November 28, 1995 and amended January 29, 1997, between CBS
Broadcasting Inc. and Daniel Mason.
**10.10 Employment Agreement, entered into on December 22, 1989, as
amended, between TDI Worldwide, Inc. and William Apfelbaum.
10.11 The CBS 1991 Long-Term Incentive Plan, as amended to January
28, 1998, is incorporated herein by reference to Exhibit
10(g) to the report on Form 10-K of CBS Corporation for the
year ended December 31, 1997.
10.12 The CBS 1993 Long-Term Incentive Plan, as amended to January
28, 1998, is incorporated herein by reference to Exhibit
10(b) to the report on Form 10-K of CBS Corporation for the
year ended December 31, 1997.
**10.13 1998 Long-Term Incentive Plan of the Registrant.
**10.14 Executive Annual Incentive Plan of the Registrant.
10.15 The CBS Annual Performance Plan, as amended to November 1,
1996, is incorporated herein by reference to Exhibit 10(a)
to the report on Form 10-Q of CBS Corporation for the
quarter ended September 30, 1996.
10.16 The Westinghouse Executive Pension Plan, as amended to
December 1, 1997, is incorporated herein by reference to
Exhibit 10(d) to the report on Form 10-K of CBS Corporation
for the year ended December 31, 1997.
10.17 The CBS 1998 Executive Annual Incentive Plan is incorporated
herein by reference to Exhibit A to the Proxy Statement of
CBS Corporation dated May 6, 1998.
</TABLE>

II-4
<PAGE> 203

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
10.18 The amended and restated Infinity Broadcasting Corporation
Stock Option Plan is incorporated herein by reference to
Exhibit 4.4 to the CBS Corporation's Registration Statement
No. 333-13219 on Post-Effective Amendment No. 1 on Form S-8
to Form S-4 filed with the Securities and Exchange
Commission on January 2, 1997.
10.19 Infinity Broadcasting Corporation Warrant Certificate No. 3
to Mel Karmazin is incorporated herein by reference to
Exhibit 4.6 to the CBS Corporation's Registration Statement
No. 333-13219 on Post-Effective Amendment No. 1 on Form S-8
to Form S-4 filed with the Securities and Exchange
Commission on January 2, 1997.
21. SUBSIDIARIES.
*21.1 Subsidiaries of the Registrant.
23. CONSENTS OF EXPERTS AND COUNSEL.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
**23.4 Consent of Cravath, Swaine & Moore (included in Exhibit
5.1).
24. POWERS OF ATTORNEY.
24.1 Power of Attorney of Mel Karmazin.
24.2 Power of Attorney of Farid Suleman.
27. FINANCIAL DATA SCHEDULE.
27.1 Financial Data Schedule.
</TABLE>

- ---------------
* Filed herewith.

** To be filed by amendment.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

(3) It will provide to the underwriters at the closing specified in
the underwriting agreements certificates in such denominations and
registered in such names as required by the underwriters to permit prompt
delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person

II-5
<PAGE> 204

in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

II-6
<PAGE> 205

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 3 to this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on November 12, 1998.

INFINITY BROADCASTING CORPORATION

By: /s/ FARID SULEMAN
------------------------------------
Farid Suleman

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 to this Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates stated below.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>

* Chairman, President and Chief November 12, 1998
- --------------------------------------------------- Executive Officer (Principal
Mel Karmazin Executive Officer) and
Director

* Executive Vice President, November 12, 1998
- --------------------------------------------------- Chief Financial Officer,
Farid Suleman Treasurer and Secretary
(Principal Financial and
Accounting Officer) and
Director

*By /s/ FARID SULEMAN
----------------------------------------------
Farid Suleman
Attorney-In-Fact
</TABLE>

II-7
<PAGE> 206

INFINITY BROADCASTING CORPORATION
SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

<TABLE>
<CAPTION>
ADDITIONS
----------------------------------------
BALANCE AT CHARGED TO CHARGED INCREASE BALANCE
BEGINNING COSTS AND TO OTHER RESULTING FROM AT END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS ACQUISITIONS DEDUCTIONS(1) PERIOD
- ----------- ---------- ---------- -------- -------------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
1995
Allowance for doubtful
accounts....................... $1,834 $ 734 -- $2,717(2) $ (953) $4,332
1996
Allowance for doubtful
accounts....................... 4,332 2,398 -- 7,722(3) (3,035) 11,417
1997
Allowance for doubtful
accounts....................... 11,417 10,382 -- -- (6,713) 15,086
</TABLE>

- ---------------
(1) Represents amounts written off.

(2) Relates to the acquisition of CBS Inc. on November 24, 1995.

(3) Relates to the acquisition of Old Infinity on December 31, 1996.
<PAGE> 207

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ----------- ------------
<C> <S> <C>
1. UNDERWRITING AGREEMENTS.
**1.1 Form of U.S. Purchase Agreement.
**1.2 Form of International Purchase Agreement.
2. PLANS OF ACQUISITION.
2.1 Agreement and Plan of Merger, dated August 1, 1995, among
Westinghouse Electric Corporation, Group W Acquisition Corp.
and CBS Inc., is incorporated herein by reference to Exhibit
2 to the report on Form 8-K of CBS Inc. filed with the
Securities and Exchange Commission on August 4, 1995.
2.2 Agreement and Plan of Merger, as amended, dated June 20,
1996, among Westinghouse Electric Corporation, R Acquisition
Corp. and Infinity Broadcasting Corporation, is incorporated
herein by reference to Annex I to the Westinghouse Electric
Corporation's Registration Statement No. 333-13219 on Form
S-4 filed with the Securities and Exchange Commission on
October 22, 1996.
2.3 Amended and Restated Agreement and Plan of Merger, dated
December 18, 1997, by and among American Radio Systems
Corporation, CBS Corporation and R Acquisition Corp., is
incorporated herein by reference to Exhibit 2.1 to the
report on Form 8-K of CBS Corporation filed with the
Securities and Exchange Commission on January 7, 1998.
2.4 First Amendment, dated December 19, 1997, to the Amended and
Restated Agreement and Plan of Merger, dated December 18,
1997, by and among American Radio Systems Corporation, CBS
Corporation and R Acquisition Corp., is incorporated herein
by reference to Exhibit 2.2 to the report on Form 8-K of CBS
Corporation filed with the Securities and Exchange
Commission on January 7, 1998.
3. CERTIFICATE OF INCORPORATION AND BY-LAWS.
**3.1 Certificate of Incorporation of the Registrant.
**3.2 By-Laws of the Registrant.
**3.3 Form of Restated Certificate of Incorporation of the
Registrant.
**3.4 Form of Restated By-Laws of the Registrant.
4. INSTRUMENTS DEFINING THE RIGHT OF SECURITY HOLDERS,
INCLUDING INDENTURES.
**4.1 Specimen Certificate of Class A Common Stock.
**4.2 Specimen Certificate of Class B Common Stock.
5. OPINIONS.
</TABLE>

<PAGE> 208

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ----------- ------------
<C> <S> <C>
**5.1 Opinion of Cravath, Swaine & Moore with respect to the
legality of the Class A Common Stock.
10. MATERIAL CONTRACTS.
**10.1 Stock and Asset Transfer Agreement between CBS and the
Registrant.
**10.2 Intercompany Agreement between CBS and the Registrant.
**10.3 Tax Sharing Agreement between CBS and the Registrant.
10.4 $4.0 billion Credit Agreement among CBS Corporation, the
Lenders parties thereto, Nationsbank, N.A. and The
Toronto-Dominion Bank as Syndication Agents, The Chase
Manhattan Bank as Documentation Agent, and Morgan Guaranty
Trust Company of New York as Administrative Agent, dated
August 29, 1996, is incorporated herein by reference to
Exhibit 10(1) to the report on Form 10-Q of CBS Corporation
for the quarter ended September 30, 1996.
10.5 First Amendment, dated January 29, 1997, to the CBS Credit
Agreement, dated August 29, 1996, among CBS Corporation, the
Lenders parties thereto, Nationsbank, N.A. and The
Toronto-Dominion Bank as Syndication Agents, The Chase
Manhattan Bank as Documentation Agent, and Morgan Guaranty
Trust Company of New York as Administrative Agent, is
incorporated herein by reference to Exhibit 10(p) to the
report on Form 10-Q of CBS Corporation for the quarter ended
March 31, 1997.
10.6 Second Amendment, dated March 21, 1997, to the CBS Credit
Agreement, dated August 29, 1996, as amended by the First
Amendment thereto dated January 29, 1997, among CBS
Corporation, the Subsidiary Borrowers parties thereto, the
Lenders parties thereto, Nationsbank, N.A. and The
Toronto-Dominion Bank as Syndication Agents, The Chase
Manhattan Bank as Documentation Agent, and Morgan Guaranty
Trust Company of New York as Administrative Agent, is
incorporated herein by reference to Exhibit 10(q) to the
report on Form 10-Q of CBS Corporation for the quarter ended
March 31, 1997.
10.7 Third Amendment, dated March 3, 1998, to the CBS Credit
Agreement, dated August 29, 1996, as amended by the First
Amendment thereto dated January 29, 1997, as amended by the
Second Amendment thereto dated March 21, 1997 among CBS
Corporation, the Subsidiary Borrowers parties thereto, the
Lenders parties thereto, Nationsbank, N.A. and The
Toronto-Dominion Bank as Syndication Agents, The Chase
Manhattan Bank as Documentation Agent, and Morgan Guaranty
Trust Company of New York as Administration Agent, is
incorporated herein by reference to Exhibit 10(x) to the
report on Form 10-Q of CBS Corporation for the quarter ended
March 31, 1998.
10.8 Employment Agreement, entered into on June 20, 1996 and
effective December 31, 1996, between CBS and Mel Karmazin is
incorporated herein by reference to Exhibit 10(s) to the
report on Form 10-Q of CBS Corporation for the quarter ended
March 31, 1997.
10.9 Employment Agreement, entered into on May 1996, effective
November 28, 1995 and amended January 29, 1997, between CBS
Broadcasting Inc. and Daniel Mason.
**10.10 Employment Agreement, entered into on December 22, 1989, as
amended, between TDI Worldwide, Inc. and William Apfelbaum.
</TABLE>

<PAGE> 209

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ----------- ------------
<C> <S> <C>
10.11 The CBS 1991 Long-Term Incentive Plan, as amended to January
28, 1998, is incorporated herein by reference to Exhibit
10(g) to the report on Form 10-K of CBS Corporation for the
year ended December 31, 1997.
10.12 The CBS 1993 Long-Term Incentive Plan, as amended to January
28, 1998, is incorporated herein by reference to Exhibit
10(b) to the report on Form 10-K of CBS Corporation for the
year ended December 31, 1997.
**10.13 1998 Long-Term Incentive Plan of the Registrant.
**10.14 Executive Annual Incentive Plan of the Registrant.
10.15 The CBS Annual Performance Plan, as amended to November 1,
1996, is incorporated herein by reference to Exhibit 10(a)
to the report on Form 10-Q of CBS Corporation for the
quarter ended September 30, 1996.
10.16 The Westinghouse Executive Pension Plan, as amended to
December 1, 1997, is incorporated herein by reference to
Exhibit 10(d) to the report on Form 10-K of CBS Corporation
for the year ended December 31, 1997.
10.17 The CBS 1998 Executive Annual Incentive Plan is incorporated
herein by reference to Exhibit A to the Proxy Statement of
CBS Corporation dated May 6, 1998.
10.18 The amended and restated Infinity Broadcasting Corporation
Stock Option Plan is incorporated herein by reference to
Exhibit 4.4 to the CBS Corporation's Registration Statement
No. 333-13219 on Post-Effective Amendment No. 1 on Form S-8
to Form S-4 filed with the Securities and Exchange
Commission on January 2, 1997.
10.19 Infinity Broadcasting Corporation Warrant Certificate No. 3
to Mel Karmazin is incorporated herein by reference to
Exhibit 4.6 to the CBS Corporation's Registration Statement
No. 333-13219 on Post-Effective Amendment No. 1 on Form S-8
to Form S-4 filed with the Securities and Exchange
Commission on January 2, 1997.
21. SUBSIDIARIES.
*21.1 Subsidiaries of the Registrant.
23. CONSENTS OF EXPERTS AND COUNSEL.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
**23.4 Consent of Cravath, Swaine & Moore (included in Exhibit
5.1).
24. POWERS OF ATTORNEY.
24.1 Power of Attorney of Mel Karmazin.
24.2 Power of Attorney of Farid Suleman.
27. FINANCIAL DATA SCHEDULE.
27.1 Financial Data Schedule.
</TABLE>

- ---------------
* Filed herewith.

** To be filed by amendment.

<PAGE> 1
EXHIBIT 21.1

SUBSIDIARIES OF THE COMPANY

Set forth below is a list of subsidiaries of the Company. Such companies
are incorporated or organized in the jurisdictions indicated. CBS Radio, Inc.
and Infinity Media Corporation are each incorporated under the laws of Delaware
and are direct wholly owned subsidiaries of the Company.

PERCENTAGE OF
VOTING STOCK
JURISDICTION OF OWNED BY THE
NAME OF CORPORATION INCORPORATION COMPANY
- ------------------- --------------- ------------
<S> <C> <C>
The following companies are direct or
indirect subsidiaries of CBS Radio, Inc.:

ARS Acquisition II, Inc. Delaware 100.00

Radio Systems of Miami, Inc. Delaware 100.00

Radio Systems of Philadelphia, Inc. Delaware 100.00

CBS Radio License Inc. Delaware 100.00

Professional Broadcasting, Virginia 100.00
Incorporated

EZ Charlotte, Inc. Virginia 100.00

EZ Kansas City, Inc. Virginia 100.00

EZ New Orleans, Inc. Virginia 100.00

EZ Philadelphia, Inc. Virginia 100.00

EZ Pittsburgh, Inc. Virginia 100.00

EZ Sacramento, Inc. Virginia 100.00

EZ Seattle, Inc. Virginia 100.00

EZ St. Louis, Inc. Virginia 100.00

The following companies are direct or
indirect subsidiaries of Infinity Media
Corporation:

13 Radio Corporation Delaware 100.00

Hemisphere Broadcasting Corporation Delaware 100.00
</TABLE>
<PAGE> 2
2

<TABLE>
<S> <C> <C>
Hit Radio, Inc. New York 100.00

C&W Land Corporation New Jersey 100.00

Infinity Broadcasting Corporation of Delaware 100.00
Atlanta

Infinity Broadcasting Corporation of Delaware 100.00
Boston

Infinity Broadcasting Corporation of Delaware 100.00
California

Infinity Broadcasting Corporation of Delaware 100.00
Chicago

Infinity Broadcasting Corporation of Delaware 100.00
Dallas

Infinity Broadcasting Corporation of Delaware 100.00
Dallas II

Infinity Broadcasting Corporation of Delaware 100.00
Detroit

Infinity Broadcasting Corporation of Delaware 100.00
Florida

Infinity Broadcasting Corporation of Delaware 100.00
Glendale

Infinity Broadcasting Corporation of Delaware 100.00
Illinois

Infinity Broadcasting Corporation of Delaware 100.00
Los Angeles

Infinity Broadcasting Corporation of Delaware 100.00
Maryland

Infinity Broadcasting Corporation of New York 100.00
Baltimore

Infinity WLIF, Inc. Maryland 100.00

Infinity WLIF-AM, Inc. Maryland 100.00

Infinity WPGC (AM), Inc. Delaware 100.00

Infinity Broadcasting Corporation of Delaware 100.00
Michigan

Infinity Broadcasting Corporation of Delaware 100.00
New York
</TABLE>

<PAGE> 3

<TABLE>
<S> <C> <C>
Infinity Broadcasting Corporation of Delaware 100.00
Northern California

Infinity KFRC-FM, Inc. Delaware 100.00

Infinity Broadcasting Corporation of Pennsylvania 100.00
Pennsylvania

Infinity Broadcasting Corporation of Delaware 100.00
Philadelphia

Infinity Broadcasting Corporation of Delaware 100.00
San Francisco

Infinity Broadcasting Corporation of Delaware 100.00
Tampa

Infinity Broadcasting Corporation of Delaware 100.00
Texas

Infinity Broadcasting Corporation of Delaware 100.00
Washington

Infinity Broadcasting Corporation of Delaware 100.00
Washington, D.C.

Infinity Holdings Corporation of Delaware 100.00
Chesapeake

Infinity Broadcasting Corporation of Delaware 100.00
Chesapeake

Infinity of Chesapeake Licensee Delaware 100.00
Corporation

Infinity Holdings Corporation of Ft. Delaware 100.00
Worth

Infinity Broadcasting Corporation of Delaware 100.00
Ft. Worth

Infinity of Ft. Worth Licensee Delaware 100.00
Corporation

Infinity Holdings Corporation of Delaware 100.00
Georgia

Infinity Broadcasting Corporation of Delaware 100.00
Georgia

Infinity of Georgia Licensee Delaware 100.00
Corporation

Infinity Holdings Corporation of Delaware 100.00
Massachusetts
</TABLE>

<PAGE> 4

<TABLE>
<S> <C> <C>
Infinity WOAZ-FM, Inc. Massachusetts 100.00

Infinity Holdings Corporation of Delaware 100.00
Orlando

Infinity KOAI-FM Holdings Delaware 100.00
Corporation

Infinity KOAI-FM Licensee Delaware 100.00
Corporation

Infinity Network, Inc. Delaware 100.00

Infinity Ventures, Inc. Delaware 100.00

Sagittarius Broadcasting Corporation New York 100.00

The Audio House, Inc. California 100.00

UCGI, Inc. Delaware 100.00

TMRG, Inc. Delaware 100.00

TDI Worldwide, Inc. Delaware 100.00

The following companies are direct or
indirect subsidiaries of TDI
Worldwide, Inc.:

Transportation Displays Delaware 100.00
Incorporated

Washington Transit Washington 100.00
Advertising, Inc.

Washington Outdoor Washington 100.00
Advertising, Inc.

TDI International Delaware 100.00

Outdoor Media Network, Inc. California 100.00

TDI Metro Ltd. Ireland 51.00

Roadshow Advertising Ltd. Ireland 100.00

Metro Poster Advertising Ltd. Ireland 100.00

LDI Limited UK 100.00

TDI Advertising Ltd. UK 100.00

TDI Transit Advertising Ltd. UK 100.00

TDI Buses Limited UK 100.00

Outdoor Images Ltd. UK 100.00

TDI Mail Holdings Limited UK 75.00

TDI (BP) Limited UK 100.00
</TABLE>

<PAGE> 5
<TABLE>
<S> <C> <C>
Metrobus Advertising Limited UK 100.00

TDI (FB) Limited UK 100.00

Ripple Vale Holdings, Limited Virgin 100.00
Islands

Sky Blue Investments, Limited Jersey 100.00
Jersey

TDI Metro (NI) Limited UK 100.00
</TABLE>