INFINITY MEDIA CORP, S-1, 1998-09-18

INFINITY MEDIA CORP
S-1, 1998-09-18

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 18, 1998

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

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

INFINITY BROADCASTING CORPORATION*
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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<S> <C> <C>
DELAWARE 4832 PENDING
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) NO.)
</TABLE>

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:

<TABLE>
<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>

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

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.......... $10,000,000 $2,950
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(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(a) under the Securities Act of 1933, as amended.
------------------------

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.

* The Registrant is currently incorporated under the name Infinity Media
Corporation. Prior to the effectiveness of the Registration Statement, the
Registrant will be renamed Infinity Broadcasting Corporation.
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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 "International Prospectus Alternate
Page." 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 SEPTEMBER 18, 1998

PROSPECTUS

[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 shares of Class A Common Stock offered hereby, shares are
being offered for sale initially in the United States and Canada (the "U.S.
Offering") by the U.S. Underwriters and 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 $ and
$ per share. For a discussion of the factors considered in determining
the initial public offering price of the Class A Common Stock, see
"Underwriting."

Application will be made to list the Class A Common Stock on the New York
Stock Exchange under the symbol "INF."

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 % 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
Corporation. See "Risk Factors -- Risks Relating to Control by CBS," "Use of
Proceeds," "Principal Stockholder and Stock Ownership" and "Relationships
Between the Company and CBS."

SEE "RISK FACTORS" BEGINNING ON PAGE 9 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 and 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.
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The date of this Prospectus is , 1998.
<PAGE> 4

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.
------------------------

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.
------------------------

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 "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.

FORWARD-LOOKING STATEMENTS; CERTAIN DEFINED TERMS; MARKET SHARE DATA

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 New York Stock
Exchange; "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.
------------------------
Unless stated otherwise, all market share and market position data that are
contained in this Prospectus are based on 1997 information contained in Duncan's
Radio Market Guide (1998 ed.).

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<PAGE> 5

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; (ii) gives effect to the conversion of each outstanding share
of the Company's current common stock, par value $.01 per share, into a share 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 $ per share of Class A Common Stock.

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 27 out of
the 30 largest 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, which operates predominantly in
major metropolitan markets, 15 of which are also served by the Company's radio
stations.

The Company operates and seeks to opportunistically acquire radio and
outdoor media, or "out-of-home," properties in the largest markets in the United
States. The Company characterizes its business as out-of-home because more than
two-thirds 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.

For the twelve months ended June 30, 1998, the Company had pro forma net
revenues and EBITDA (as defined herein) of $1,952 million and $757 million,
respectively. In 1997, the Company achieved pro forma revenue and EBITDA growth
of 20% and 29%, respectively. For the quarter ended June 30, 1998, the Company
reported its sixth consecutive quarter of pro forma revenue and EBITDA growth as
compared to the corresponding quarter in the prior year.

The Company is currently a 100% owned subsidiary of CBS. After giving
effect to the Offerings, CBS will beneficially own approximately % of the
equity, which will represent approximately % of the combined voting power, of
the Company. CBS also owns, among other assets, 14 television stations covering
approximately 32% 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.

3
<PAGE> 6

The Company was formed to own and operate the out-of-home media business of
CBS, which prior to December 1, 1997, was known as Westinghouse Electric
Corporation ("Westinghouse"). In November 1995, Westinghouse acquired CBS Inc.
In December 1996, Westinghouse acquired 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"). Prior to the Offerings, CBS will have transferred 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 (and
historically has represented) 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
June 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 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, which
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.

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 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,

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President and Chief Executive Officer, and Farid Suleman, the Company's
Executive Vice President, Chief Financial Officer and Treasurer, 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 % of the equity, which
will represent approximately % 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 32% 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 is also the President and Chief Operating
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 and Treasurer. 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.

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 paid in order to provide CBS with funds, in the
form of payments of principal and interest on the CBS Note, 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 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 shares of Class A Common Stock being offered hereby by the
Company, shares are being offered initially in the United States and
Canada by the U.S. Underwriters and 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........................ shares

International Offering............... shares

Total(1)..................... shares

Common Stock to be Outstanding After
the Offerings:

Class A Common Stock(1)(2)........... shares

Class B Common Stock(3).............. shares

Total(1)(2).................. 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 ___% of
the combined voting power of the
outstanding shares of Common Stock
(approximately ___% 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
possible acquisitions. See "Use of
Proceeds."

Listing................................ Application will be made to list the
Class A Common Stock on the NYSE
under the symbol "INF."
- ---------------
(1) Does not include up to and shares subject to over-allotment options
granted by the Company to the U.S. Underwriters and the International
Managers, respectively.

(2) Excludes shares of Class A Common Stock reserved for issuance under
the Company's long-term incentive plan. See "Management -- Long-Term
Incentives."

(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.

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<PAGE> 9

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

The summary historical combined financial data of the Company presented
below 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 as of June 30, 1998 and for the six-month
periods ended June 30, 1997 and 1998 have been derived from, and are qualified
by, the unaudited financial statements of the Company included elsewhere in this
Prospectus. The summary historical combined financial data of the Company
presented below 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 "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 and for the six months ended June
30, 1997 and 1998 include, in the opinion of management, all adjustments
consisting only of normal nonrecurring 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 six-month periods
are not necessarily indicative of the results to be expected for the full year.

The summary pro forma statement of earnings and 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, and the adjusted balance sheet data
give effect to the CBS Note as if it had been issued on June 30, 1998. The pro
forma statement of earnings and operating data do not give pro forma effect to
the incurrence 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 is it necessarily indicative of future
operating results or financial condition.
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
HISTORICAL PRO
------------------------------------------------------------ FORMA
1993 1994 1995 1996 1997 1997(1)
----------- ----------- -------- -------- ---------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<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..................
Weighted average shares
outstanding -- basic and
diluted..................
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
After-tax Cash Flow(2)..... 42,913 58,240 45,587 129,094 374,764 446,212

<CAPTION>
SIX MONTHS ENDED
JUNE 30,
---------------------------------------
HISTORICAL PRO
------------------------- FORMA
1997 1998 1998(1)
----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
STATEMENT OF EARNINGS DATA:
Net revenues............... $691,391 $785,372 $952,747
Operating expenses
excluding depreciation
and amortization......... 432,900 465,776 584,614
Depreciation and
amortization............. 98,351 105,939 143,046
Corporate expenses......... 10,965 8,870 14,340
-------- -------- --------
Operating earnings......... 149,175 204,787 210,747
Interest expense, net...... 3,434 4,760 24,565
Net earnings............... 69,313 98,319 88,452
Net earnings per common
share -- basic and
diluted..................
Weighted average shares
outstanding -- basic and
diluted..................
OTHER OPERATING DATA:
EBITDA(2).................. $248,073 $311,247 $354,563
Capital expenditures....... 5,319 10,987
After-tax Cash Flow(2)..... 167,664 204,258 231,498
</TABLE>

(footnotes on following page)

7
<PAGE> 10

<TABLE>
<CAPTION>
AT JUNE 30, 1998
--------------------------------------------
PRO PRO FORMA
ACTUAL FORMA(3) AS ADJUSTED(4)
----------- ----------- --------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Total assets................................................ $10,360,320 $10,360,320 $
Long-term debt (including current portion).................. 728,600 3,228,600
Stockholders' equity........................................ 8,272,349 5,772,349
Working capital............................................. 296,724 296,724
</TABLE>

- ---------------
(1) The pro forma statement of earnings and operating data gives 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 Pro Forma Financial Information"). The pro
forma earnings and operating data do not give effect to the issuance by Old
Infinity 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.
Nevertheless, they 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 calculated in
accordance with generally accepted accounting principles, these measures may
not be comparable to similarly titled measures employed by other companies.

(3) The pro forma balance sheet data give effect to the issuance by Old Infinity
of the CBS Note.

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

8
<PAGE> 11

RISK FACTORS

Prospective purchasers should carefully consider the following factors and
other information in this prospectus before deciding to invest in shares of
Class A Common Stock.

RISKS RELATING TO CONTROL BY CBS

Following the Offerings, CBS will continue to control the Company. CBS will
beneficially own 100% of the outstanding Class B Common Stock, which will
represent approximately % 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. 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 and establish the rates at which the
Company will provide advertising time to CBS. 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.

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.

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 and Treasurer,
will continue to hold senior management positions with CBS after the Offerings.
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 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 shareholders, and may exacerbate the conflicts described herein.

9
<PAGE> 12

In addition, immediately following the Offerings, only two of the Company's
eight directors will be independent. In addition to Messrs. Karmazin and
Suleman, the Company expects that its Board will include four non-management
directors who will also be officers or directors of CBS. CBS will have the
ability to change the size or composition of the Board at any time.

Messrs. Karmazin and Suleman are also the President and Chief Executive
Officer, and Chief Financial Officer and Secretary, respectively, of Westwood
One, which positions will continue to impose demands on their time and present
potential conflicts of interest.

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.

Offering Proceeds 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.

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, and in
some cases state and local, income taxes which it would be required to pay to
the relevant taxing authorities if it were a separate 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 returns on behalf of
the consolidated group 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 Pension 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. As of December 31, 1997, the
present value of the liabilities under the Westinghouse Pension Plan exceeded
the fair market value of the assets held in trust thereunder by approximately
$842 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 the Westinghouse Pension Plan if such Plan were
terminated. Although the Intercompany Agreement provides that CBS will indemnify
the Company in respect of any such pension liabilities, there can be no
assurance that CBS will be able to fulfill its obligations under such indemnity.
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.

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

10
<PAGE> 13

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 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
11
<PAGE> 14

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 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, such as CBS, 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 Company's Amended and Restated
Certificate of Incorporation (the "Amended 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 Amended Certificate
authorizes the Company's Board of Directors to enforce these prohibitions. In
addition, the Amended 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.

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).

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.
12
<PAGE> 15

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 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 to
the public, 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.

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. Based on preliminary information, the Company estimates its overall
cost to achieve Year 2000 compliance will be approximately $2 million. 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

13
<PAGE> 16

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.

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."

POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER PROVISIONS

As the Company's controlling shareholder, 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 Amended Certificate also may make it more difficult for a third party to
acquire control of the Company. For example, the Amended Certificate provides
for a classified board of directors and eliminates shareholder action by written
consent. In addition, the Amended Certificate allows the Board of Directors to
issue preferred stock without stockholder approval. See "Description of Capital
Stock."

RISKS RELATING TO POTENTIAL DISTRIBUTION OF CLASS B COMMON STOCK

Each share of the Class B Common Stock will automatically convert to one
share of Class A Common Stock upon its transfer by CBS or its affiliates to any
person other than CBS or its affiliates. If CBS were to distribute its Class B
Common Stock to its stockholders in a tax-free spin-off, however, the Class B
Common Stock would, absent an amendment to the Amended Certificate, continue to
entitle the holders thereof to five votes per share. The distribution of such
shares could have an adverse effect on the market price of the Class A Common
Stock. CBS has agreed that if it does distribute the Class B Common Stock to its
stockholders in a tax-free spin-off, it will amend the Amended Certificate to
provide for the Class B Common

14
<PAGE> 17

Stock to be converted into Class A Common Stock at some time subsequent to such
distribution, if CBS determines that such amendment and subsequent conversion
can be effected without adverse tax consequences to CBS. 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
Company intends to list the Class A Common Stock for trading on the NYSE. 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.

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.

After the Offerings, there will be outstanding shares of
Class A Common Stock and 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 $ per share (or $ per
share if the Underwriters' over-allotment options are exercised in full) of
Common Stock from the initial public offering price. See "Dilution."

15
<PAGE> 18

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 $ ($
if the Underwriters' over-allotment options are exercised in full), assuming an
initial public offering price of $ 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 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> 19

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 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.

As of June 30, 1998, after giving effect to the CBS Note, the Company would
have had a pro forma deficit in net tangible book value of $ million or
approximately $ per share of Common Stock. 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 June 30, 1998 would
have been approximately $ million, or $ per share. This represents
an immediate increase in net tangible book value of $ per share to CBS (the
Company's existing stockholder) and an immediate dilution in net tangible book
value of $ per share to new investors. The following table illustrates such
per share dilution:

<TABLE>
<S> <C> <C>
Initial public offering price per share..................... $
Pro forma net tangible book value as of June 30, 1998..... $
Increase in pro forma net tangible book value per share
attributable to new investors in the Offerings.........
--------
Pro forma net tangible book value per share as adjusted for
the Offerings.............................................
--------
Immediate dilution per share to new investors in the
Offerings................................................. $
========
</TABLE>

The following table sets forth, on a pro forma basis, as of June 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...............
New investors......................
-------- ----- -------- -----
Total.................... 100.0% 100.0%
======== ===== ======== =====
</TABLE>

17
<PAGE> 20

CAPITALIZATION

The following table sets forth: (i) the actual capitalization of the
Company as of June 30, 1998; (ii) the capitalization of the Company as of June
30, 1998 after giving effect to the issuance of the CBS Note; and (iii) the
capitalization of the Company as of June 30, 1998 as adjusted to give effect to
the issuance of the CBS Note, the sale of shares of Class A Common
Stock in the Offerings and the application of the net proceeds therefrom. See
"Use of Proceeds." This table should be read in conjunction with "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 JUNE 30, 1998
----------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
------ --------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Cash and cash equivalents................................... $ 43 $ 43 $
====== ====== ========

Long-term debt(1)........................................... $ 725 $ 725 $
CBS Note.................................................... -- 2,500

Stockholders' equity:
Preferred Stock, $.01 par value per share,
shares authorized, zero shares issued and
outstanding..........................................
Class A Common Stock, $.01 par value per share,
shares authorized,
shares issued and outstanding(2)................
Class B Common Stock, $.01 par value per share,
shares authorized,
shares issued and outstanding...................
Contributed capital in excess of par value................ 7,794 5,772
Accumulated earnings...................................... 478 --
------ ------ --------
Total stockholders' equity........................ 8,272 5,772
------ ------ --------
Total capitalization........................................ $8,997 $8,997 $
====== ====== ========
</TABLE>

- ---------------
(1) Excludes the CBS Note and current portion of long-term debt (aggregating
$3.3 million as of June 30, 1998). For information concerning the Company's
long-term debt, see Note 9 to the Company's Combined Financial Statements.

(2) Excludes an aggregate of shares of Class A Common Stock reserved for
issuance under the Company's long-term incentive plan. See
"Management -- Long-Term Incentives."

18
<PAGE> 21

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 as of June 30,
1998 and for the six months ended June 30, 1997 and 1998 have been derived from,
and are qualified by, the unaudited financial statements of the Company included
elsewhere in this Prospectus. The selected historical combined financial data of
the Company presented below 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 "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 and for the six
months ended June 30, 1997 and 1998 include, in the opinion of management, all
adjustments consisting only of normal nonrecurring 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
six-month periods are not necessarily indicative of the results to be expected
for the full year.

The selected pro forma statement of earnings and 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, and the adjusted balance sheet data
give effect to the CBS Note as if it had been issued on June 30, 1998. The pro
forma statement of earnings and operating data do not give pro forma effect to
the incurrence 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 earlier on the date indicated, nor is it necessarily indicative of future
operating results or financial condition.
<TABLE>
<CAPTION>

(footnotes on following page)
19
<PAGE> 22

<TABLE>
<CAPTION>
AT JUNE 30, 1998
AT DECEMBER 31, -------------------------------------------
----------------------- PRO FORMA
1996 1997 ACTUAL PRO FORMA(3) AS ADJUSTED(4)
---------- ---------- ----------- ------------ --------------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets............................................ $7,261,952 $7,074,103 $10,360,320 $10,360,320
Long-term debt (including current portion).............. 150,494 2,092 728,600 3,228,600
Stockholders' equity.................................... 6,418,701 6,397,388 8,272,349 5,772,349
Working capital......................................... 273,403 247,206 296,724 296,724
</TABLE>

- ---------------
(1) The pro forma statement of earnings and operating data gives effect to: (i)
the 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 earnings and operating data do not give effect to the issuance by Old
Infinity of the CBS Note.

(3) The pro forma balance sheet data give effect to the issuance by Old Infinity
of the CBS Note.

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

20
<PAGE> 23

UNAUDITED COMBINED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma financial information (the "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 six months ended June 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 June 30, 1998 and the
results of operations have been included subsequent to its 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 occurred on January 1, 1997.

The Unaudited Pro Forma Financial Information does not purport to present
the actual results of operations of the Company had the acquisition of American
Radio and its acquisitions 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," and 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> 24

INFINITY BROADCASTING CORPORATION

UNAUDITED PRO FORMA COMBINED STATEMENT OF EARNINGS
SIX MONTHS ENDED JUNE 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............................. $785,372 $167,375 $952,747

Operating expenses excluding depreciation
and amortization....................... 465,776 118,838 584,614
Depreciation and amortization............ 105,939 27,503 $ 9,604(2) 143,046
Corporate expenses....................... 8,870 5,470 14,340
-------- -------- ------- --------
Total operating expenses................. 580,585 151,811 9,604 742,000
-------- -------- ------- --------
Operating earnings....................... 204,787 15,564 (9,604) 210,747
-------- -------- ------- --------
Interest expense, net.................... (4,760) (30,311) 10,506(3) (24,565)
Other income, net........................ 521 249 770
-------- -------- ------- --------
Earnings (loss) before income taxes...... 200,548 (14,498) 902 186,952
Income tax expense (benefit)............. 102,229 (9,372) 5,643(4) 98,500
-------- -------- ------- --------
Net earnings (loss)...................... $ 98,319 $ (5,126) $(4,741) $ 88,452
======== ======== ======= ========
EBITDA................................... $311,247 $ 43,316 $ -- $354,563
======== ======== ======= ========
Net earnings per common share -- basic
and diluted............................ $ $
======== ========
Weighted average shares
outstanding -- basic and diluted.......
======== ========
</TABLE>

(footnotes on following page)

See Notes to Unaudited Pro Forma Combined Financial Information
22
<PAGE> 25

INFINITY BROADCASTING CORPORATION

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

<TABLE>
<CAPTION>
AMERICAN
RADIO
THE AS ADJUSTED PRO FORMA COMBINED
COMPANY (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
---------- -------- -------- ----------
Earnings (loss)................................ $ 177,629 $(10,731) $ (6,371) $ 160,527
========== ======== ======== ==========
EBITDA......................................... $ 575,387 $128,364 $ -- $ 703,751
========== ======== ======== ==========
Net earnings per common share -- basic and
diluted...................................... $ $
========== ==========
Weighted average shares outstanding -- basic
and diluted..................................
========== ==========
</TABLE>

(footnotes on following page)

See Notes to Unaudited Pro Forma Combined Financial Information
23
<PAGE> 26

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 six months ended
June 30, 1998 include historical results of the radio operations of American
Radio for the period prior to the acquisition (January 1, 1998 to June 4,
1998). The preacquisition pro forma results for American Radio have been
adjusted to exclude the results of American Tower Corporation ("Tower"), a
subsidiary of American Radio that was not acquired by the Company and to
give effect to American Radio's related acquisitions and dispositions as of
January 1, 1998.

(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 exclude the operations of Tower (see note (1) above) and 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
-----------------------------------------------------
ADJUSTMENTS TO AMERICAN
EXCLUDE RADIO
AMERICAN TOWER PRO FORMA AS
Radio (A) ADJUSTMENTS ADJUSTED
-------- -------------- ----------- --------
<S> <C> <C> <C> <C>
Net revenues..................................... $374,118 $17,120 $ 36,324(b) $393,322
Operating expenses excluding depreciation and
amortization................................... 244,150 9,861 24,461(b) 258,750
Depreciation and amortization.................... 64,743 6,326 13,983(b) 72,400
Merger expenses.................................. 1,985 (1,985)(c) --
Corporate expenses............................... 8,207 8,207
-------- ------- -------- --------
Total operating expenses......................... 319,085 16,187 36,459 339,357
-------- ------- -------- --------
Operating earnings............................... 55,033 933 (135) 53,965
-------- ------- -------- --------
Interest expense, net............................ (57,385) (2,789) (15,090) (69,686)
-------- ------- -------- --------
Other income (expense), net...................... (5,713) (193) 7,519(b) 1,999
Earnings (loss) before income taxes.............. (8,065) (2,049) (7,706) (13,722)
Income tax expense (benefit)..................... (416) (473) (3,048) (2,991)
-------- ------- -------- --------
Earnings (loss).................................. $(7,649) $(1,576) $ (4,658) $(10,731)
======== ======= ======== ========
EBITDA........................................... $114,063 $ 7,066 $ 21,367 $128,364
======== ======= ======== ========
</TABLE>

(a) The adjustment eliminates the historical results of Tower (see note (1)
above).

(b) 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> 27

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

GENERAL

Infinity Broadcasting Corporation (the "Company") is currently a 100% owned
subsidiary of CBS Corporation ("CBS"). CBS expects to effect a reorganization
(the "Reorganization") by contributing to the Company, at book value, certain
subsidiaries and net assets comprising CBS's out-of-home media business.

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. These combined financial statements have been prepared from CBS's
historical accounting records and 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, acquisitions
consummated by CBS have been presented as if they were made by the Company and
the consideration to effect these acquisitions was contributed to the Company by
CBS. The combined financial information is not necessarily indicative of the
results of operations, financial position and cash flows that would have
resulted had the Reorganization occurred at January 1, 1995 and had the Company
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 offering. See "Relationships Between the Company and CBS."

On November 24, 1995, the Company acquired the radio operations of CBS Inc.
for cash contributed by CBS of $1.2 billion. On December 31, 1996, the Company
acquired Infinity Broadcasting Corporation ("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. The CBS stock and cash to repay
the debt were contributed to the Company by CBS for purposes of this
acquisition. On June 4, 1998, the Company completed 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. The Company
received a $1.4 billion capital contribution from CBS. In connection with the
acquisition, the Company 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.

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 radio stations.

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 amortiza-
25
<PAGE> 28

tion charges is consistent with management's belief that the Company's
intangible assets, such as broadcast licenses and goodwill, are generally
increasing in value as the Company implements its business strategy. 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.

RESULTS OF OPERATIONS -- THE COMPANY

Six Months ended June 30, 1998 Compared to Six Months Ended June 30, 1997

Net revenues for the six months ended June 30, 1998 were $785 million
compared to $691 million for the six months ended June 30, 1997, an increase of
14%. 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.

Operating expenses (excluding depreciation and amortization) for the six
months ended June 30, 1998 were $466 million compared to $433 million for the
six months ended June 30, 1997, an increase of 8%. 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.

Corporate expenses for the six months ended June 30, 1998 were $9 million
compared to $11 million for the six months ended June 30, 1997.

Depreciation and amortization expense for the six months ended June 30,
1998 was $106 million compared to $98 million for the six months ended June 30,
1997, an increase of approximately 8%. The increase represents additional
depreciation and amortization resulting from the June 4, 1998 acquisition of
American Radio.

Operating earnings for the six months ended June 30, 1998 were $205 million
compared to $149 million for the six months ended June 30, 1997, an increase of
38%. This increase was primarily attributable to the higher revenues.

EBITDA for the six months ended June 30, 1998 was $311 million compared to
$248 million for the six months ended June 30, 1997, an increase of 25%.

Interest expense for the six months ended June 30, 1998 was $5 million
compared to $3 million for the six months ended June 30, 1997. The interest
expense for the 1998 period resulted from debt assumed in the American Radio
acquisition, 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 six months ended June 30, 1998 were $102 million
compared to $77 million for the six months ended June 30, 1997. The effective
tax rate was 51% for the six months ended June 30, 1998 compared to 53% for the
six months ended June 30, 1997.

Net earnings for the six months ended June 30, 1998 totaled $98 million
compared to $69 million for the six months ended June 30, 1997, an increase of
$29 million or 42%.

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 the beginning of 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) for 1997 were
$888 million compared to $344 million for 1996. The increase was due principally
to the above acquisition and expenses associated with

26
<PAGE> 29

higher revenues. On a pro forma basis, assuming the Old Infinity acquisition had
occurred as of the beginning of 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 the beginning of 1996, depreciation
and amortization 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 the
beginning of 1996, EBITDA would have increased approximately 29%.

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.

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 the beginning of 1995, net
revenues for the year ended December 31, 1996 would have increased approximately
11%.

Operating expenses (excluding depreciation and amortization) 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 the beginning of 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 the beginning of 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 the beginning of 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 the beginning
of 1995, EBITDA in 1996 would have increased approximately 49%.

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.
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<PAGE> 30

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.

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 expects to enter into its own
revolving credit facility with a syndicate of banks. The amount and terms of
such arrangement have not yet been determined. The Company had approximately
$725 million of long-term debt outstanding at June 30, 1998. Additional debt or
equity financing may be required for future material acquisitions, if any.

The Company had working capital of $297 million, $247 million and $273
million at June 30, 1998, December 31, 1997 and December 31, 1996, respectively.

Operating Activities

The Company's operating activities provided $203 million of cash in the six
months ended June 30, 1998 compared to $161 million in the six months ended June
30, 1997. The increase relates primarily to the improved operating results for
the six months ended June 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 six
months ended June 30, 1998, primarily for the acquisition of American Radio,
compared to $23 million of cash provided in the six months ended June 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 $1.2 billion in the six
months ended June 30, 1998 compared to cash used of $178 million in the six
months ended June 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 six months ended June 30, 1997 relates to the repayment of
debt assumed in the 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.

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<PAGE> 31

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

As of June 30, 1998, the Company had $725 million of long-term debt,
primarily relating to debt assumed in the acquisition of American Radio. Under
the most restrictive of the indentures, $1.96 billion of American Radio's net
assets at June 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 overall cost to achieve Year 2000
compliance to be approximately $2 million. 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 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.

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<PAGE> 32

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 27 out of
the 30 largest 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, which operates predominantly in major metropolitan markets, 15 of
which are also served by the Company's radio stations.

For the twelve months ended June 30, 1998, the Company had pro forma net
revenues and EBITDA of $1,952 million and $757 million, respectively. In 1997,
the Company achieved pro forma revenue and EBITDA growth of 20% and 29%,
respectively. For the quarter ended June 30, 1998, the Company reported its
sixth consecutive quarter of pro forma revenue and EBITDA growth as compared to
the corresponding quarter in the prior year.

The Company was formed to own and operate the out-of-home media business of
CBS, 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. Prior to the Offerings, CBS
will have transferred all its radio, outdoor advertising and related assets to
the Company.

BUSINESS STRATEGY AND COMPETITIVE STRENGTHS

30
<PAGE> 33

radio business since the enactment of 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.

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 and Treasurer, 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> 34

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.

RADIO STATIONS AND OUTDOOR DISPLAYS

The following table sets forth certain selected information with regard to
each of the Company's radio stations and outdoor displays as of September 17,
1998.

RADIO STATIONS AND OUTDOOR DISPLAYS

<TABLE>
<CAPTION>
RADIO TDI
MARKET ----------------------------------------- -------------------------------
RANK BY 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
</TABLE>

32
<PAGE> 35
RADIO STATIONS AND OUTDOOR DISPLAYS (CONT'D)

<TABLE>
<CAPTION>
RADIO TDI
MARKET ----------------------------------------- -------------------------------
RANK BY AM/
MARKET POPULATION STATIONS FM FORMAT DISPLAY TYPE
- ------ ---------- -------- --- ------ ------------
<S> <C> <C> <C> <C> <C>
Detroit, MI 7 WKRK FM New Rock --
WOMC FM Oldies
WVMV FM Smooth Jazz
WWJ AM News
WXYT AM Talk/Sports
WYCD FM Country
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(1) FM Smooth Jazz
KSGS(1) AM Urban
St. Louis, MO 18 KEZK FM Soft Adult Contemporary --
KMOX AM News/Talk/Sports
KYKY FM Adult Contemporary
Baltimore, MD 19 WBGR(2) AM Gospel --
WBMD(2) 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(3) FM Contemporary Hit Radio Bus
WQYK FM Country
WQYK AM Talk
WYUU(3) FM Oldies
</TABLE>

33
<PAGE> 36
RADIO STATIONS AND OUTDOOR DISPLAYS (CONT'D)

<TABLE>
<CAPTION>
RADIO TDI
MARKET ----------------------------------------- -------------------------------
RANK BY AM/
MARKET POPULATION STATIONS FM FORMAT DISPLAY TYPE
- ------ ---------- -------- --- ------ ------------
<S> <C> <C> <C> <C> <C>
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
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(4) 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
</TABLE>

34
<PAGE> 37
RADIO STATIONS AND OUTDOOR DISPLAYS (CONT'D)

RADIO STATIONS SUBJECT TO DISPOSITION

<TABLE>
<CAPTION>
MARKET
RANK BY AM/
MARKET POPULATION CALLS FM FORMAT
- ------ ---------- ----- --- ------
<S> <C> <C> <C> <C> <C>
Boston, MA 10 WAAF(5) FM Album Oriented Rock
WEEI(5) AM Sports
WEGQ(5) FM 70's Oldies
WNFT(6) AM Urban
WRKO(5) AM News/Talk
Baltimore, MD 19 WCAO(7) AM Gospel
San Jose, CA 28 KUFX(8) FM Alternative
Worcester, MA 112 WWTM(5) AM Sports
</TABLE>

- ---------------
(1) Being acquired from Jacor Communications, Inc. and subject to LMA.
(2) Held in trust, with the Company being the sole beneficial owner thereof.
(3) Being acquired from Entercom Communications Corp. contract signed and FCC
approval pending.
(4) Operated by the Company pursuant to LMA.
(5) 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 pending.
(6) 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.
(7) Being sold to Jacor Communications, Inc. and subject to LMA; contract
signed and FCC approval pending.
(8) Held in trust for purposes of complying with FCC's radio local ownership
rules, with the Company the sole beneficial owner thereof. Being sold to
Jacor Communications, Inc.; contract signed and 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 and national advertising,
respectively. The major categories of the Company's 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

35
<PAGE> 38

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 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, one of the leading producers and
distributors of syndicated and network radio programming in the United States.
The Company also manages Westwood One pursuant to a management agreement and
provides the Company's stations with certain programming, including CBS Network
Radio News and CNN News.

COMPETITION

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.

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<PAGE> 39

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 advertising 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 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."

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 June 30, 1998, the Company had approximately 5,800 full-time
employees and approximately 1,900 part-time employees. Approximately 930 of the
Company's employees are represented by unions. The Company believes that its
relations with its employees and their unions are good.

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"). The Company has
also entered into employment agreements with certain of its high-profile on-air
personalities.

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<PAGE> 40

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

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<PAGE> 41

"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 to 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
45 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 shareholder; thus, the FCC views CBS as a single majority
shareholder of the Company. In the case of a single majority shareholder, the
interests of other

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<PAGE> 42

shareholders are not attributable unless the shareholders 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 shareholder.

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 shareholders, 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, 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
aliens. The Company's Amended 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

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<PAGE> 43

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 Amended Certificate authorizes the Company's Board of Directors to enforce
these prohibitions. In addition, the Amended 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. The
Company is a party to TBAs in several markets, almost all of which are in
connection with pending acquisitions. 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
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.

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 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

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<PAGE> 44

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 shareholder; 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 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

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<PAGE> 45

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.

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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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 September 17, 1998. Each
director will hold office until the next annual meeting of stockholders and
until his or her successor has been duly elected and qualified in accordance
with the Company's by-laws. 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..................... 46 Executive Vice President, Chief Financial Officer
and Treasurer 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. 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 the President and Chief Executive Officer and
a Director of Westwood One and a member of the Board of Trustees for the Museum
of Television and Radio. Mr. Karmazin was first elected to the Board of CBS in
1997.

Mr. Suleman has been Executive Vice President, Chief Financial Officer and
Treasurer 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 completion of the Offerings, CBS and the Company
expect to elect two additional directors of the Company who will be persons not
associated currently or formerly with CBS or the Company.

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<PAGE> 47

The Board of Directors will then consist of eight members, including six who are
directors, officers or executives of CBS. CBS 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-year terms and
each class as equal in number as possible.

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> 48

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 and the terms
of engagement of the Company's independent public accountants, and maintain
communications among the Board of Directors, such independent public accountants
and the Company's internal accounting staff with respect to accounting and audit
procedures, the implementation of recommendations by such independent public
accountants, 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 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 employees of CBS or any of its subsidiaries will not be
compensated for service on the Board of Directors or any committee thereof. It
is anticipated that other directors of the Company will receive customary
compensation for service on the Board of Directors or any committee thereof. All
directors will be reimbursed for travel expenses incurred on behalf of the
Company.

COMPENSATION, BENEFIT AND RETIREMENT PLANS

As described below, prior to the consummation of the Offerings, the Company
is expected to adopt, and the stockholders of the Company are 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 under 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 Plan. 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

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<PAGE> 49

Officer of the Company (the "Named Executive Officers"), for services rendered
in all capacities to CBS for the fiscal year ended December 31, 1997.

SUMMARY COMPENSATION TABLE FOR THE YEAR ENDED DECEMBER 31, 1997

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

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

(4) 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.

47
<PAGE> 50

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 8.57 514,000
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.

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

The Company is expected to adopt a long-term incentive plan which would
authorize the Company's Compensation Committee to grant various awards to key
executives of the Company, including but not limited to 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, restricted stock or units, and deferred shares (payable upon
the occurrence of specified triggering events). It is expected that

48
<PAGE> 51

million shares of Class A Common Stock of the Company will be available for
awards under the plan, and that there will be specified annual limits on the
number of stock option and/or stock appreciation rights awards that may be made
to any one participant.

Messrs. Karmazin and Suleman will continue to be eligible to receive awards
under the CBS 1993 Long-Term Incentive 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

The Company is expected to adopt an annual incentive plan that 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 based on one or more business criteria,
such as EBITDA, EBIT, free cash flow, earnings per share and stock price. Awards
will be limited to a maximum amount and will be payable in the form determined
by the Company's Compensation Committee, which could include cash, stock
options, stock appreciation rights, or other securities of the Company.

Messrs. Karmazin and Suleman will continue to be eligible to receive annual
incentive awards under, respectively, the CBS 1998 Executive Annual Incentive
Plan and the CBS Annual Performance Plan. 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 tax-qualified defined benefit pension plans for employees of the
Company who, immediately prior to the Offerings, were participants in
tax-qualified deferred benefit pension plans; 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 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 $1,284.04.

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

GROUP W 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

49
<PAGE> 52

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>

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 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 "Company Savings Plans"). The Company Savings Plans will permit
matching employer contributions following the Offerings in the form of cash or
company stock and company stock will be available as an investment alternative
with respect to employee contributions.

50
<PAGE> 53

PRINCIPAL STOCKHOLDER AND STOCK OWNERSHIP

STOCK OWNERSHIP OF THE COMPANY

CBS beneficially owns all of the outstanding shares of Common Stock of the
Company. Immediately after consummation of the Offerings, CBS will beneficially
own shares of Class B Common Stock, which will represent % of the
outstanding shares of Common Stock and will have approximately % of the
combined voting power of the outstanding shares of Common Stock (approximately
% and %, respectively, if the over-allotment options are exercised in
full).

STOCK OWNERSHIP OF CBS CORPORATION

The following table sets forth, as of June 30, 1998, the beneficial
ownership of the outstanding common stock, par value $1.00 per share, of CBS
(the only class of shares of CBS 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..................................... 454,516 shares(1) *
Farid Suleman.................................... 1,639,218 shares(1)(3) *
All directors and executive officers of the
Company as a group (4 persons)................. 10,203,660 shares(1)(2)(3) 1.4%
</TABLE>

- ---------------
(1) Includes the following CBS shares not owned by the indicated executive
officers on June 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 CBS common stock.

51
<PAGE> 54

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 % of the
combined voting power of all the outstanding Common Stock and approximately %
of the economic interest in the Company (or approximately % and %,
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 Amended 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 Offering.
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 & Co. 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 at least 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, newspaper, outdoor or other media. In addition, CBS itself is
a major advertiser, and in that capacity from time to time seeks promotional
time and space from the Company. Similarly, the Company promotes its programming
on CBS.

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

BOARD OF DIRECTORS

Promptly following the completion of the Offerings, CBS and the Company
expect to elect two additional directors of the Company who will be persons not
currently or formerly associated with CBS or the Company. 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

52
<PAGE> 55

Board of Directors will be divided into 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 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, nor any agreements entered
into in the future between the Company and CBS (for so long as CBS maintains
controlling beneficial ownership in the Company), have resulted or will 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."

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 filed with the Registration Statement of which this Prospectus forms a
part.

Intercompany Agreement

General Administrative Services. The Intercompany Agreement requires CBS
to continue to make available to the Company the range of services provided by
it prior to the Offerings. These services include, among others, certain
investor relations, executive, government affairs, human resources, legal,
investment, finance, real estate, information management, internal audit, cash
management, tax, transportation 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, which evidence each such party's fair and reasonable share of such
costs. Such allocation of costs for such services provided in prior years is
reflected in the Company's consolidated financial statements.

The Company intends to establish its own in-house capability to perform
such functions after the Offerings, although it may require an extended period
of time to become fully self-sufficient. The Company intends to obtain a
revolving credit facility and establish an independent cash management system at
the time of the Offerings or promptly thereafter.

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 President and Chief Executive Officer, and Mr. Suleman,
the Company's Chief Financial Officer and Treasurer, 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." 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
53
<PAGE> 56

(and possibly 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 rather than in the Company's plans. 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 present these officers and employees with incentives
different from those of the Company's stockholders, and may exacerbate the
conflicts described above and below.

Messrs. Karmazin and Suleman are also the President and Chief Executive
Officer, and Chief Financial Officer and Secretary, respectively, of Westwood
One, which duties will also impose demands on their time and present potential
conflicts of interest.

Free Promotional Time; Joint Marketing and Corporate Opportunities. The
Intercompany Agreement requires each party to make available at favorable rates
advertising time and space for promotional purposes in a manner substantially
consistent with past practice. The 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 fair to
both parties. The 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 discounted or free promotional time
offered to CBS or 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 leased by CBS or entities in which CBS has an interest. Further,
certain facilities of CBS are located in premises leased by the Company. The
Intercompany Agreement provides for the apportionment of costs related to the
use of such facilities.

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 without limitation 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 whatsoever 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. See "Management."

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 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 paid in order to
provide CBS with funds, in the form of payments of principal and interest on the
CBS Note, 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 possible
acquisitions.

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<PAGE> 57

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 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 Pension 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 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 (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, its
subsidiaries and CBS

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generally will make payments between them such that, with respect to tax returns
for any taxable period in which the Company or any of its subsidiaries is
included in the Consolidated Group, the amount of such consolidated or combined
taxes to be paid by the Company, subject to certain adjustments, generally 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 CBS arising from an
audit or otherwise). With respect to certain tax items, however, such as foreign
tax credits, alternative minimum tax credits, net operating losses and net
capital losses, the Company's right to reimbursement will be determined based on
the usage of such credits or losses by the Consolidated Group.

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), will be the
sole and exclusive agent for the Company in any and all matters relating to the
tax liabilities of the Company, will have sole and exclusive responsibility for
the preparation and filing of all 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 Company. The
Company will be responsible for preparing and filing any tax returns that
include only the Company and its subsidiaries and for any taxes with respect to
such tax returns.

CBS will control all the 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 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, foreign or provincial 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.

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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, government
affairs, human resources, legal, investment, finance, real estate, information
management, internal audit, cash management, tax, transportation and treasury
services. The costs of such services have been allocated according to
established methodologies determined on an annual basis by CBS, in its sole
discretion, after consultation with the Company, which evidence each such
party's fair and reasonable share of such costs. During 1996, 1997 and the six
months ended June 30, 1998, such allocated expenses included: legal services of
approximately $1.5 million, $1.9 million and $0.5 million; corporate rent of
approximately $3.4 million, $2.0 million and $0.8 million; management
information services of approximately $4.8 million, $6.8 million and $1.6
million; human resources of approximately $1.5 million, $1.4 million and $0.2
million; and insurance of approximately $1.4 million, $1.2 million and $0.8
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.

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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
shares of Class A Common Stock, shares of Class B Common
Stock and shares of preferred stock, par value $.01 per share (the
"Preferred Stock"), and to convert each outstanding share of its current common
stock into of a share of its newly created Class A Common Stock and
of a share 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 Amended and Restated Certificate of
Incorporation of the Company (the "Amended Certificate") and form of By-Laws of
the Company, a copy of each of which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.

The Amended Certificate provides for two classes of common stock, Class A
Common Stock and Class B Common Stock, the two classes of 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 Amended Certificate, and subject to any voting rights granted
to holders of any outstanding Preferred Stock, amendments to the Amended
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 Amended 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 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 Amended 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 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 shall not convert, and thereafter shall 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
Amended Certificate to provide for the conversion of shares of Class B Common
Stock into shares of Class A Common Stock, at some 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" shall mean the transfer of the Common Stock
beneficially owned by CBS to 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.

PREFERRED STOCK

The Board of Directors has the authority, without further action by the
stockholders, to issue up to 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
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.

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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 Amended 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 Amended Certificate (whether directly or indirectly
through any merger of the Company with any other entity) which is inconsistent
with, any provision of the Amended Certificate relating to the classification of
the Board of Directors, the filling of vacancies on the Board of Directors, 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, as well as
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 Amended 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 Delaware General Corporation Law ("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 Amended
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 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 Amended 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, in accordance with the DGCL, such provision does not
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 Amended Certificate and 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 employee or agent of the Company (or
their estates, if applicable), 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, 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 or other enterprise. The Company
will so indemnify such officer or director, and may so indemnify such employee
or agent (if indemnification is authorized by the Board of Directors), in the
case of such actions (whether or not by or in the right of the Company) 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
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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 Amended Certificate. The Amended
Certificate and 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.

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

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 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 (x) 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 (y) 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.

TRANSFER AGENT AND REGISTRAR

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

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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.

CREDIT AGREEMENT

Concurrently with the consummation of the Offerings, the Company expects to
enter into a multi-year senior unsecured revolving credit facility (the "Credit
Facility") with a syndicate of banks, pursuant to which up to approximately $1.0
billion will be available for revolving loans. The Credit Facility will contain
various affirmative and restrictive covenants and events of default that are
customary for a facility of this type.

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 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.

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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 have been registered under the Securities Act and
applicable state securities laws. 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 February 1, 2006.

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 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,

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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 August 31, 1998, American Radio notified the holders of the 7%
Convertible Exchangeable Preferred Stock (the "7% Preferred Stock") that, as of
September 30, 1998, American Radio will issue 7% Convertible Subordinated
Debentures Due 2011 (the "7% Debentures") in exchange for the then outstanding
shares of such 7% 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 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 July 31,
1998, the outstanding balance of the 7% Preferred Stock on this basis was $81.6
million.

The indenture pursuant to which the 7% Debentures were issued 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
shares of Class A Common Stock ( shares if the Underwriters'
over-allotment options are exercised in full). In addition, the Company will
have outstanding 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 tradeable 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 (a) 1% of the then-outstanding shares of Class A Common Stock and (b)
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. 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

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Company's future ability to raise capital through public offerings of equity
securities. See "Risk Factors -- Shares Eligible for Future Sale."

CERTAIN 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.

PROSPECTIVE NON-UNITED STATES INVESTORS ARE URGED TO CONSULT THEIR TAX
ADVISORS REGARDING THE UNITED STATES FEDERAL, STATE, LOCAL AND NON-UNITED STATES
INCOME AND OTHER TAX CONSEQUENCES OF OWNING AND DISPOSING OF CLASS A COMMON
STOCK.

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

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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 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 (a) a United States person, (b) a
"controlled foreign corporation" for United States tax purposes or (c) 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.

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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.

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UNDERWRITING

Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and
are acting as representatives (the "U.S. Representatives") of
each of the 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 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..........................................

--------
Total.................................................
========
</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
and are acting as lead managers (the "Lead Managers"). Subject to the terms
and conditions set forth in the International Purchase Agreement, and
concurrently with the sale of 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 have agreed to purchase from the Company, an
aggregate of 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.

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. Representatives have 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 options to the U.S. Underwriters, exercisable for
30 days after the date of this Prospectus, to purchase up to an aggregate of
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 these options 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 these options,
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 options to the International Managers, exercisable for
30 days after the

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<PAGE> 72

date of this Prospectus, to purchase up to an aggregate of 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 U.S. Underwriters have reserved for
sale, at the initial public offering price, up to shares of Class A
Common Stock offered hereby to be sold to certain directors, officers, employees
and related persons of the Company. 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 Stock Option Plan or in connection
with future acquisitions made by the Company 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 that transfers, in whole or in part, the
economic consequence of ownership of the Common Stock whether any such swap or
transaction 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 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. Representatives
and the Lead Managers. 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. Representatives and Lead
Managers 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.

Application will be made for listing the Class A Common Stock on the NYSE
under the symbol "INF." 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.

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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. Representatives are 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.
Representatives and Lead Managers, respectively, may reduce that short position
by purchasing Class A Common Stock in the open market. The U.S. Representatives
and Lead Managers, respectively, may also elect to reduce any short position by
exercising all or part of the over-allotment option described above.

The U.S. Representatives and Lead Managers, respectively, may also impose a
penalty bid on certain Underwriters and selling group members. This means that
if the U.S. Representatives or the Lead Managers purchase 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, they 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.

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. Representatives or the Lead Managers 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 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.

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.

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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.

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.

72
<PAGE> 75

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 six months ended June 30,
1997 and 1998 (unaudited)................................. F-3
Combined Balance Sheets as of December 31, 1996 and 1997 and
June 30, 1998 (unaudited)................................. F-4
Combined Statements of Changes in Stockholders' Equity for
the years ended December 31, 1995, 1996 and 1997 and the
six months ended June 30, 1998 (unaudited)................ F-5
Combined Statements of Cash Flows for the years ended
December 31, 1995, 1996 and 1997 and the six months ended
June 30, 1997 and 1998 (unaudited)........................ F-6
Notes to Combined Financial Statements...................... F-7
</TABLE>

II AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report................................ F-20
Consolidated Balance Sheets as of December 31, 1996 and
1997...................................................... F-21
Consolidated Statements of Operations for the years ended
December 31, 1995, 1996 and 1997.......................... F-23
Consolidated Statements of Stockholders' Equity (Deficiency)
for the years ended December 31, 1995, 1996 and 1997...... F-24
Consolidated Statements of Cash Flows for the years ended
December 31, 1995, 1996 and 1997.......................... F-26
Notes to Consolidated Financial Statements.................. F-27
Unaudited Condensed Consolidated Balance Sheets as of
December 31, 1997 and March 31, 1998...................... F-70
Unaudited Condensed Consolidated Statements of Operations
for the three months ended
March 31, 1997 and 1998................................... F-72
Unaudited Condensed Consolidated Statements of Cash Flows
for the three months ended March 31, 1997 and 1998........ F-73
Notes to Consolidated Unaudited Condensed Financial
Statements................................................ F-74
</TABLE>

III INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES (OLD INFINITY)

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report................................ F-88
Consolidated Balance Sheets as of December 31, 1995 and
1996...................................................... F-89
Consolidated Statements of Earnings for the years ended
December 31, 1995 and 1996................................ F-90
Consolidated Statements of Cash Flows for the years ended
December 31, 1995 and 1996................................ F-91
Consolidated Statements of Changes in Stockholders' Equity
for the years ended December 31, 1995 and 1996............ F-92
Notes to Consolidated Financial Statements.................. F-93
</TABLE>

F-1
<PAGE> 76

When the Reorganization referred to in notes 1 and 16(b) 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(a) which is as of
September 18, 1998
and note 16(b) which is as of
September , 1998.

F-2
<PAGE> 77

INFINITY BROADCASTING CORPORATION

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

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
---------------------------------- ---------------------
1995 1996 1997 1997 1998
-------- -------- ---------- -------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Total revenues.................... $245,653 $637,883 $1,691,517 $789,098 $ 897,045
Less agency commissions........... (29,365) (83,795) (211,426) (97,707) (111,673)
-------- -------- ---------- -------- ---------
Net revenues...................... 216,288 554,088 1,480,091 691,391 785,372
-------- -------- ---------- -------- ---------
Operating expenses excluding
depreciation and amortization... 136,419 343,920 888,405 432,900 465,776
Depreciation and amortization
(notes 6 and 7)................. 17,914 57,528 197,135 98,351 105,939
Corporate expenses................ 8,736 13,434 22,277 10,965 8,870
-------- -------- ---------- -------- ---------
Total operating expenses.......... 163,069 414,882 1,107,817 542,216 580,585
-------- -------- ---------- -------- ---------
Operating earnings................ 53,219 139,206 372,274 149,175 204,787
Interest expense.................. -- -- (3,645) (3,434) (4,760)
Other income, net................. 191 309 5,978 547 521
-------- -------- ---------- -------- ---------
Earnings before income taxes...... 53,410 139,515 374,607 146,288 200,548
Income taxes (note 5)............. 25,737 67,949 196,978 76,975 102,229
-------- -------- ---------- -------- ---------
Net earnings...................... $ 27,673 $ 71,566 $ 177,629 $ 69,313 $ 98,319
======== ======== ========== ======== =========
Net earnings per common share --
basic and diluted............... $ $ $ $ $
======== ======== ========== ======== =========
Weighted average shares
outstanding -- basic and
diluted.........................
======== ======== ========== ======== =========
</TABLE>

See accompanying Notes to Combined Financial Statements.
F-3
<PAGE> 78

INFINITY BROADCASTING CORPORATION

COMBINED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

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

Cash and cash equivalents............................. $ 19,882 $ 22,522 $ 43,391
Receivables (net of allowance for doubtful accounts of
$11,417, $15,086 and $30,569, respectively)......... 299,532 334,914 417,446
Prepaid and other current assets...................... 31,541 27,255 59,430
Deferred tax assets (note 5).......................... 16,473 14,334 19,871
Assets held for sale.................................. 70,347 -- --
---------- ---------- -----------
Total current assets.................................. 437,775 399,025 540,138
Property and equipment, net (note 6).................. 124,615 118,471 240,768
Intangible assets, net (note 7)....................... 6,588,242 6,433,283 9,438,184
Other assets.......................................... 111,320 123,324 141,230
---------- ---------- -----------
Total assets.......................................... $7,261,952 $7,074,103 $10,360,320
========== ========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued expenses (note 8)........ $ 131,815 $ 120,356 $ 192,025
Accrued compensation.................................. 26,554 30,904 40,150
Accrued interest...................................... 5,440 27 7,948
Other current liabilities............................. 563 532 3,291
---------- ---------- -----------
Total current liabilities............................. 164,372 151,819 243,414
Long-term debt (note 9)............................... 149,931 1,560 725,309
Deferred taxes (note 5)............................... 479,987 484,364 1,074,147
Other non-current liabilities......................... 48,961 38,972 45,101
---------- ---------- -----------
Total liabilities..................................... 843,251 676,715 2,087,971
---------- ---------- -----------

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

Stockholders' equity:
Preferred stock, par value $.01, shares
authorized, no shares issued and outstanding........ -- -- --
Class A common stock, par value $ ,
shares authorized, no shares issued and
outstanding......................................... -- -- --
Class B common stock, par value $ ,
shares authorized, shares issued
and outstanding..................................... -- -- --
Contributed capital in excess of par value............ 6,216,175 6,017,233 7,793,875
Accumulated earnings.................................. 202,526 380,155 478,474
---------- ---------- -----------
Total stockholders' equity............................ 6,418,701 6,397,388 8,272,349
---------- ---------- -----------
Total liabilities and stockholders' equity............ $7,261,952 $7,074,103 $10,360,320
========== ========== ===========
</TABLE>

See accompanying Notes to Combined Financial Statements.
F-4
<PAGE> 79

INFINITY BROADCASTING CORPORATION

COMBINED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(DOLLARS AND SHARE AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
CLASS A COMMON CLASS B COMMON CONTRIBUTED
PREFERRED STOCK STOCK 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
Intercompany activity,
net...................... (83,966) (83,966)
-- ------- -- ------- -- -------- ---------- -------- ----------
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
Intercompany activity,
net...................... (19,261) (19,261)
-- ------- -- ------- -- -------- ---------- -------- ----------
Balance at December 31,
1996..................... -- -- -- -- 6,216,175 202,526 6,418,701
Net earnings............... 177,629 177,629
Intercompany activity,
net...................... (198,942) (198,942)
-- ------- -- ------- -- -------- ---------- -------- ----------
Balance at December 31,
1997..................... -- -- -- -- 6,017,233 380,155 6,397,388
Net earnings (unaudited)... 98,319 98,319
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
Intercompany activity, net
(unaudited).............. (189,934) (189,934)
-- ------- -- ------- -- -------- ---------- -------- ----------
Balance at June 30, 1998
(note 16) (unaudited).... -- $ -- -- $ -- $ $7,793,875 $478,474 $8,272,349
== ======= == ======= == ======== ========== ======== ==========
</TABLE>

See accompanying Notes to Combined Financial Statements.
F-5
<PAGE> 80

INFINITY BROADCASTING CORPORATION

COMBINED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 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 $ 69,313 $ 98,319
Adjustments to reconcile net
earnings to net cash provided by
operating activities:
Depreciation and amortization...... 17,914 57,528 197,135 98,351 105,939
Deferred taxes..................... 2,073 3,012 13,883 5,426 (3,812)
Gain on sales of assets, net....... -- -- (3,584) 416 --
Changes in assets and liabilities,
net of acquisitions and
dispositions:
(Increase) decrease in accounts
receivable....................... (4,015) (10,248) (35,382) 9,769 5,937
(Increase) decrease in other
assets........................... 1,500 (3,100) (14,924) (23,830) (10,203)
Increase (decrease) in accounts
payable and accrued expenses..... 2,259 4,611 (11,459) 10,834 13,897
Increase (decrease) in accrued
interest......................... -- -- (3,858) (3,858) 1,045
Increase (decrease) in other
liabilities...................... 1,997 (19,426) (9,176) (5,284) (8,410)
----------- ----------- --------- --------- -----------
Net cash provided by operating
activities....................... 49,401 103,943 310,264 161,137 202,712
----------- ----------- --------- --------- -----------
Cash flows from investing
activities:
Proceeds from dispositions......... -- -- 87,475 74,525 11,831
Business acquisitions and
investments...................... (1,204,442) (994,165) (50,341) (45,764) (1,393,326)
Capital expenditures............... (9,368) (6,682) (15,264) (5,319) (10,987)
----------- ----------- --------- --------- -----------
Net cash (used for) provided by
investing activities............. (1,213,810) (1,000,847) 21,870 23,442 (1,392,482)
----------- ----------- --------- --------- -----------
Cash flows from financing
activities:
Receipts from (payments to) CBS,
net.............................. 1,164,221 916,771 (179,563) (27,940) 1,777,215
Repayment of debt.................. -- -- (149,931) (149,931) (566,576)
----------- ----------- --------- --------- -----------
Net cash provided by (used for)
financing activities............. 1,164,221 916,771 (329,494) (177,871) 1,210,639
----------- ----------- --------- --------- -----------
Increase (decrease) in cash and
cash equivalents................. (188) 19,867 2,640 6,708 20,869
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 $ 26,590 $ 43,391
=========== =========== ========= ========= ===========
Supplemental disclosures of cash
flow information:
Cash paid during the year for:
Interest........................... $ -- $ -- $ 9,058 $ 8,852 $ 3,715
Income taxes....................... 23,664 64,937 163,720 71,549 106,041
</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> 81

INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF JUNE 30, 1998
AND THE SIX MONTH PERIODS ENDED JUNE 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").

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 June 30, 1998, CBS will effect a reorganization (the
"Reorganization") by contributing to the Company at book value 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. 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. 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.

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

F-7
<PAGE> 82
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

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

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," 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. Identifiable intangible assets and goodwill are
amortized using the straight-line method over their estimated lives but not in
excess of 40 years. 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.

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
F-8
<PAGE> 83
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

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

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.

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.

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.

(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
F-9
<PAGE> 84
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

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

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.

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............................................ 107 --
Assets held for sale................................... 70 --
Property and equipment................................. 39 122
Identifiable intangible assets:
FCC licenses........................................... 996 2,200
Other.................................................. 277 --
Goodwill............................................... 3,630 887
Other assets........................................... 31 44
Debt................................................... (149) (1,291)
Deferred income taxes.................................. (328) (588)
Other liabilities...................................... (146) (80)
------ -------
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 six month period ended June 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 EXCEPT PER-SHARE AMOUNTS)

<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS
DECEMBER 31, ENDED
---------------- JUNE 30,
1996 1997 1998
------ ------ ----------
<S> <C> <C> <C>
Net revenues........................................... $1,305 $1,873 $953
Net earnings........................................... 82 161 88
Net earnings per common share-basic and diluted........
</TABLE>

F-10
<PAGE> 85
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

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

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 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.

F-11
<PAGE> 86
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

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

(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>

Deferred income taxes result from temporary differences in the financial
bases and tax bases of assets and liabilities. As of December 31, 1996 and 1997,
deferred tax assets were $16.5 million and $14.3 million, respectively, and
deferred tax liabilities were $480.0 million and $484.4 million, respectively.
The net deferred tax liabilities at December 31, 1996 and 1997 of $463.5 million
and $470.1 million result primarily from temporary differences related to
intangible assets. During 1997, the Company utilized net operating loss
carryforwards of $19.4 million arising from previous acquisition transactions.

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-12
<PAGE> 87
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

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

(6) PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- JUNE 30,
1996 1997 1998
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Land and buildings................................. $ 53,577 $ 70,030 $115,606
Equipment.......................................... 101,750 99,142 175,790
Construction in progress........................... 4,593 4,922 12,238
-------- -------- --------
159,920 174,094 303,634
Accumulated depreciation and amortization.......... (35,305) (55,623) (62,866)
-------- -------- --------
Property and equipment, net........................ $124,615 $118,471 $240,768
======== ======== ========
</TABLE>

For the years ended December 31, 1995, 1996 and 1997 and for the six month
periods ended June 30, 1997 and 1998, depreciation expense totaled $4.1 million,
$11.7 million, $20.4 million, $9.9 million and $10.4 million, respectively.

(7) INTANGIBLE ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ JUNE 30,
1996 1997 1998
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Goodwill....................................... $4,966,766 $4,958,090 $5,856,176
FCC licenses................................... 1,456,525 1,486,797 3,689,135
Transit franchise agreements................... 276,700 276,801 276,801
---------- ---------- ----------
6,699,991 6,721,688 9,822,112
Accumulated amortization....................... (111,749) (288,405) (383,928)
---------- ---------- ----------
Intangible assets, net......................... $6,588,242 $6,433,283 $9,438,184
========== ========== ==========
</TABLE>

For the years ended December 31, 1995, 1996 and 1997 and for the six month
periods ended June 30, 1997 and 1998, amortization expense totaled $13.8
million, $45.8 million, $176.7 million, $88.5 million and $95.5 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 June 30, 1998, accumulated amortization for goodwill was $99.3 million,
$224.7 million and $290.0 million, respectively, accumulated amortization for
FCC licenses was $12.5 million, $49.6 million and $72.7 million, respectively,
and accumulated amortization for transit franchise agreements was $0, $14.1
million and $21.2 million, respectively.

F-13
<PAGE> 88
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF JUNE 30, 1998
AND THE SIX MONTH PERIODS ENDED JUNE 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,
-------------------- JUNE 30,
1996 1997 1998
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Accounts payable................................... $ 23,765 $ 30,931 $ 44,223
Accrued transit franchise payments................. 14,752 20,630 20,188
Accrued programming losses......................... 44,004 13,081 13,247
Other.............................................. 49,294 55,714 114,367
-------- -------- --------
Total accounts payable and accrued expenses........ $131,815 $120,356 $192,025
======== ======== ========
</TABLE>

(9) LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------ JUNE 30,
1996 1997 1998
-------- ------ --------
(IN THOUSANDS)
<S> <C> <C> <C>
9% Senior Subordinated Notes......................... $ -- $ -- $175,000
9 3/4% Senior Subordinated Notes..................... -- -- 150,000
11 3/8% Cumulative Exchangeable Preferred Stock...... -- -- 215,550
7% Convertible Exchangeable Preferred Stock.......... -- -- 142,353
10 3/8% Notes........................................ 149,931 -- --
Other................................................ 563 2,092 4,020
Unamortized premium, net............................. -- -- 41,677
-------- ------ --------
Total debt........................................... 150,494 2,092 728,600
Less current portion................................. (563) (532) (3,291)
-------- ------ --------
Long-term debt, net of current portion............... $149,931 $1,560 $725,309
======== ====== ========
</TABLE>

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 were recorded at their fair market value
as of the acquisition date, which resulted in a net premium of approximately
$42.7 million.

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
(at par, for the 7% Convertible Exchangeable Preferred Stock), 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.

F-14
<PAGE> 89
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

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

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

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

As of June 30, 1998, $175.0 million (face value) of these 9% Notes were
outstanding. In July 1998, $6.5 million of the outstanding principal was
redeemed pursuant to the offer to purchase described above.

Interest 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")

As of June 30, 1998, $150.0 million (face value) of these 9 3/4% Notes were
outstanding. In July 1998, $1.0 million of the then outstanding principal was
redeemed pursuant to the offer to purchase described above.

Interest is payable semi-annually on June 1 and December 1 with the face
amount of the 9 3/4% Notes due on February 1, 2006. 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% Cumulative Exchangeable Preferred Stock

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

The 11 3/8% Debentures are redeemable at the option of American Radio, for
cash at any time 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. American Radio is required, subject
to certain conditions, to redeem all 11 3/8% Debentures outstanding on January
15, 2009 at a redemption price equal to 100% of the principal amount, plus any
accrued and unpaid interest.

7% Convertible Exchangeable Preferred Stock (the "Convertible Preferred
Stock")

As of June 30, 1998, 137,500 shares (or 2,750,000 Depositary Shares with
each Depositary Share representing ownership of one-twentieth of a share of
Convertible Preferred Stock) were outstanding. Prior to the acquisition of
American Radio, these shares were convertible, at the option of the holder at
any time, into shares of American Radio common stock at a conversion price of
$42.50 per share of common stock (equivalent to a conversion rate of 1.1765
shares of common stock per Depositary Share). Subsequent to the acquisition,
these securities are convertible at the option of the holder into merger
consideration consisting of cash (equivalent to $44.00 per share of common
stock) and shares of American Tower Corporation ("Tower") (formerly a wholly
owned subsidiary of American Radio and now an independently publicly traded
company). The Company currently holds sufficient shares of Tower to satisfy this
obligation. During July 1998, 58,673 shares of Convertible Preferred Stock were
redeemed for $60.7 million, and as of July 31, 1998 the remaining balance
outstanding was $81.6 million.

F-15
<PAGE> 90
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

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

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 American Radio 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, 1996) and are payable quarterly in arrears on March
31, June 30, September 30 and December 31, commencing September 30, 1996. The
ability of American Radio 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.

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 $3.3 million of long-term debt maturing during the year
ended December 31, 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-16
<PAGE> 91
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF JUNE 30, 1998
AND THE SIX MONTH PERIODS ENDED JUNE 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. 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-17
<PAGE> 92
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 (INFORMATION AS OF JUNE 30, 1998
AND THE SIX MONTH PERIODS ENDED JUNE 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 Company accounts for stock-based compensation plans
under Opinion 25. During 1995, 1996 and 1997, certain of the Company's employees
were granted 444,500, 993,650 and 2,735,600 CBS stock options under CBS's stock
based compensation plan. 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.

For purposes of the pro forma computation, 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.

Had compensation cost for these plans 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 EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Net earnings as reported............................. $27,673 $71,566 $177,629
Pro forma net earnings............................... 26,994 68,670 162,941
Net earnings per common share as reported............
Pro forma net earnings per common share..............
</TABLE>

(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. 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. 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 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.

F-18
<PAGE> 93
INFINITY BROADCASTING CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS

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

(15) QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
1996 1997
----------------------------------------- -------------------
1ST 2ND 3RD 4TH 1ST 2ND
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net revenues............ $120,955 $145,116 $135,988 $152,029 $313,034 $378,357
Operating
expenses.............. 106,138 103,246 99,964 105,534 271,210 271,006
Operating
earnings.............. 14,817 41,870 36,024 46,495 41,824 107,351
Net earnings............ 7,650 21,418 18,449 24,049 18,658 50,655
Net earnings per
share.................
Earnings before
interest, taxes,
depreciation and
amortization.......... 30,554 55,238 49,035 62,216 91,700 156,373

<CAPTION>
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
1997 1998
------------------- -------------------
3RD 4TH 1ST 2ND
QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenues............ $376,898 $411,802 $329,608 $455,764
Operating
expenses.............. 278,215 287,386 265,729 314,856
Operating
earnings.............. 98,683 124,416 63,879 140,908
Net earnings............ 46,654 61,662 31,442 66,877
Net earnings per
share.................
Earnings before
interest, taxes,
depreciation and
amortization.......... 149,415 177,899 112,990 198,257
</TABLE>

(16) SUBSEQUENT EVENTS

(a) Declaration of Dividends (as of September 18, 1998)

Old Infinity declared a dividend in the amount of $2.5 billion to CBS
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.

(b) Reorganization (as of , 1998)

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

F-19
<PAGE> 94

INDEPENDENT AUDITORS' REPORT

[TO BE PROVIDED BY AMENDMENT]

F-20
<PAGE> 95

AMERICAN RADIO SYSTEMS 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................................. $ 10,447 $ 16,643
Accounts receivable (less allowance for doubtful accounts
of $4,560 in 1996 and $7,703 in 1997).................. 51,897 90,468
Employee and other related-party receivables.............. 249 144
Prepaid expenses and other assets......................... 3,354 5,009
Current portion of investment notes receivable (less
valuation allowance of $6,750 in 1997)................. 2,250
Deferred income taxes..................................... 3,370 6,428
-------- ----------
Total current assets.............................. 69,317 120,942
-------- ----------
PROPERTY AND EQUIPMENT -- NET............................... 90,247 250,189
-------- ----------
OTHER ASSETS:
Restricted cash........................................... 22,141
Investment note receivable-related party (less valuation
allowance of $500 in 1996)............................. 743
Investment notes receivable............................... 69,177 36,812
Intangible assets--net:
Goodwill............................................... 232,908 353,897
FCC licenses........................................... 233,558 1,112,273
Other intangible assets................................ 26,794 38,884
Unallocated purchase price, net........................ 108,192
Deposits and other long-term assets....................... 26,064 10,875
Net assets held under exchange agreement.................. 47,495
-------- ----------
Total other assets................................ 636,739 1,683,074
-------- ----------
TOTAL....................................................... $796,303 $2,054,205
======== ==========
</TABLE>

See notes to Consolidated Financial Statements.
F-21
<PAGE> 96

AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<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...................... $ 561 $ 450
Accounts payable.......................................... 7,085 9,687
Accrued compensation...................................... 3,027 3,456
Accrued expenses.......................................... 16,355 20,708
Accrued interest.......................................... 7,303 14,177
-------- ----------
Total current liabilities......................... 34,331 48,478
-------- ----------
DEFERRED INCOME TAXES....................................... 33,205 196,028
-------- ----------
OTHER LONG-TERM LIABILITIES................................. 2,149 8,954
-------- ----------
LONG-TERM DEBT.............................................. 330,111 923,704
-------- ----------
MINORITY INTEREST IN SUBSIDIARIES........................... 344 626
-------- ----------
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....................................................... $796,303 $2,054,205
======== ==========
</TABLE>

See notes to Consolidated Financial Statements.
F-22
<PAGE> 97

AMERICAN RADIO SYSTEMS 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................................................ $97,772 $178,019 $374,118
------- -------- --------
OPERATING EXPENSES:
Operating expenses excluding depreciation and
amortization, net local marketing agreement and
corporate general and administrative expenses.......... 66,448 120,004 241,836
Net local marketing agreement expenses.................... 600 8,128 2,314
Depreciation and amortization............................. 12,364 17,810 64,743
Merger expenses........................................... 1,985
Corporate general and administrative...................... 3,908 5,046 8,207
------- -------- --------
Total expenses....................................... 83,320 150,988 319,085
------- -------- --------
OPERATING INCOME............................................ 14,452 27,031 55,033
------- -------- --------
OTHER INCOME (EXPENSE):
Interest expense.......................................... (12,497) (22,287) (59,749)
Interest income and other, net............................ 2,435 5,525 2,364
Gains (losses) on sale of assets and other, net........... 11,544 (308) (5,713)
------- -------- --------
Total other income (expense)......................... 1,482 (17,070) (63,098)
------- -------- --------
INCOME (LOSS) FROM OPERATIONS BEFORE EXTRAORDINARY LOSSES
AND INCOME TAXES.......................................... 15,934 9,961 (8,065)
INCOME TAX (BENEFIT) PROVISION.............................. 6,829 4,826 (416)
------- -------- --------
INCOME (LOSS) BEFORE EXTRAORDINARY LOSSES................... 9,105 5,135 (7,649)
EXTRAORDINARY LOSSES ON EXTINGUISHMENT OF DEBT, NET OF
INCOME TAX BENEFIT OF $614 AND $1,476 IN 1995 AND 1997,
RESPECTIVELY.............................................. (817) (2,333)
------- -------- --------
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 --
BASIC..................................................... $ 7,473 $ 162 $(41,146)
======= ======== ========
BASIC PER SHARE AMOUNTS:
Before extraordinary items................................ $ 0.70 $ 0.01 $ (1.42)
Extraordinary items....................................... (0.07) (0.09)
------- -------- --------
Net income (loss)......................................... $ 0.63 $ 0.01 $ (1.51)
======= ======== ========
DILUTED PER SHARE AMOUNTS:
Before extraordinary items................................ $ 0.65 $ 0.01 $ (1.42)
Extraordinary items....................................... (0.06) (0.09)
------- -------- --------
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-23
<PAGE> 98

AMERICAN RADIO SYSTEMS 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-24
<PAGE> 99

AMERICAN RADIO SYSTEMS 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........... 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........... $(9,982) $ 0 $660,865
======= ======== ========
</TABLE>

See notes to Consolidated Financial Statements.

F-25
<PAGE> 100

AMERICAN RADIO SYSTEMS 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:
Net income (loss)......................................... $ 8,288 $ 5,135 $ (9,982)
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 12,052
Depreciation and amortization........................... 12,364 17,810 64,744
Amortization of deferred financing costs................ 278 868 1,475
Amortization of debt discount........................... 84 100
Amortization of debt premium............................ (574)
Provision for losses on accounts receivable............. 1,387 2,977 4,608
Provision for loss on investment note receivable........ 6,750
Extraordinary losses, net............................... 817 2,333
Deferred taxes.......................................... 3,490 940 (5,481)
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
Minority interest in net earnings of subsidiaries and
investments........................................... 584
Change in assets and liabilities, net of effects of
mergers and acquisitions:
Accounts receivable................................... (6,030) (27,872) (15,433)
Prepaid expenses and other assets..................... (919) (1,202) (783)
Restricted cash....................................... (703)
Accounts payable and accrued expenses................. 2,609 10,846 (5,844)
Accrued interest...................................... (993) 6,789 1,738
-------- -------- --------
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) (25,109) (45,730)
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 tower properties................. (7,300) (9,797) (181,333)
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) (11,371)
Deposits and other long-term assets....................... (6,649) (20,303) 6,391
-------- -------- --------
Cash used for investing activities...................... (81,183) (421,885) (645,073)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under the Credit Agreements.................... 225,000 154,000 790,500
Repayments under the Credit Agreements.................... (202,500) (151,500) (351,000)
Borrowings under other obligations........................ 750
Repayment of other obligations............................ (1,288) (454) (1,227)
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) (8,195)
Redemption of Series C Senior Common Stock................ (14,580)
Dividends paid............................................ (4,973) (15,613)
Distribution to minority shareholder...................... (419)
Purchase of treasury stock................................ (438)
-------- -------- --------
Cash provided by financing activities................. 72,180 412,784 607,961
-------- -------- --------
INCREASE IN CASH AND CASH EQUIVALENTS....................... 721 6,558 6,196
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR................ 3,168 3,889 10,447
-------- -------- --------
CASH AND CASH EQUIVALENTS, END OF YEAR...................... $ 3,889 $ 10,447 $ 16,643
======== ======== ========
</TABLE>

See notes to Consolidated Financial Statements.
F-26
<PAGE> 101

AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

American Radio Systems Corporation and subsidiaries (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.

American Tower Systems Corporation and subsidiaries (formerly American
Tower Systems Holding Corporation) (collectively, the "Tower Subsidiary," "ATS"
or "Tower") is a wholly-owned subsidiary of ARS. ATS was incorporated in July
1995 for the purpose of acquiring, developing, marketing, managing and operating
wireless communications tower sites throughout the United States, for use by
communications related businesses, wireless communications providers, and
television and radio broadcasters. ATS' primary business is the leasing of
antennae sites on multi-tenant towers and rooftops, primarily for its own towers
and, to a lesser extent, for unaffiliated communications site owners. In support
of its rental business, ATS also offers its customers network development
services, including site acquisition, zoning, antennae installation, site
construction and network design. These services are offered on a time and
materials or fixed fee basis or incorporated into build to suit construction
contracts. ATS is also engaged in the video, voice and data transmission
business, which it currently conducts in the New York City to Washington D.C.
corridor and in Texas.

Pending Sale of Radio Operations and Tower Separation -- In September 1997,
ARS entered into a merger agreement with a subsidiary of CBS Corporation
(formerly Westinghouse Electric Corporation) ("CBS") which was amended and
restated in December 1997 (the "Merger Agreement") pursuant to which the CBS
subsidiary will merge with and into ARS. Each holder of ARS common stock at the
effective time of the merger will receive (i) $44.00 per share in cash, and (ii)
one share, of the same class, of Tower common stock owned by ARS (the "Tower
Separation"). As a result of the Tower Separation, Tower will cease to be a
subsidiary of, or otherwise be affiliated with, ARS and will thereafter operate
as an independent publicly held company. ARS and Tower will enter into certain
agreements pursuant to the Merger Agreement providing for, among other things,
the orderly separation of ARS and Tower, the transfer of lease obligations to
Tower of leased space on certain towers owned or leased by ARS to Tower, and the
allocation of certain tax liabilities between ARS and Tower. The Tower
Separation will result in a taxable gain to ARS, of which $20.0 million will be
borne by ARS and the remaining obligation (currently estimated at approximately
$113.0 to $153.0 million) will be paid by Tower pursuant to provisions of the
Merger Agreement (the "Merger Tax Liability"). The Merger Tax Liability is based
on an assumed fair market value of the Tower Common Stock of $16.00 per share.
Such estimated Merger Tax Liability would increase or decrease by $14.8 million
for each $1.00 per share increase or decrease in the fair market value of ATS
common Stock. (See Note 10.)

The Merger has been approved by stockholders of ARS who hold sufficient
voting power to approve such action. Consummation of the Merger is subject to,
among other things, the expiration or earlier termination of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR
Act) and the approval by the Federal Communications Commission ("FCC") of the
transfer of control of ARS' FCC licenses with respect to its radio stations to
CBS. Subject to the satisfaction of such conditions, the Merger is expected to
be consummated in the spring of 1998.

See Note 15 for recent developments.

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. The Company also consolidates its 50.1% interest
and its 70.0% interest in two other limited liability communica-

F-27
<PAGE> 102
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
tions tower companies, with the other companies' investment reflected as
minority interest in the accompanying balance sheet. Equity in earnings (loss)
of affiliates not consolidated and the minority interest in earnings (loss) of
consolidated affiliates is reported as a component of gains on sales of assets
and other, net in the accompanying consolidated statement of operations. There
were no such amounts for the years ended December 31, 1995 and 1996; such
amounts approximated $362,000 for the year ended December 31, 1997.

Information with respect to the Company's radio and tower segments is
presented within these notes to consolidated financial statements, principally
Note 14. The Company believes that the tower segment should not be accounted for
as a discontinued operation based upon the Company's belief that a measurement
date will not occur until such time as the Merger is granted regulatory
approval. Further, in the event the Merger is not consummated, the Company's
board of directors will determine, based on the facts and circumstances then
existing, whether the distribution of Tower to the Company's stockholders will
be in their best interests. Accordingly, the tower segment has not been reported
as a discontinued operation in the accompanying consolidated financial
statements.

Revenue Recognition -- Revenues are recognized when advertisements are
broadcast and transmitting services are provided. Tower and sublease revenues
are recognized when earned. Escalation clauses and other incentives present in
lease agreements are recognized on a straight-line basis over the term of the
leases. Management fee, consulting and video revenues are recognized as such
services are provided.

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.

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 12,052
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

F-28
<PAGE> 103
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
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 12.)

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.

A reconciliation of the denominator for the basic and diluted per share
calculations is as follows:

<TABLE>
<CAPTION>
1995 1996 1997
------ ------ ------
<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, communications sites and
related assets and the net amount of interest cost associated with significant
capital additions. Approximately $120,000 and $921,000 of interest was
capitalized for the years ended December 31, 1996 and 1997, respectively.
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, favorable
transmitter sites, goodwill, and various other intangibles, acquired in
connection with the Company's acquisitions of the various radio stations and
communications sites, are being amortized over their estimated useful lives,
ranging from one to forty

F-29
<PAGE> 104
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
years, using the straight-line method. FCC licenses and goodwill are generally
amortized over a fifteen to 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. Accumulated
amortization of the unallocated purchase price aggregated approximately $356,000
and $3,726,000 at December 31, 1996 and 1997, respectively.

The consolidated financial statements reflect the preliminary allocation of
certain purchase prices as the appraisals for certain acquisitions have not yet
been finalized. The Company is currently conducting studies to determine certain
purchase price allocations of Tower acquisitions and expects that upon final
allocation the average estimated useful life will approximate fifteen years. The
final allocation of purchase price is not expected to have a material effect on
the Company's results of operations, liquidity or financial position.

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,
------------------
1996 1997
------- -------
<S> <C> <C>
Net operating revenues...................................... $15,795 $22,271
Net operating expenses...................................... 10,663 15,742
</TABLE>

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 11, 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. In connection
with the OPM acquisition and the Gearon acquisition described in Note 11, the
Company entered into certain note agreements prior to consummation of these
acquisitions.

The Company agreed to advance OPM an amount not to exceed $37.0 million, of
which approximately $5.8 million (including accrued interest) was advanced as of
December 31, 1997. The note bore interest at prime rate plus 3%, was unsecured
and was an assumed liability upon closing of the OPM acquisition.

The Company also agreed to advance Gearon an amount not to exceed $10.0
million prior to closing, of which approximately $5.0 million was advanced as of
December 31, 1997. The note bore interest at 7.25% per annum, was unsecured and
was paid upon closing of the Gearon acquisition.

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

F-30
<PAGE> 105
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
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, $299,000 and $866,000 to the plan for the years ended December 31,
1995, 1996, and 1997, respectively.

Recent Accounting Pronouncements -- In June 1997, the FASB released 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 comprehensive income items and will require the Company to provide a
separate statement of comprehensive income; reported financial statements
amounts will be affected by this adoption. FAS 131 established standards for
reporting information about the operating segments in its annual report and
interim reports and will require the Company to adopt this standard in 1998.

In February 1998, the FASB released 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.

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,
$14,329,000 and $57,863,000 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 $2,800,000 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.

F-31
<PAGE> 106
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
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).

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 $310,300,000. 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..................................... $14,835 $ 27,330
Buildings and improvements................................ 21,842 60,982
Towers.................................................... 6,891 48,340
Broadcast equipment....................................... 37,256 95,376
Office equipment, furniture, fixtures and other
equipment.............................................. 8,635 23,613
Assets under capital lease obligations.................... 1,259 1,311
Construction in progress.................................. 8,903 13,072
------- --------
Total............................................. 99,621 270,024
Less accumulated depreciation and amortization............ (9,374) (19,835)
------- --------
Property and equipment--net............................... $90,247 $250,189
======= ========
</TABLE>

F-32
<PAGE> 107
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. PROPERTY AND EQUIPMENT -- (CONTINUED)
Accumulated amortization for the assets under capital leases aggregated
approximately $659,000 and $847,000 at December 31, 1996 and 1997, respectively.

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
Tower Credit Agreements..................................... 2,500 88,500
Senior Subordinated Notes................................... 173,665 327,691
Tower Note Payable -- Other................................. 1,558 1,467
Other Obligations........................................... 1,449 1,496
-------- --------
Total....................................................... 330,672 924,154
Less current maturities..................................... 561 450
-------- --------
Long-term debt.............................................. $330,111 $923,704
======== ========
</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

F-33
<PAGE> 108
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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

Tower Credit Agreements -- In October 1997, ATS entered into a new loan
agreement with a syndicate of banks (the "1997 Tower Credit Agreement"), which
replaced the previously existing credit agreement. American Tower Systems
(Delaware), Inc. ("ATSI") and American Tower Systems, L.P. ("ATSLP")
(collectively, the "Operating Subsidiaries"), are co-borrowers under the 1997
Tower Credit Agreement. All amounts outstanding under the previous agreement
were repaid with proceeds from the 1997 Tower Credit Agreement. The following
discussion, with the exception of the information regarding interest rates and
availability under the agreements, is based on the terms and conditions of the
1997 Tower Credit Agreement. Collectively, the previous credit agreement and the
1997 Tower Credit Agreement are referred to as the Tower Credit Agreements.

The 1997 Tower Credit Agreement provides ATS with a $250.0 million loan
commitment based on ATS maintaining certain operational ratios, and an
additional $150.0 million loan at the discretion of ATS. The 1997 Tower Credit
Agreement may be borrowed, repaid and reborrowed without reducing the
availability until June 2005, except as specified in the 1997 Tower Credit
Agreement; thereafter, availability decreases in an amount equal to 50% of
excess cash flow, as defined in the 1997 Tower Credit Agreement, for the fiscal
year immediately preceding the calculation date. In addition, the 1997 Tower
Credit Agreement requires commitment reductions in the event of sale of ATS's
common stock or debt instruments, and/or permitted asset sales, as defined in
the 1997 Tower Credit Agreement.

Outstanding amounts under the Tower Credit Agreements bear interest at
either LIBOR (5.72% as of December 31, 1997 and 5.78% as of December 31, 1996)
plus 1.0% to 2.25% or Base Rate, as defined in the Tower Credit Agreements, plus
0.00% to 1.00%. The spread over LIBOR and the Base Rate varies from time to
time, depending upon the Tower Subsidiary's financial leverage. Under certain
circumstances, the Tower Subsidiary may request that rates be fixed or capped.
For the years ended December 31, 1996 and 1997, the weighted average interest
rate of the Tower Credit Agreements was 8.75% and 7.54%, respectively.

There was $67.5 million and $32.7 million available under the Tower Credit
Agreements at December 31, 1996 and 1997, respectively. The Tower Subsidiary
pays quarterly commitment fees ranging from .375% to .50%, based on ATS's
financial leverage and the aggregate unused portion of the aggregated
commitment. Commitment fees paid related to the Tower Credit Agreements
aggregated approximately $24,000 and $416,000 for the years ended December 31,
1996 and 1997, respectively.

The 1997 Tower Credit Agreement contains certain financial and operational
covenants and other restrictions with which the Tower Subsidiary must comply,
whether or not any borrowings are outstanding, including among others,
maintenance of certain financial ratios, limitations on acquisitions, additional
indebtedness and capital expenditures, as well as restrictions on cash
distributions unless certain financial tests are met, and the use of borrowings.
The obligations of ATS under the 1997 Tower Credit Agreement are collateralized
by a first priority security interest in substantially all of the assets of
ATSI. The Tower Subsidiary has pledged all of its stock to the banks as security
for ATS's obligations under the 1997 Tower Credit Agreement. ATS is in the
process of negotiating an amended and restated loan agreement with its senior
lenders, pursuant to which the existing maximum borrowing of the Operating
Subsidiaries would be increased from $400.0 million to $900.0 million, subject
to compliance with certain financial ratios, and ATS would be able to borrow an
additional $150.0 million, subject to compliance with certain less restrictive
ratios. Borrowings under an amended loan agreement would also be available to
finance acquisitions. In connection
F-34
<PAGE> 109
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. LONG-TERM DEBT -- (CONTINUED)
with the refinancing, the Company expects to recognize an extraordinary loss of
approximately $1.4 million, net of a tax benefit of $0.9 million, during the
second quarter of 1998.

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 February 1, 2006. 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 guaranteed by the restricted
subsidiaries as described in Note 16. 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)
F-35
<PAGE> 110
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. LONG-TERM DEBT -- (CONTINUED)
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,
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, 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, 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, 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, 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. (See
Note 12.)

Under the terms of the 1997 Tower Credit Agreement, ATSI is required, under
certain conditions, to enter into interest rate protection agreements. There
were no such agreements outstanding at December 31, 1996. As of December 31,
1997, ATSI maintained a swap agreement, expiring in January 2001, under which
the interest rate is fixed with respect to $7.3 million of notional principal
amount at approximately 6.4%. ATSI also maintained two cap agreements; one
expiring in July 2000, under which the interest rate is fixed with respect to
$21.6 million of notional principal amount at approximately 9.5%, and one
expiring in November 1999, under which the interest rate is fixed with respect
to $7.0 million of notional principal amount at approximately 8.5%. ATSI'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.

Tower Note Payable -- Other -- A limited liability company, which is under
majority control of the Tower Subsidiary, has a note secured by the minority
shareholder's interest in the limited liability company. Interest rates under
this note are determined, at the option of the limited liability company, at
either the Floating Rate (as defined in the note agreement) or the Federal Home
Loan BankBoston rate plus 2.25%. As of December 31, 1996 and 1997, the effective
interest rate on borrowings under this note was 8.02%. The note is payable in
equal monthly principal payments with interest through 2006.

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%.

F-36
<PAGE> 111
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. LONG-TERM DEBT -- (CONTINUED)
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........................................................ $ 450
1999........................................................ 271
2000........................................................ 260
2001........................................................ 169
2002........................................................ 183
Thereafter through 2015..................................... 922,821
--------
TOTAL............................................. $924,154
========
</TABLE>

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.

Following the closing of the 1997 Tower Credit Agreement in October 1997,
the Tower Subsidiary incurred an extraordinary loss of approximately $1,156,000
(approximately $694,000 net of the applicable income tax benefit) 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. As of December 31, 1997, aggregate payments
related to these commitments during the next five years and thereafter 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.

F-37
<PAGE> 112
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. COMMITMENTS AND CONTINGENCIES -- (CONTINUED)
Future minimum rental payments required under non-cancelable operating
leases in effect at December 31, 1997 are approximately as follows (in
thousands):

<TABLE>
<S> <C>
YEAR ENDING DECEMBER 31:
- ------------------------------------------------------------
1998........................................................ $10,472
1999........................................................ 9,622
2000........................................................ 8,809
2001........................................................ 6,763
2002........................................................ 5,692
Thereafter through 2041..................................... 28,180
-------
TOTAL............................................. $69,538
=======
</TABLE>

Aggregate rent expense under operating leases for the years ended December
31, 1995, 1996 and 1997 approximated $1,769,000, $4,374,000 and $9,695,000,
respectively.

The Company and the Tower Subsidiary obtain a portion of their revenues
from leasing tower and transmitting facilities and sub-carrier rights to other
broadcasters and communications companies under various operating leases. The
Tower Subsidiary sub-leases rented space on communications towers to its
customers, under substantially the same terms and conditions, including
cancellation rights, as those found in its own lease contracts. Most leases
allow cancellation at will or under certain technical circumstances. The leases
expire over various terms and provide for renewal options and increases in lease
payments in the event such leases are renewed.

Future minimum lease revenues for non-cancelable operating leases in effect
at December 31, 1997 are approximately as follows (in thousands):

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

1998........................................................ $ 22,261
1999........................................................ 17,908
2000........................................................ 15,418
2001........................................................ 12,875
2002........................................................ 8,435
Thereafter through 2022..................................... 28,545
--------
TOTAL............................................. $105,442
========
</TABLE>

Total rental revenues under these leases approximated $448,000, $676,000
and $1,194,000 for the years ended December 31, 1995, 1996 and 1997,
respectively. Total rental revenues under the Company's sub-leases approximated
$468,000 and $978,000 for the years ended December 31, 1996 and 1997,
respectively.

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.

F-38
<PAGE> 113
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. COMMITMENTS AND CONTINGENCIES -- (CONTINUED)
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 expense 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 10 and 11 for information with respect
to station acquisition and Tower Subsidiary 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 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 $1,969,000 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.

See Notes 8 and 10 for other related-party transactions.

F-39
<PAGE> 114
AMERICAN RADIO SYSTEMS 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............................................... $1,851 $2,721 $3,030
State................................................. 612 799 738
DEFERRED:
Federal............................................... 4,023 905 (4,697)
State................................................. 343 157 (784)
Benefit from disposition of stock options (recorded to
additional paid-in capital)........................... 244 1,297
------ ------ ------
Income tax provision (benefit).......................... $6,829 $4,826 $ (416)
====== ====== ======
</TABLE>

A reconciliation between the U.S. statutory rate from continuing operations
and the effective rate 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......................... 6 6 (6)
Goodwill amortization....................................... 1 6 26
Amortization of intangibles................................. 1 5
Meals and entertainment..................................... 1 3 7
Valuation allowance......................................... (13)
Non-deductible merger costs................................. 10
Other -- net................................................ 1 (2)
-- --- ---
Effective tax rate.......................................... 43% 48% (5)%
== === ===
</TABLE>

F-40
<PAGE> 115
AMERICAN RADIO SYSTEMS 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 $ 4,076
Net operating loss carryforward........................... 75
Net operating loss carryback.............................. 2,277
-------- ---------
TOTAL CURRENT ASSETS.............................. $ 3,370 $ 6,428
======== =========
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..................................... (33,482) (199,613)
-------- ---------
Net long-term deferred tax liabilities.................... $(33,205) $(196,028)
======== =========
</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.

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

F-41
<PAGE> 116
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. REDEEMABLE STOCK -- (CONTINUED)
("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 $5,990,000
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 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.

F-42
<PAGE> 117
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 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
F-43
<PAGE> 118
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. STOCKHOLDERS' EQUITY -- (CONTINUED)
capital deficiency upon combination against additional paid-in capital in the
accompanying financial statements.

ATS Stock Purchase Agreement -- On January 22, 1998, the Tower Subsidiary
consummated the transactions contemplated by the stock purchase agreement (the
ATS Stock Purchase Agreement), dated as of January 8, 1998, with Steven B.
Dodge, Chairman of the Board, President and Chief Executive Officer of ARS and
ATS, and certain other officers and directors of ARS (or their affiliates or
family members or family trusts), pursuant to which those persons purchased 8.0
million shares of ATS Common Stock at a purchase price of $10.00 per share for
an aggregate purchase price of $80.0 million, including 4.0 million shares by
Mr. Dodge for $40.0 million. Payment of the purchase price was in the form of
cash aggregating approximately $30.6 million and in the form of notes
aggregating approximately $49.4 million due on the earlier of the consummation
of the Merger or, in the event the Merger Agreement is terminated, December 31,
2000. The notes bear interest at the six-month London Interbank Rate, from time
to time, plus 1.5% per annum, and are secured by shares of ARS Common Stock
having a fair market value of not less than 175% of the principal amount of and
accrued and unpaid interest on the note. The notes are prepayable at any time at
the option of the obligor and will be due and payable, at the option of the
Tower Subsidiary, in the event of certain defaults as described in the notes.

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.

F-44
<PAGE> 119
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. STOCKHOLDERS' EQUITY -- (CONTINUED)
The following table summarizes option activity:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
EXERCISE PRICES
OPTIONS PER SHARE
--------- ----------------
<S> <C> <C>
Outstanding as of January 1, 1994........................ 580,000 $ 6.38
Granted................................................ 322,000 $ 7.79
Cancelled.............................................. (8,000) $ 6.38
Exercised.............................................. (2,000) $ 6.38
--------- ------
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.

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.

F-45
<PAGE> 120
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. STOCKHOLDERS' EQUITY -- (CONTINUED)
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>

Tower Stock Option Plans -- In November 1997, Tower instituted the 1997
Stock Option Plan which provides for the granting of options to employees and
directors to acquire up to 10,000,000 shares of Tower Class A and Class B Common
Stock. The Plan is expected to be amended in connection with the ATC Merger,
described in Note 11, to limit future grants to Class A Common Stock. No options
were granted under this plan during 1997. In January 1998, Tower granted
2,820,300 options at an exercise price of $10 per share to employees and
directors and subsequently granted 1,200,000 options at an exercise price of $13
per share to employees of an acquired company. (See Note 10).

ATSI also has a stock option plan which provides for the granting of
options to employees to acquire up to 1,000,000 shares of the common stock of
ATSI. In addition, in connection with the Tower Separation approximately 800,000
options to purchase shares of ARS Common Stock held by current and future
employees of Tower may be exchanged for Tower options. The ARS options will be
exchanged in a manner that will preserve the spread in such ARS options between
the option exercise price and the fair market value of ARS Common Stock and the
ratio of the spread to the exercise price prior to such conversion.

Exercise prices in the case of incentive stock options are generally not
less than the fair value of the underlying 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. There have
been no ATSI option grants at exercise prices different from fair value.

The following table summarizes the ATSI option activity for the periods
presented:

<TABLE>
<CAPTION>
WEIGHTED-AVERAGE
EXERCISE PRICE NUMBER CURRENTLY REMAINING LIFE
OPTIONS PER SHARE EXERCISABLE (YEARS)
------- -------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Granted during 1996 and
outstanding at December
31, 1996................ 550,000 $5.00 160,000 8.71
Granted................... 172,000 $ 7.50-$8.00 9.24
Cancelled................. (40,000) $5.00
------- ------- ----
Outstanding as of December
31, 1997................ 682,000 160,000 8.89
======= ======= ====
</TABLE>

As described in Note 1, the intrinsic value method is used to determine
compensation associated with stock option grants. No compensation cost has been
recognized to date for grants under the Plan.

F-46
<PAGE> 121
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. STOCKHOLDERS' EQUITY -- (CONTINUED)
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>

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"). The Tower Subsidiary has reserved
sufficient shares under the Tower stock option plans.

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 actual and
effective closing date on the results of operations, liquidity and financial
position was not material.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)
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.

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. (See Note 11).

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)
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.

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. 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. (See Note 11).

San Jose: In February 1997, the Company acquired KBRG-FM (formerly KBAY-FM)
and KKSJ-AM for approximately $31.0 million. (See Note 11).

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)
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.

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
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)
$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 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. (See Note
11.)

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.
(See Note 11.)

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.

1997 TOWER ACQUISITIONS:

In December 1997, the Tower Subsidiary consummated the acquisition of a
tower site in northern California for approximately $2.0 million.

In October 1997, the Tower Subsidiary acquired two affiliated entities
operating approximately 110 tower sites and a tower site management business
located principally in northern California for approximately $45.0 million,
including assumed liabilities. In connection therewith, the Tower Subsidiary had
also agreed to loan approximately $1.4 million to the sellers on an unsecured
basis, of which approximately $0.26 million had been advanced and was repaid at
the closing.

In October 1997, the Tower Subsidiary acquired tower sites and certain
video, voice and data transport operations for approximately $70.25 million. The
acquired business owned or leased approximately 128 towers, principally in the
Mid-Atlantic region, with the remainder in California and Texas.

In September 1997, the Tower Subsidiary acquired nine tower sites in
Massachusetts and Rhode Island for approximately $7.2 million and land in
Oklahoma for approximately $0.6 million.

In August 1997, the Tower Subsidiary acquired six tower sites in
Connecticut and Rhode Island for approximately $1.5 million.

In July 1997, the Tower Subsidiary acquired the following:

(i) the assets of three affiliated entities which owned and operated
towers and a tower site management business in southern California
for an aggregate purchase price of approximately $33.5 million;
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AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)
(ii) the assets of one tower site in Washington, D.C. for
approximately $0.9 million;

(iii) the assets of six tower sites in Pennsylvania for approximately
$0.3 million; and

(iv) the rights to build five tower sites in Maryland for
approximately $0.5 million.

In May 1997, the Tower Subsidiary acquired 21 tower sites and a tower site
management business in Georgia, North Carolina and South Carolina for
approximately $5.4 million. The agreement also provides for additional payments
by the Tower Subsidiary if the seller is able to arrange for the purchase or
management of tower sites presently owned by an unaffiliated public utility in
South Carolina, which payments could aggregate up to approximately $1.2 million;
management believes that it is unlikely that any such arrangement will be
entered into.

In May 1997, the Tower Subsidiary acquired the assets of two affiliated
companies engaged in the business of acquiring and developing tower sites in
various locations in the United States for approximately $13.0 million.

In May 1997, the Tower Subsidiary and an unaffiliated party formed a
limited liability corporation to own and operate communication towers which will
be constructed on over 50 tower sites in northern California. The Tower
Subsidiary paid approximately $0.8 million to the unaffiliated party and
currently owns a 70% interest in the entity, with the remaining 30% owned by an
unaffiliated party. The Tower Subsidiary is obligated to provide additional
financing for the construction of these and any additional towers it may
approve; the obligation for such 50 tower sites is estimated to be approximately
$5.3 million. The accounts of the limited liability corporation are included in
the consolidated financial statements with the other party's investment
reflected as minority interest in subsidiary.

In May 1997, the Tower Subsidiary acquired three tower sites in
Massachusetts for approximately $0.26 million.

1996 TOWER ACQUISITIONS:

In February 1996, the Tower Subsidiary acquired Skyline Communications and
Skyline Antenna Management in exchange for an aggregate of 26,989 shares of ARS
Class A Common Stock, having a fair value of approximately $774,000, $2.2
million in cash, and the assumption of approximately $300,000 of long-term debt
which was paid at closing. Skyline Communication owned eight towers, six of
which are in West Virginia and the remaining two in northern Virginia. Skyline
Antenna Management managed more than 200 antenna sites, primarily in the
northeast region of the United States.

In April 1996, the Tower Subsidiary acquired BDS Communication, Inc. and
BRIDAN Communications Corporation for 257,495 shares of ARS Class A Common Stock
having a fair value of approximately $7.4 million and $1.9 million in cash of
which approximately $1.5 million was paid at closing. BDS Communications owned
three towers in Pennsylvania and BRIDAN Communications managed or had sublease
agreements on approximately forty tower sites located throughout the
Mid-Atlantic region.

In July 1996, the Tower Subsidiary entered into a limited liability company
agreement with an unaffiliated party relating to the ownership and operation of
a tower site in Needham, Massachusetts, whereby the Tower Subsidiary acquired a
50.1% interest in the company for approximately $3.8 million in cash. The
accounts of the limited liability company are included in the consolidated
financial statements with the other party's investment reflected as minority
interest in subsidiary.

In October 1996, the Tower Subsidiary acquired the assets of tower sites in
Hampton, Virginia and North Stonington, Connecticut for approximately $1.4
million and $1.0 million in cash, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)
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................................................ $348,647 $433,209
Loss before extraordinary items............................. (28,524) (26,000)
Net loss.................................................... (28,524) (28,333)
Net loss applicable to common stockholders.................. (33,497) (59,497)
Basic loss per common share................................. $ (1.16) $ (2.01)
</TABLE>

Pending station acquisitions are discussed in Notes 10 and 11.

10. OTHER 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.

Tower Subsidiary: In January 1998, the Tower Subsidiary consummated an
agreement to acquire all of the outstanding stock of Gearon & Co. Inc.
("Gearon"), a company based in Atlanta, Georgia, for an aggregate purchase price
of approximately $80.0 million consisting of approximately $32.0 million in cash
and assumed liabilities and the issuance of approximately 5.3 million shares of
Tower Subsidiary Class A Common Stock valued at $9.00 per share. Gearon is
engaged in site acquisition, development, construction and facility management
of wireless network communication facilities on behalf of its customers and at
the time of acquisition owned or had under construction approximately 40 tower
sites. Following consummation, the Tower Subsidiary granted options to acquire
up to 1,200,000 shares of Class A Common Stock at an exercise price of $13.00
per share to employees of Gearon.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. OTHER TRANSACTIONS -- (CONTINUED)
In January 1998, the Tower Subsidiary consummated the acquisition of
OPM-USA-INC. ("OPM"), a company which owned approximately 90 towers at the time
of acquisition. OPM is in the process of developing an additional 160 towers
that are expected to be constructed during the next 12 to 18 months. The
purchase price, which is variable and based on the number of towers completed
and the forward cash flow of the completed OPM towers, could aggregate up to
$105.0 million, of which approximately $21.3 million was paid at the closing.
The Tower Subsidiary had also agreed to provide the financing to OPM to enable
it to construct the 160 towers in an aggregate amount not to exceed $37.0
million (less advances as of consummation aggregating approximately $5.8
million).

In January 1998, the Tower Subsidiary consummated the acquisition of a
communications site with six towers in Tucson, Arizona for approximately $12.0
million.

In January 1998, the Tower Subsidiary consummated the acquisition of a
tower near Palm Springs, California for approximately $0.75 million.

In January 1998, the Company transferred to the Tower Subsidiary 14
communications sites currently used by the Company and various third parties
(with an ARS net book value of approximately $4.2 million), and the Company and
the Tower Subsidiary entered into leases or subleases of space on the
transferred towers. Two additional communications sites will be transferred and
leases entered into following acquisition by the Company of the sites from third
parties.

In February 1998, the Tower Subsidiary acquired 11 communications tower
sites in northern California for approximately $11.8 million.

Tower Separation: The Tower Separation will result in a taxable gain to
ARS, of which $20.0 million will be borne by ARS and the remaining obligation
(currently estimated at approximately $113.0 to 153.0 million) will be required
to be paid by ATS pursuant to provisions of the Merger Agreement. This liability
is expected to be paid with borrowings under ATS' loan agreement or proceeds
from equity financings and the timing of such payment is dependent upon the
timing of the consummation of the Merger Agreement. The estimated Merger Tax
Liability shown in the preceding sentence is based on an assumed fair market
value of the ATS Common Stock of approximately $16.00 per share. Such estimated
Merger Tax Liability would increase or decrease by approximately $14.8 million
for each $1.00 per share increase or decrease in the fair market value of the
ATS Common Stock.

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 Merger which may result in payments to be made by either
ARS or ATS to the other party following the closing date of the Merger. ATS will
benefit from or bear the cost of such adjustments. Since the amounts of working
capital and debt are dependent upon future operations and events, including
without limitation cash flow from operations, capital expenditures, and expenses
of the Merger and the Tower Separation, neither ARS nor ATS is able to state
with any degree of certainty what payments, if any, will be owed following the
closing date by either ARS or ATS to the other party.

11. PENDING TRANSACTIONS

Portsmouth: In March 1998, the Company entered into an agreement to sell
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.
Subject to the receipt of FCC approval, the transaction is expected to be
consummated in the second quarter of 1998.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. PENDING TRANSACTIONS -- (CONTINUED)
Portland, Sacramento, San Francisco and San Jose: In April 1997, the
Company entered into 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 to ARS 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 agreement also provides for the exchange of KINK-FM for KBRG-FM in the event
regulatory approval for the exchange of KUFX-FM and KRRE-FM cannot be obtained.
The Justice Department approved the exchange of KRRE-FM for KUFX-FM. The
transaction is expected to be consummated in the second quarter of 1998. The
Company began programming and marketing KINK-FM and KUFX-FM pursuant to an LMA
agreement in January 1998. At the same time the purchaser of KBRG-FM began
programming and marketing KBRG-FM pursuant to an LMA. (See Note 9.)

Sacramento: In March 1998, the Company expects to enter into an asset
exchange agreement pursuant to which, subject to the receipt of FCC approval,
the Company's KRAK-FM would exchange FCC frequencies with another radio station
also located in the Sacramento market for approximately $4.4 million.

San Jose and Monterey: In March 1997, the Company entered into a merger
agreement pursuant to which the Company will acquire 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. In June 1997, the Company
and the seller each received a Civil Investigative Demand from the Antitrust
Division of the Department of Justice requesting certain documentary materials
regarding the merger and the purchase, sale, or trade or other transfer of radio
stations in San Jose, California. Subject to the receipt of FCC approval and
resolution of the matters raised by the Antitrust Division described above, the
acquisition is expected to be consummated in the second quarter of 1998. (See
Note 9.)

San Jose: In October 1997, the Company entered into an agreement to sell
KSJO-FM for approximately $30.0 million. Subject to the receipt of FCC approval,
the transaction is expected to be consummated in the first half of 1998.

St. Louis: In September 1997, the Company entered into an agreement to sell
the assets of KFNS-AM serving the St. Louis, Missouri market for approximately
$3.8 million. Subject to the receipt of FCC approval, the transaction is
expected to be consummated in the first half of 1998.

Temple: In May 1997, the Company entered into an agreement to acquire radio
station KKIK-FM, licensed to Temple, Texas (in the Austin area) for
approximately $3.7 million. Subject to the approval of the FCC, the transaction
is expected to be consummated in the second quarter of 1998.

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 October 1997, the Company entered into an agreement to sell WEAT-AM
serving West Palm Beach, Florida for approximately $1.5 million. Subject to the
receipt of FCC approval, the transaction is expected to be consummated in the
first quarter of 1998.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. PENDING TRANSACTIONS -- (CONTINUED)
the business of acquiring, developing, and leasing wireless communications sites
to companies using or providing cellular telephone, paging, microwave and
specialized mobile radio services and is located in 31 states primarily in the
western, eastern and southern United States. Consummation of the transaction is
subject to, among other things, the expiration or earlier termination of the HSR
Act waiting period, and is expected to occur in the spring of 1998.

In January 1998, the Tower Subsidiary entered into an agreement to purchase
the assets relating to a teleport business serving the Washington, D.C. area for
a purchase price of approximately $30.5 million, subject to receipt of FCC
approval. The facility is located in northern Virginia, inside of the Washington
Beltway, on ten acres.

In February 1998, the Tower Subsidiary entered into an agreement to acquire
a tower in Sacramento, California for approximately $1.2 million.

The Company is also pursuing the acquisitions of radio and tower properties
and tower businesses in new and existing locations, although there are no
definitive purchase agreements with respect thereto.

12. 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 $39,312,000 at
December 31, 1996 and 1997, respectively, and approximate 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 $2.7 million as
of December 31, 1996 and 1997, respectively. (See Note 3.)
F-56
<PAGE> 131
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. 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..................................... $54,237 $100,108 $106,167 $113,606
Operating income................................. 2,220 18,556 15,929 18,328
Net income (loss) before extraordinary item...... (2,725) 2,421 (324) (7,021)
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..................................... $23,315 $ 37,777 $ 52,490 $ 64,437
Operating income................................. 1,793 6,757 7,403 11,078
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.)

14. 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.

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

F-57
<PAGE> 132
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSIDIARY GUARANTEES -- (CONTINUED)
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-58
<PAGE> 133
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 1997

F-59
<PAGE> 134
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED 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 $ 110 $ 450
Accounts payable and
accrued expenses..... 11,729 $ 25,403 10,896 48,028
------------- ------------ -------- ------------ ----------
Total current
liabilities... 12,069 25,403 11,006 48,478
------------- ------------ -------- ------------ ----------
NONCURRENT LIABILITIES:
Deferred income taxes... 9,740 185,870 418 196,028
Other long-term
liabilities.......... 8,875 46 33 8,954
Long-term debt.......... 833,638 90,066 923,704
------------- ------------ -------- ------------ ----------
Total noncurrent
liabilities... 852,253 185,916 90,517 1,128,686
------------- ------------ -------- ------------ ----------
MINORITY INTEREST IN
SUBSIDIARIES............ 626 626
------------- ------------ -------- ------------ ----------
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 $255,356 $ (1,164,380) $2,054,205
============= ============ ======== ============ ==========
</TABLE>

F-60
<PAGE> 135
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED 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 broadcast revenues........ $231,438 $125,582 $ (22) $356,998
Tower revenues................ $17,508 (388) 17,120
License fees charged to
Parent...................... (17,320) 17,320 0
-------- -------- ------- ------- --------
TOTAL NET
REVENUES.......... 214,118 142,902 17,508 (410) 374,118
OPERATING EXPENSES:
Operating expenses excluding
depreciation and
amortization, net local
marketing agreement and
corporate general and
administrative
expenses................. 156,524 75,473 8,713 1,126 241,836
Net local marketing
agreement expense........ 1,590 724 2,314
Depreciation and
amortization............. 17,924 40,493 6,326 64,743
Merger expenses............. 1,985 1,985
Corporate general and
administrative........... 8,207 1,536 (1,536) 8,207
-------- -------- ------- ------- --------
OPERATING INCOME (LOSS)....... 27,888 26,212 933 55,033
OTHER INCOME (EXPENSE):
Interest expense............ (56,710) (3,039) (59,749)
Interest income and other,
net...................... 2,114 250 2,364
Gains (losses) on sale of
assets and other, net.... (5,519) (1) (193) (5,713)
Equity in income (loss) of
subsidiaries............. 5,526 (5,526) 0
-------- -------- ------- ------- --------
INCOME (LOSS) BEFORE INCOME
TAXES....................... (26,701) 26,211 (2,049) (5,526) (8,065)
INCOME TAX PROVISION
(BENEFIT)................... (18,358) 18,415 (473) (416)
-------- -------- ------- ------- --------
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM.......... (8,343) 7,796 (1,576) (5,526) (7,649)
EXTRAORDINARY LOSS ON
EXTINGUISHMENT OF
DEBT -- NET OF TAX
BENEFIT..................... (1,639) (694) (2,333)
-------- -------- ------- ------- --------
NET INCOME (LOSS)............. $ (9,982) $ 7,796 $(2,270) $(5,526) $ (9,982)
======== ======== ======= ======= ========
</TABLE>

F-61
<PAGE> 136
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED 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 ELIMINATIONS TOTALS
------------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
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) (23,066) (45,730)
Proceeds from asset and radio
station sales............... 86,551 86,551
Repayment of investment note
receivables................. 1,243 1,243
Payments for purchase of tower
properties.................. (181,333) (181,333)
Payments for purchase of radio
stations.................... (500,824) (500,824)
Payments for investment notes
receivable and related
intangible assets........... (410) (10,961) (11,371)
Deposits and other long-term
assets...................... 7,537 (1,146) 6,391
-------- ------- --------- ---- ---------
Cash flows used for
investing activities... (428,567) (216,506) (645,073)
-------- ------- --------- ---- ---------
FINANCING ACTIVITIES:
Borrowings under the Credit
Agreements.................. 639,500 151,000 790,500
Repayments under the Credit
Agreements.................. (286,000) (65,000) (351,000)
Borrowing under other
obligations................. 750 750
Repayments under other
obligations................. (868) (359) (1,227)
Additions to deferred financing
costs....................... (5,642) (2,553) (8,195)
Dividends paid................. (15,613) (15,613)
Net proceeds from equity
offerings and options....... 193,165 193,165
Distributions to minority
interest.................... (419) (419)
Investment in and advances to
subsidiaries................ (81,072) (45,352) 126,424
-------- ------- --------- ---- ---------
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
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR.............. 8,074 2,373 10,447
-------- ------- --------- ---- ---------
CASH AND CASH EQUIVALENTS, END OF
YEAR........................... $ 10,470 $ 1,578 $ 4,595 $ 0 $ 16,643
======== ======= ========= ==== =========
</TABLE>

F-62
<PAGE> 137
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 1996

F-63
<PAGE> 138
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED 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 $ 117 $ 561
Accounts payable and
accrued expenses........ 31,087 $ 656 2,027 33,770
-------- -------- ------- --------- --------
Total current
liabilities...... 31,531 656 2,144 34,331
-------- -------- ------- --------- --------
NONCURRENT LIABILITIES:
Deferred income taxes...... 11,405 21,521 279 33,205
Other long-term
liabilities............. 2,129 20 2,149
Long-term debt............. 325,693 4,418 330,111
-------- -------- ------- --------- --------
Total noncurrent
liabilities...... 339,227 21,521 4,717 365,465
-------- -------- ------- --------- --------
MINORITY INTEREST IN
SUBSIDIARIES............... (185) 529 344
-------- -------- ------- --------- --------
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 $37,117 $(314,983) $796,303
======== ======== ======= ========= ========
</TABLE>

F-64
<PAGE> 139
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED 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 broadcast revenues....... $170,322 $4,252 $174,574
Tower revenues............... 618 $2,897 $ (70) 3,445
License fees charged to
Parent..................... (7,655) 7,655 0
-------- ------ ------ ----- --------
TOTAL NET REVENUES........... 163,285 11,907 2,897 (70) 178,019
OPERATING EXPENSES:
Operating expenses
excluding depreciation
and amortization, net
local marketing
agreement and corporate
general and
administrative
expenses................ 115,219 2,662 1,363 760 120,004
Net local marketing
agreement expense....... 10,461 (2,333) 8,128
Depreciation and
amortization............ 9,873 6,947 990 17,810
Corporate general and
administrative.......... 5,046 830 (830) 5,046
-------- ------ ------ ----- --------
OPERATING INCOME (LOSS)...... 22,686 4,631 (286) 27,031
OTHER INCOME (EXPENSE):
Interest expense........... (22,287) (22,287)
Interest income and other,
net..................... 5,489 36 5,525
Gains (losses) on sale of
assets and other, net... (123) (185) (308)
Equity in income (loss) of
subsidiaries............ 127 (127) 0
-------- ------ ------ ----- --------
INCOME (LOSS) BEFORE INCOME
TAXES...................... 5,892 4,631 (435) (127) 9,961
INCOME TAX PROVISION......... 757 4,024 45 4,826
-------- ------ ------ ----- --------
NET INCOME (LOSS)............ $ 5,135 $ 607 $ (480) $(127) $ 5,135
======== ====== ====== ===== ========
</TABLE>

F-65
<PAGE> 140
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED 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 ELIMINATIONS TOTALS
------------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
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) (9,327) (25,109)
Proceeds from asset and radio
station sales............... 1,087 1,087
Repayment of investment notes
receivable.................. 1,350 1,350
Payments for purchase of tower
properties.................. (9,797) (9,797)
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)
--------- ------ -------- ----- ---------
Cash flows used for
investing
activities........... (402,761) (19,124) (421,885)
--------- ------ -------- ----- ---------
FINANCING ACTIVITIES:
Borrowings under the Credit
Agreements.................. 151,500 2,500 154,000
Repayments under the Credit
Agreements.................. (151,500) (151,500)
Repayments under other
obligations................. (403) (51) (454)
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................ (11,515) (5,292) 16,807 0
--------- ------ -------- ----- ---------
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
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR.............. 3,877 12 3,889
--------- ------ -------- ----- ---------
CASH AND CASH EQUIVALENTS, END OF
YEAR........................... $ 8,074 $ 0 $ 2,373 $ 0 $ 10,447
========= ====== ======== ===== =========
</TABLE>

F-66
<PAGE> 141
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED 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 broadcast revenues....... $97,609 $97,609
Tower revenues............... $ 163 163
License fees charged to
Parent..................... (484) $484 0
------- ---- ----- ----- -------
TOTAL NET REVENUES........... 97,125 484 163 97,772
OPERATING EXPENSES:
Operating expenses
excluding depreciation
and amortization, net
local marketing
agreement and corporate
general and
administrative
expenses................ 66,148 10 60 $ 230 66,448
Net local marketing
agreement expense....... 600 600
Depreciation and
amortization............ 11,833 474 57 12,364
Corporate general and
administrative.......... 3,908 230 (230) 3,908
------- ---- ----- ----- -------
OPERATING INCOME (LOSS)...... 14,636 0 (184) 14,452
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
Equity in (loss) of
subsidiaries............ (110) 110 0
------- ---- ----- ----- -------
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM AND
INCOME TAXES............... 16,008 (184) 110 15,934
INCOME TAX (PROVISION)
BENEFIT.................... (6,903) 74 (6,829)
------- ---- ----- ----- -------
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM......... 9,105 (110) 110 9,105
EXTRAORDINARY LOSS ON
EXTINGUISHMENT OF DEBT..... (817) (817)
------- ---- ----- ----- -------
NET INCOME (LOSS)............ $ 8,288 $ 0 $(110) $ 110 $ 8,288
======= ==== ===== ===== =======
</TABLE>

F-67
<PAGE> 142
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. SUBSIDIARY GUARANTEES -- (CONTINUED)
UNAUDITED 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 ELIMINATIONS TOTALS
------------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
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
tower properties........ (3,218) (4,082) (7,300)
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)
--------- ---- ------- ---- ---------
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
Investment in and advances
to subsidiaries......... (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
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR.......... 3,168 3,168
--------- ---- ------- ---- ---------
CASH AND CASH EQUIVALENTS,
END OF YEAR................ $ 3,877 $ 0 $ 12 $ 0 $ 3,889
========= ==== ======= ==== =========
</TABLE>

F-68
<PAGE> 143
AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. EVENTS SUBSEQUENT TO DATE OF INDEPENDENT AUDITORS' REPORT (UNAUDITED)

For events occurring subsequent to March 27, 1998, see the Company's
unaudited condensed consolidated financial statements as of March 31, 1998 and
the three months ended March 31, 1998 and 1997 appearing elsewhere in this
Registration Statement.

F-69
<PAGE> 144

AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, 1997 MARCH 31, 1998
----------------- --------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 16,643 $ 12,997
Accounts receivable (less allowance for doubtful accounts
of $7,703 in 1997 and $7,846 in 1998).................. 90,468 78,953
Unbilled receivables...................................... 3,028
Prepaid expenses and other assets......................... 5,153 8,966
Current portion of investment notes receivable (less
valuation allowance of $6,750 in 1997 and 1998)........ 2,250 2,250
Deferred income taxes..................................... 6,428 6,428
---------- ----------
Total current assets.............................. 120,942 112,622
---------- ----------
PROPERTY AND EQUIPMENT -- NET............................... 250,189 278,319
---------- ----------
OTHER ASSETS:
Restricted cash........................................... 22,141
Investment notes receivable............................... 36,812 27,108
Intangible Assets, net
Goodwill............................................... 353,897 351,634
FCC licenses........................................... 1,112,273 1,171,196
Other intangible assets................................ 38,884 36,234
Unallocated purchase price, net........................ 108,192 221,532
Deposits and other long-term assets....................... 10,875 8,942
Deferred income taxes..................................... 123,273
---------- ----------
Total other assets................................ 1,683,074 1,939,919
---------- ----------
TOTAL....................................................... $2,054,205 $2,330,860
========== ==========
</TABLE>

See notes to Unaudited Condensed Consolidated Financial Statements
F-70
<PAGE> 145

AMERICAN RADIO SYSTEMS CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, 1997 MARCH 31, 1998
----------------- --------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturities of long-term debt...................... $ 450 $ 394
Accounts payable.......................................... 9,687 7,339
Accrued compensation...................................... 3,456 3,667
Accrued expenses.......................................... 18,956 27,056
Unearned income........................................... 1,752 2,557
Accrued interest.......................................... 14,177 11,416
Income taxes payable...................................... -- 125,774
---------- ----------
Total current liabilities......................... 48,478 178,203
---------- ----------
DEFERRED INCOME TAXES....................................... 196,028 186,237
---------- ----------
OTHER LONG-TERM LIABILITIES................................. 8,954 8,579
---------- ----------
LONG-TERM DEBT.............................................. 923,704 1,020,398
---------- ----------
MINORITY INTEREST IN SUBSIDIARIES........................... 626 78,208
---------- ----------
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....................................................... $2,054,205 $2,330,860
========== ==========
</TABLE>

See notes to Unaudited Condensed Consolidated Financial Statements
F-71
<PAGE> 146

AMERICAN RADIO SYSTEMS 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................................................ $ 54,237 $106,180
-------- --------
OPERATING EXPENSES:
Operating expenses excluding depreciation and
amortization, net local marketing agreement and
corporate general and administrative expenses.......... 40,884 77,049
Net local marketing agreement expenses.................... 1,932 709
Depreciation and amortization............................. 7,424 23,820
Merger expenses........................................... 3,572
Corporate general and administrative...................... 1,777 1,905
-------- --------
Total expenses.................................... 52,017 107,055
-------- --------
OPERATING INCOME (LOSS)..................................... 2,220 (875)
-------- --------
OTHER INCOME (EXPENSE):
Interest expense.......................................... (7,504) (19,013)
Interest income........................................... 656 1,195
Gains (losses) on sale of assets and other, net........... 218 261
-------- --------
Total other (expense)............................. (6,630) (17,557)
-------- --------
LOSS FROM OPERATIONS BEFORE EXTRAORDINARY LOSS AND INCOME
TAXES..................................................... (4,410) (18,432)
INCOME TAX BENEFIT.......................................... 1,685 9,402
-------- --------
LOSS BEFORE EXTRAORDINARY LOSS.............................. (2,725) (9,030)
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:
Loss before extraordinary loss............................ $ (.42) $ (.59)
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-72
<PAGE> 147

AMERICAN RADIO SYSTEMS CORPORATION

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............. $ (1,587) $ 10,951
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property, equipment and
intangible assets...................................... (7,853) (15,684)
Proceeds from radio station sales......................... 20,403 3,952
Payments for radio station acquisitions................... (262,863) (42,153)
Payments for tower related acquisitions................... (71,069)
Issuance of investment notes receivable................... (624) (6,000)
Repayment of investment note receivable................... 1,243 2,004
Deposits and other long-term assets....................... 16,417 (4,155)
--------- ---------
Cash used for investing activities................ (233,277) (133,105)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under Credit Agreements and other.............. 276,500 97,000
Repayments under Credit Agreements........................ (230,000)
Repayments of other obligations........................... (274) (235)
Net proceeds from equity offerings and options............ 160 30,242
Net proceeds from exchangeable preferred stock offering... 192,350
Additions to deferred financing costs..................... (5,526)
Distributions to minority interest........................ (105) (105)
Dividends paid............................................ (2,406) (8,394)
--------- ---------
Cash provided by financing activities............. 230,699 118,508
--------- ---------
DECREASE IN CASH AND CASH EQUIVALENTS....................... (4,165) (3,646)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.............. 10,447 16,643
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD.................... $ 6,282 $ 12,997
========= =========
</TABLE>

See notes to Unaudited Condensed Consolidated Financial Statements.
F-73
<PAGE> 148

AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The financial statements included herein have been prepared by American
Radio Systems Corporation ("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.

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
comparative purposes is required. The Company has adopted this statement in the
first quarter of 1998. Comprehensive income does not differ from net income.

Reclassifications -- Certain reclassifications have been made to the 1997
financial statements to conform to the 1998 presentation.

2. BUSINESS AND CORPORATE STRUCTURE

Tower Subsidiaries: American Tower Systems Corporation ("ATS", "Tower" or
"Tower Subsidiary") is a majority owned subsidiary of ARS. American Tower
Systems (Delaware), Inc. ("ATSI") is a wholly-owned subsidiary of ATS and one of
the two operating subsidiaries of ATS. American Tower Systems, L.P. ("ATSLP"),
is an indirect wholly-owned subsidiary of ATS, which conducts all of the
business of ATS other than that conducted by ATSI. ATSI and ATSLP are
collectively referred to as the "Operating Subsidiaries".

CBS Merger: In September 1997, American Radio entered into a merger
agreement as amended and restated in December 1997, as amended ("the CBS Merger
Agreement") pursuant to which a subsidiary of CBS will be merged (the "CBS
Merger") into American Radio. As a consequence of the consummation of the CBS
Merger, all of the shares of ATS owned by ARS will be distributed to ARS common
stockholders and holders of options to acquire ARS Common Stock or upon
conversion of shares of ARS 7% Convertible Exchangeable Preferred Stock (the
"Convertible Preferred Stock"). As a consequence of the CBS Merger, ATS will
cease to be a subsidiary of, or to be otherwise affiliated with, American Radio
and will operate as an independent publicly traded company. Pursuant to the
provisions of the CBS Merger Agreement, ATS will enter into an agreement (the
"ARS-ATS Separation Agreement") with CBS and ARS providing for, among other
things, the orderly separation of ARS and ATS, the allocation of certain tax
liabilities to ATS, certain closing date adjustments relating to ARS, the lease
to ARS by ATS of space on certain towers previously owned by ARS and transferred
to ATS, and certain indemnification obligations (including matters with respect
to securities law) of ATS.

ATS's principal obligation is to reimburse CBS on a "make-whole" (after
tax) basis for the tax liabilities to be incurred by ARS in excess of $20.0
million attributable to the distribution of the Common Stock to the

F-74
<PAGE> 149
AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. BUSINESS AND CORPORATE STRUCTURE -- (CONTINUED)
ARS security holders and certain related transactions. In light of the
significant increase in the trading levels of the ATS Class A Common Stock, ATS
and CBS have agreed that ARS will treat the distribution on its tax return on a
more conservative basis than originally contemplated in order to avoid the
possibility of significant interest and penalties for which ATS would be
responsible.

Assuming the "fair market value" of ARS's stock interest in ATS was equal
to $23.00 per share, the last reported sale price of such stock in the
"when-issued" market on April 30, 1998, the total estimated tax reimbursement
ATS would be required to make would be between approximately $315.0 and $345.0
million, depending on applicable state tax rates. Such estimate gives effect to
deductions of approximately $93.0 million, based on such closing price,
available to ARS as a consequence of stock option cancellations contemplated by
the CBS Merger. The tax reimbursement would change by between approximately
$20.5 and $22.5 million, again depending on applicable state tax rates, for each
$1.00 change in the "fair market value" of the ATS Common Stock under the tax
reporting position to be followed. The estimates described above are based on a
number of assumptions and interpretations of various applicable income tax rules
and are subject to change.

ARS has agreed that it will pursue, for the benefit and at the cost of ATS,
a refund claim, attributable to the "make-whole" provision, estimated at
approximately $90.0 million, based on the assumed "fair market value" set forth
above. Any such refund claim will, in fact, be based on the actual amount of tax
paid. In light of existing tax law, there can, of course, be no assurance that
any such refund claim will be successful.

ARS and CBS have agreed that in computing the amount of taxable gain that
is recognized by ARS in connection with the distribution of the ATS Common
Stock, ARS shall, subject to certain limitations, if so requested by ATS, report
the amount so realized based on the "fair market value" of such stock as
determined based on an appraisal prepared by a mutually agreed upon appraiser.
Any such appraisal is not, of course, binding on the Internal Revenue Service or
other taxing authorities.

In connection with an inter-corporate taxable transfer of assets entered
into in January 1998 by ATS in contemplation of the separation of ATS and ARS, a
portion of the tax with respect to which ATS is obligated to indemnify CBS was
incurred. Such transfer resulted in an increase in the tax bases of ATS's assets
of approximately $330.0 million. ATS will have potential depreciation and
amortization deductions over the next 15 years of $22.0 million per year and
recorded a deferred tax asset and corresponding income tax liability of
approximately $125.0 million to reflect these transactions.

The ARS-ATS Separation Agreement will provide closing date balance sheet
adjustments based upon the working capital (current assets less defined
liabilities) and specified debt levels of ARS. ATS will benefit from or bear the
cost of such adjustments. ATS's preliminary estimate of such adjustments is that
it will not be required to make a payment of more than $20.0 million and that,
in addition, it will be required to reimburse CBS for the tax consequences of
any such payment which would result in additional liability to ATS of
approximately $13.0 million (assuming a $20.0 million adjustment) payment under
the tax reporting method to be followed and as to which a refund claim will be
filed. Since the amounts of working capital and debt are dependent upon the
uncertainty, among other things, of recent operating results and cash capital
expenditures, as well as CBS Merger expenses and the interpretation and intent
of certain provisions of the CBS Merger Agreement as to which certain issues
between ATS and CBS exist, ATS is unable to state definitively what payments, if
any, will be owed by ATS or CBS.

ATS is actively negotiating a commitment from a major investment banking
firm with respect to a preferred stock financing (the "Interim Financing") which
provides for the issuance and sale by ATS of up to $400.0 million of preferred
stock (the "Interim Preferred Stock"). ATS plans to draw on such commitment and
sell Interim Preferred Stock to finance its obligation to CBS with respect to
tax reimbursement, unless a

F-75
<PAGE> 150
AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. BUSINESS AND CORPORATE STRUCTURE -- (CONTINUED)
public offering is consummated prior to the time the tax reimbursement is due to
CBS. Consummation of the Interim Financing is subject to the negotiation and
execution of a definitive preferred stock purchase agreement (the "Interim
Financing Agreement") and satisfaction of the closing conditions to be set forth
therein. ATS intends to redeem the Interim Preferred stock, to the extent
issued, out of the proceeds of a public offering of ATS Class A Common Stock to
be registered under the Securities Act of 1933, as amended (Securities Act), if,
as is likely, the tax reimbursement is due prior to the consummation of such
public offering or, if not, to use such public offering proceeds directly to
reimburse CBS for such tax liability. Any remaining proceeds are intended to be
used to fund any closing date balance sheet adjustments (or repay bank
borrowings incurred for such purpose). Any public offering would have a dilutive
effect on ATS's then existing stockholders, particularly since the proceeds will
be used to satisfy a liability and not to finance the acquisition of revenue
producing property. Further, any public offering would be subject to market
conditions and other factors. There can be no assurance that any such financing
would be available on terms favorable to ATS.

The CBS Merger has been approved by stockholders of ARS who held sufficient
voting power to approve such action. Consummation of the CBS Merger is subject
to, among other things, the approval by the Federal Communications Commission
("FCC") of the transfer of control of ARS's FCC licenses with respect to its
radio stations to CBS. Subject to the satisfaction of such conditions, the CBS
Merger is expected to be consummated in the Spring of 1998.

The foregoing is a description of the rights and obligations of ARS and ATS
in the event the CBS Merger is consummated. Although the ARS-ATS Separation
Agreement will be effective and operational if the merger of a subsidiary of ARS
into ARS (the "Tower Merger") is consummated, in the event the CBS Merger is not
subsequently consummated, ARS and ATS have reserved the right to alter the terms
of that agreement to provide for a sharing of the rights and obligations in a
manner that may be more or less favorable to ATS. Because ARS and ATS believe
that the CBS Merger will be consummated, no determination has been made of what
the rights and obligations of ARS and ATS should be in the event it were not.

3. 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.

4. 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

F-76
<PAGE> 151
AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. INCOME TAXES -- (CONTINUED)
tax benefit (provision) are recorded in the interim period in which a change in
the estimated annual effective rate is determined.

5. 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>

6. ATS LOAN AGREEMENT

ATS is in the process of negotiating amended and restated loan agreements,
with its senior lenders, pursuant to which the Company expects that the existing
maximum borrowing will be increased from $400.0 million to $900.0 million,
subject to compliance with certain financial ratios, and ATS will be able to
borrow an additional $150.0 million. In connection with the refinancing, ATS
expects to recognize an extraordinary loss of approximately $1.4 million, net of
a tax benefit of $0.9 million, during the second quarter of 1998.

7. 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-77
<PAGE> 152
AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)
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.

Tower Subsidiary: In January 1998, the Tower Subsidiary consummated an
agreement to acquire all of the outstanding stock of Gearon & Co. Inc.
("Gearon"), a company based in Atlanta, Georgia, for an aggregate purchase price
of approximately $80.0 million. The purchase price consisted of approximately
$32.0 million in cash and assumed liabilities and the issuance of approximately
5.3 million shares of Tower Subsidiary Class A Common Stock valued at $9.00 per
share. Gearon is engaged in site acquisition, development, construction and
facility management of wireless network communication facilities on behalf of
its customers and at the time of acquisition owned or had under construction
approximately 40 tower sites. Following consummation, the Tower Subsidiary
granted options to acquire up to 1,400,000 shares of Class A Common Stock at an
exercise price of $13.00 per share to employees of Gearon.

In January 1998, the Tower Subsidiary consummated the acquisition of
OPM-USA-INC. ("OPM"), a company which owned approximately 90 towers at the time
of acquisition. In addition, OPM is in the process of developing an additional
160 towers that are expected to be constructed during the next 12 to 18 months.
The purchase price, which is variable and based on the number of towers
completed and the forward cash flow of the completed OPM towers, could aggregate
up to $105.0 million, of which approximately $21.3 million was paid at the
closing. The Company had also agreed to provide the financing to OPM to enable
it to construct the 160 towers in an aggregate amount not to exceed $37.0
million (less advances as of consummation aggregating approximately $5.8
million).

In January 1998, the Tower Subsidiary consummated the acquisition of a
communications site with six towers in Tucson, Arizona for approximately $12.3
million.

In January 1998, the Tower Subsidiary consummated the acquisition of a
tower near Palm Springs, California for approximately $0.75 million.

In January 1998, the Company transferred to the Tower Subsidiary 14
communications sites currently used by the Company and various third parties
(with an ARS net book value of approximately $4.7 million), and the Company and
the Tower Subsidiary entered into leases or subleases of space on the
transferred towers. Two additional communications sites will be transferred and
leases entered into following acquisition by the Company of the sites from third
parties.

In February 1998, the Tower Subsidiary acquired 11 communications tower
sites in northern California for approximately $11.8 million.

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.

F-78
<PAGE> 153
AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. ACQUISITIONS AND DISPOSITIONS -- (CONTINUED)

<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................................... $102,693 $107,266
Loss before extraordinary loss................. (14,381) (11,375)
Net loss....................................... (16,020) (11,375)
Net loss applicable to common stockholders..... (22,218) (19,769)
Basic and diluted net loss per common share.... $ (0.75) $ (0.67)
</TABLE>

8. PENDING TRANSACTIONS

The Company has numerous pending transactions that are described in this
Registration Statement.

Portland, Sacramento, San Francisco and San Jose: In April 1997, the
Company entered into 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 to ARS 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 agreement also provides for the exchange of KINK-FM for KBRG-FM in the event
regulatory approval for the exchange of KUFX-FM and KRRE-FM cannot be obtained.
The Justice Department approved the exchange of KRRE-FM for KUFX-FM. Subject to
certain conditions, including the receipt of FCC approval, the transaction is
expected to be consummated in the second quarter of 1998. The Company began
programming and marketing KINK-FM and KUFX-FM pursuant to an LMA agreement in
January 1998.

Sacramento: In March 1998, the Company entered an asset exchange agreement
pursuant to which the Company's KRAK-FM would exchange FCC frequency positions
with another radio station also located in the Sacramento market for
approximately $4.4 million. Subject to the receipt of FCC approval, the
transaction is expected to be consummated in the third quarter of 1998.

San Jose and Monterey: In March 1997, the Company entered into a merger
agreement pursuant to which the Company will acquire the assets of KEZR-FM 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. Subject to the receipt of FCC approval and resolution of the
matters raised by the Antitrust Division described above, the acquisition is
expected to be consummated in the second quarter of 1998.

San Jose: In October 1997, the Company entered into an agreement to sell
KSJO-FM for approximately $30.0 million. Subject to the receipt of FCC approval,
and the expiration or earlier termination of the HSR Act waiting period, the
transaction is expected to be consummated in the second quarter of 1998.

F-79
<PAGE> 154
AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. PENDING TRANSACTIONS -- (CONTINUED)
Temple: In May 1997, the Company entered into an agreement to acquire radio
station KKIK-FM, licensed to Temple, Texas (in the Austin area) for
approximately $3.7 million. Subject to the approval of the FCC, the transaction
is expected to be consummated in the second quarter of 1998.

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 stations pursuant to an LMA in June 1997. In October 1997, the
Company entered into an agreement to terminate these agreements. (See Note 9.)

Tower Subsidiary: In December 1997, the Tower Subsidiary entered into a
merger agreement with American Tower Corporation ("ATC") pursuant to which ATC
will merge with and into ATS (the "ATC Merger"), which will be the surviving
corporation. Pursuant to the merger, ATS expects to issue an aggregate of
approximately 30.0 million shares of ATS Class A Common Stock (including shares
issuable upon exercise of options to acquire ATC common stock which will become
options to acquire ATS Class A Common Stock). ATC is engaged in the business of
acquiring, developing and leasing wireless communications sites to companies
using or providing cellular telephone, paging, microwave and specialized mobile
radio services. At December 31, 1997, ATC owned and operated approximately 775
communications towers located in 31 states. Consummation of the transaction is
subject to, among other things, the expiration or earlier termination of the HSR
Act waiting period, and is expected to occur in the Spring of 1998.

In January 1998, the Tower Subsidiary entered into an agreement to purchase
the assets relating to a teleport serving the Washington, D.C. area for a
purchase price of approximately $30.5 million. The facility is located in
northern Virginia, inside of the Washington Beltway, on ten acres. Consummation
of the transaction is expected to occur in the Spring of 1998.

ATS is negotiating certain changes in the ATS/PCS, LLC (formerly
Communications Systems Development, LLC) arrangements, including the acquisition
by ATS of the 58 communications sites in northern California presently owned by
ATS/PCS, LLC in exchange for shares of ATS Class A Common Stock, arrangements
with respect to the development of communications sites in other locations, a
priority return of ATS's construction advances, an increase in the percentage
interest of the other member in ATS/ PCS, LLC, and a management fee to ATS.

ATS is also negotiating an agreement to acquire a company which is in the
process of constructing approximately 40 towers in the Tampa, Florida area, of
which seven are presently operational. The purchase price will be equal to the
excess of (i) ten times the "Current Run Rate Cash Flow" at the time of closing,
over (ii) the principal amount of the secured note referred to below. The
purchase price will be payable in shares of Class A Common Stock (valued at
market prices shortly prior to closing) and, at the election of the seller, cash
in an amount not to exceed 49% of the purchase price. "Current Run Rate Cash
Flow" means twelve (12) times the excess of net revenues over direct operating
expenses for the month preceding closing. ATS is obligated to advance
construction funds to the seller in an aggregate amount not to exceed $12.0
million in the form of a secured note (guaranteed by the stockholders on a
nonrecourse basis and secured by the stock of the seller), of which
approximately $1.0 million was advanced through March 31, 1998. The secured note
would be payable in the event a definitive acquisition agreement is not executed
or if the acquisition were not consummated. Subject to the negotiation and
execution of a definitive agreement and to the satisfaction of certain
conditions, including, depending on the circumstances, the expiration or earlier

F-80
<PAGE> 155
AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. PENDING TRANSACTIONS -- (CONTINUED)
termination of the HSR Act waiting period, the acquisition is expected to be
consummated in the Spring of 1999.

9. SUBSEQUENT EVENTS

Subsequent to March 31, 1998, the Company consummated the following
transactions:

West Palm Beach -- In May 1998, the WTPX-FM termination agreement was
consummated and a third party acquired WTPX-FM from the seller pursuant to which
the Company received the net proceeds of certain investment notes, subject to
the valuation allowance that was recorded as of December 31, 1997.

Tower Subsidiary -- In April 1998, ATS entered into an agreement to acquire
a broadcasting tower in the Boston area for 720,000 shares of ATS Class A Common
Stock. Subject to the satisfaction of certain conditions, including the
expiration or earlier termination of the HSR Act waiting period, the acquisition
is expected to be consummated in the second quarter of 1998.

On May 12, 1998, ATS filed a registration statement (No. 333-52481) with
the Commission with respect to an underwritten public offering (the Offering) of
an aggregate of 22,918,499 shares of ATS Class A Common Stock (including an
Underwriter's over-allotment option of 2,083,500 shares) by ATS and certain
selling stockholders. Pursuant to the consummation of the Offering, ATS will
issue and sell approximately 17,400,000 shares of ATS Class A Common Stock and
receive net proceeds estimated (based on an assumed initial public offering
price of $23.00 per share) at approximately $381.5 million (exclusive of the
Underwriter's over-allotment option). ATS will receive no proceeds from the sale
of ATS Class A Common Stock by the selling stockholders. ATS expects to use such
net proceeds to redeem the Interim Preferred Stock, the net proceeds from the
sale of which will be used principally to reimburse CBS with respect to the
taxes payable as a consequence of the separation of ARS and ATS pursuant to the
CBS Merger and to reduce bank borrowings.

The Offering is subject to various conditions, including prevailing market
conditions, and therefore may change. Further, there can be no assurances that
the Offering will be completed or that, if the Offering is completed, it will be
completed on terms favorable to ATS. The registration statement relating to
these securities has been filed with the Commission but has not yet become
effective. These securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. This
communication shall not constitute an offer to sell or the solicitation of an
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. Copies of the
Prospectus relating to the Offering may be obtained from Credit Suisse First
Boston, Prospectus Department, 11 Madison Avenue, New York, New York 10010,
(212) 325-2000.

On June 4, 1998 the CBS Merger was consummated. In connection with the
merger, all of the shares of Tower owned by American Radio were distributed (the
Distribution) to American Radio common stockholders and holders of options to
acquire American Radio common stock and have been or will be distributed upon
conversion of shares of American Radio's Convertible 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, CBS Radio and now operates as an independent publicly traded company.

Pursuant to the provisions of the CBS Merger Agreement, Tower entered into
(the ARS-ATS Separation Agreement) with CBS and American Radio providing for,
among other things, the orderly separation of American Radio and Tower, the
allocation of certain tax liabilities to Tower, certain closing date adjustments
relating to American Radio, the lease to American Radio by Tower of space on
certain towers

F-81
<PAGE> 156
AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. SUBSEQUENT EVENTS -- (CONTINUED)
previously owned by American Radio and transferred to Tower, and certain
indemnification obligations (including with respect to securities law matters)
of Tower.

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 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 and was reimbursed by Tower on a
"make-whole" basis. 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 under the tax reporting method followed. 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 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 $20.0 million.

As a consequence of the CBS Merger, the Company or CBS may be required to
divest certain radio stations in order to comply with regulatory orders.

10. 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-82
<PAGE> 157
AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. SUBSIDIARY GUARANTEES -- (CONTINUED)
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-83
<PAGE> 158
AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. 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 $ 6,799 $ 12,997
Accounts receivable,
net................... 44,460 28,751 5,742 78,953
Unbilled receivables..... 3,028 3,028
Prepaid expenses and
other assets.......... 8,243 1,636 1,337 11,216
Deferred income taxes.... 4,006 2,359 63 6,428
---------- ---------- -------- ----------- ----------
Total current
assets......... 61,012 34,641 16,969 112,622
---------- ---------- -------- ----------- ----------
PROPERTY AND EQUIPMENT,
NET...................... 75,078 46,414 156,827 278,319
---------- ---------- -------- ----------- ----------
OTHER ASSETS:
Investment in and
advances to
subsidiaries.......... 1,344,168 $(1,344,168)
Investment notes
receivable............ 25,498 610 1,000 27,108
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 7,657 36,234
Unallocated purchase
price -- net........ 221,532 221,532
Deposits and other long-
term assets........... 3,120 66 5,756 8,942
Deferred income taxes.... 123,273 123,273
---------- ---------- -------- ----------- ----------
Total other
assets......... 1,730,034 1,194,835 359,218 (1,344,168) 1,939,919
---------- ---------- -------- ----------- ----------
TOTAL...................... $1,866,124 $1,275,890 $533,014 $(1,344,168) $2,330,860
========== ========== ======== =========== ==========
</TABLE>

F-84
<PAGE> 159
AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. 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 $ 112 $ 394
Accounts payable and
accrued expenses...... 27,771 $ 7,560 16,704 52,035
Due to Parent............ 125,210 $ (125,210)
Income taxes payable..... 107,016 18,758 125,774
---------- ---------- -------- ----------- ----------
Total current
liabilities.... 135,069 26,318 142,026 (125,210) 178,203
---------- ---------- -------- ----------- ----------
NONCURRENT LIABILITIES:
Deferred income taxes.... 367 185,870 186,237
Other long-term
liabilities........... 8,507 39 33 8,579
Long-term debt........... 863,361 157,037 1,020,398
---------- ---------- -------- ----------- ----------
Total noncurrent
liabilities.... 872,235 185,909 157,070 1,215,214
---------- ---------- -------- ----------- ----------
MINORITY INTEREST IN
SUBSIDIARIES............. (415) 600 78,023 78,208
---------- ---------- -------- ----------- ----------
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............ $1,866,124 $1,275,890 $533,014 $(1,344,168) $2,330,860
========== ========== ======== =========== ==========
</TABLE>

F-85
<PAGE> 160
AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. 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 broadcast revenues........ $53,789 $34,804 $ (13) $88,580
Tower revenues................ $17,925 (325) 17,600
License fees charged to
Parent...................... (4,283) 4,283 0
------- ------- ------- ------ -------
Total net revenues............ 49,506 39,087 17,925 (338) 106,180
OPERATING EXPENSES:
Operating expenses excluding
depreciation and
amortization, net local
marketing agreement and
corporate general and
administrative
expenses............... 39,664 25,687 11,495 203 77,049
Net local marketing
agreement expense........ 683 26 709
Depreciation and
amortization............. 5,228 12,790 5,802 23,820
Merger expenses............. 3,572 3,572
Corporate general and
administrative........... 1,905 541 (541) 1,905
------- ------- ------- ------ -------
OPERATING INCOME (LOSS)....... (1,546) 584 87 0 (875)
OTHER INCOME (EXPENSE):
Interest expense............ (16,583) (2,430) (19,013)
Interest income............. 330 865 1,195
Gains (loss) on sale of
assets and other, net.... (21) (54) (79) (154)
Equity in income (loss) of
subsidiaries............. (842) 1,257 415
------- ------- ------- ------ -------
INCOME (LOSS) BEFORE INCOME
TAXES....................... (18,662) 530 (1,557) 1,257 (18,432)
INCOME TAX PROVISION
(BENEFIT)................... 9,632 (260) (30) 9,402
------- ------- ------- ------ -------
Net income (loss)............. $(9,030) $ 270 $(1,527) $1,257 $(9,030)
======= ======= ======= ====== =======
</TABLE>

F-86
<PAGE> 161
AMERICAN RADIO SYSTEMS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. 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>
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) (12,690) (15,684)
Proceeds from asset and radio
station sales................ 3,952 3,952
Repayment of investment notes
receivable................... 4 2,000 2,004
Payments for purchase of tower
properties................... (71,069) (71,069)
Payments for purchase of radio
stations..................... (42,153) (42,153)
Repayments for investment notes
receivable................... (6,000) (6,000)
Deposits and other long-term
assets....................... (79) (4,076) (4,155)
------- ------- ------- ------ --------
Cash flows used for
investing
activities............ (41,270) (91,835) (133,105)
------- ------- ------- ------ --------
Financing Activities:
Borrowings under the Credit
Agreements and other......... 30,000 67,000 97,000
Repayments under the Credit
Agreements Repayments under
other obligations............ (208) (27) (235)
Distributions to minority
interest..................... (105) (105)
Dividends paid.................. (8,394) (8,394)
Net proceeds from equity
offerings and options........ 219 30,023 30,242
Investment in and advances to
subsidiaries................. 21,081 (19,966) (1,115) 0
------- ------- ------- ------ --------
Cash flows from (used
for) financing
activities............ 42,698 (19,966) 95,776 118,508
------- ------- ------- ------ --------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS................ (6,167) 318 2,203 (3,646)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD............. 10,470 1,577 4,596 16,643
------- ------- ------- ------ --------
CASH AND CASH EQUIVALENTS, END OF
PERIOD.......................... $ 4,303 $ 1,895 $ 6,799 $ 0 $ 12,997
======= ======= ======= ====== ========
</TABLE>

F-87
<PAGE> 162

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Infinity Broadcasting Corporation:

We have audited the consolidated balance sheets of 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
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

F-88
<PAGE> 163

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-89
<PAGE> 164

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-90
<PAGE> 165

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-91
<PAGE> 166

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-92
<PAGE> 167

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 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. No amortization period exceeds 40 years.

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 carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are

F-93
<PAGE> 168
INFINITY BROADCASTING CORPORATION
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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. generally accepted
accounting principles and U.S. dollars in accordance with SFAS No. 52,
"Accounting for Foreign Currency Translation."

F-94
<PAGE> 169
INFINITY BROADCASTING CORPORATION
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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.

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.

F-95
<PAGE> 170
INFINITY BROADCASTING CORPORATION
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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.

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

F-96
<PAGE> 171
INFINITY BROADCASTING CORPORATION
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$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.

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.

F-97
<PAGE> 172
INFINITY BROADCASTING CORPORATION
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 deminimus.

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-98
<PAGE> 173
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-99
<PAGE> 174
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 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.

F-100
<PAGE> 175
INFINITY BROADCASTING CORPORATION
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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-101
<PAGE> 176
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-102
<PAGE> 177
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.

F-103
<PAGE> 178

------------------------------------------------------
------------------------------------------------------
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......................... 3
Risk Factors............................... 9
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................................... 30
Management................................. 44
Principal Stockholder and Stock
Ownership................................ 51
Relationships Between the Company and
CBS...................................... 52
Description of Capital Stock............... 58
Certain Provisions of the Certificate of
Incorporation and By-laws of the
Company.................................. 60
Description of Indebtedness................ 62
Shares Eligible for Future Sale............ 65
Certain United States Tax Consequences to
Non-United States Holders................ 66
Underwriting............................... 69
Legal Matters.............................. 71
Experts.................................... 71
Available Information...................... 72
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.
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------

[LOGO] INFINITY
BROADCASTING
CORPORATION

CLASS A COMMON STOCK

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

MERRILL LYNCH & CO.
, 1998

------------------------------------------------------
------------------------------------------------------
<PAGE> 179

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED SEPTEMBER 18, 1998

PROSPECTUS

[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 shares of Class A Common Stock offered hereby, shares are
being offered for sale initially outside the United States and Canada (the
"International Offering") by the International Managers and 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."

Application will be made to list the Class A Common Stock on the New York
Stock Exchange under the symbol "INF."

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
International Managers and the U.S. Underwriters), such Class B Common Stock
will represent approximately % 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."

<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 and 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
------------------------
The date of this Prospectus is , 1998.
<PAGE> 180

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

UNDERWRITING

Merrill Lynch International and are acting as lead managers
(the "Lead Managers") 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
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 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........................................

--------
Total.................................................
========
</TABLE>

The Company has also entered into an 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") and are acting as Representatives (the "U.S.
Representatives"). Subject to the terms and conditions set forth in the U.S.
Purchase Agreement, and concurrently with the sale of 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 have agreed to purchase
from the Company, an aggregate of 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 of Class A Common Stock to be purchased by the International
Managers and the U.S. Underwriters are conditioned upon one another.

The International Managers have 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 options to the International Managers, exercisable
for 30 days after the date of this Prospectus, to purchase up to an aggregate of
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 these options
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

Alt-1
<PAGE> 181
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

these options, 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 options to the U.S.
Underwriters, exercisable for 30 days after the date of this Prospectus, to
purchase up to an aggregate of additional shares of Class A Common
Stock to cover over-allotments, if any, on terms similar to those granted to the
International Managers.

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 Stock Option Plan or in connection
with future acquisitions made by the Company in consideration for shares of
Class A Common Stock or securities convertible into or exchangeable or issuances
of shares of Class A Common Stock issued as consideration for future
acquisitions by the Company 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 that
transfers, in whole or in part, the economic consequence of ownership of the
Common Stock whether any such swap or transaction 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 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
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-2
<PAGE> 182
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

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.

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.

Alt-3
<PAGE> 183
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

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.

Alt-4
<PAGE> 184

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

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

TABLE OF CONTENTS

[LOGO] INFINITY
BROADCASTING
CORPORATION

CLASS A COMMON STOCK

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

MERRILL LYNCH INTERNATIONAL
, 1998

------------------------------------------------------
------------------------------------------------------
<PAGE> 185

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........................................ $2,950
NASD Filing Fee............................................. 1,500
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> 186

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:

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
1. UNDERWRITING AGREEMENTS.
**1.1 Form of U.S. Underwriting Agreement.
**1.2 Form of International Underwriting Agreement.
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 Amended and Restated Certificate of Incorporation of
the Registrant.
**3.4 Form of Amended and 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.
</TABLE>

II-2
<PAGE> 187

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
**4.3 Indenture dated as of February 1, 1996, among American
Radio, the subsidiary guarantors named therein and Fleet
National Bank of Connecticut, as Trustee, relating to the 9%
Senior Subordinated Notes Due 2006 (the "9% Note
Indenture").
**4.4 First Supplemental Indenture, dated as of May 31, 1996, to
the 9% Note Indenture.
**4.5 Second Supplemental Indenture dated as of October 1, 1996,
to the 9% Note Indenture.
**4.6 Third Supplemental Indenture dated as of April 28, 1998, to
the 9% Note Indenture.
**4.7 Indenture dated as of November 21, 1995, among American
Radio, EZ Communication, Inc., the subsidiary guarantors
named therein and State Street Bank and Trust Company, as
Trustee, relating to the 9 3/4% Series Subordinated Notes
Due 2005 (the "9 3/4% Note Indenture").
**4.8 First Supplemental Indenture dated as of April 4, 1997, to
the 9 3/4% Note Indenture.
**4.9 Second Supplemental Indenture dated as of April 28, 1998, to
the 9 3/4% Note Indenture.
**4.10 Indenture dated as of January 30, 1997, between American
Radio and Fleet National Bank, as Trustee relating to the
11 3/8% Subordinated Exchange Debentures due 2009.
**4.11 First Supplemental Indenture dated as of April 28, 1998,
between American Radio and State Street Bank and Trust
Company.
**4.12 Indenture dated as of June 25, 1996, between American Radio
and Bank of Montreal Trust Company relating to the 7%
Convertible Subordinated Divestitures Due 2011.
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 Intercompany Agreement between CBS and the Registrant.
**10.2 Tax Sharing Agreement between CBS and the Registrant.
**10.3 Employment Agreement, entered into on June 20, 1996 and
effective as of December 31, 1996, between CBS and Mel
Karmazin.
**10.4 Employment Agreement, entered into on May 1996, effective as
of November 28, 1995 and amended as of January 29, 1997,
between CBS Broadcasting Inc. and Daniel Mason.
**10.5 Employment Agreement, entered into as of December 22, 1989
as amended, between TDI Worldwide, Inc. and William
Apfelbaum.
**10.6 The CBS 1993 Long-Term Incentive Plan, as amended to January
28, 1998.
**10.7 The CBS Annual Performance Plan, as amended to November 1,
1996.
**10.8 The Westinghouse Executive Pension Plan, as amended to
December 1, 1997.
**10.9 The CBS 1998 Executive Annual Incentive Plan.
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 Deloitte & Touche LLP
*23.3 Consent of KPMG Peat Marwick LLP
**23.4 Consent of Cravath, Swaine & Moore (included in Exhibit
5.1).
</TABLE>

II-3
<PAGE> 188

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
24. POWERS OF ATTORNEY.
*24.1 Power of Attorney of Mel Karmazin (included in the signature
page).
*24.2 Power of Attorney of Farid Suleman (included in the
signature page).
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 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-4
<PAGE> 189

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused 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 September 18, 1998.

INFINITY MEDIA CORPORATION

By: /s/ MEL KARMAZIN
------------------------------------
Mel Karmazin

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Mel Karmazin and Farid Suleman, or any one of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place, and stead, in
any and all capacities, to sign and file (i) any and all pre- or post-effective
amendments to this Registration Statement, with all exhibits thereto, and other
documents in connection therewith, and (ii) any registration statement, and any
and all amendments thereto, relating to the offering covered hereby pursuant to
Rule 462(b) under the Securities Act of 1933, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitutes, may lawfully do or cause to be done by virtue hereof.

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>

/s/ MEL KARMAZIN Chairman, President and Chief September 18, 1998
- --------------------------------------------------- Executive Officer (Principal
Mel Karmazin Executive Officer) and
Director

/s/ FARID SULEMAN Executive Vice President, September 18, 1998
- --------------------------------------------------- Chief Financial Officer and
Farid Suleman Treasurer (Principal
Financial and Accounting
Officer) and Director
</TABLE>

II-5
<PAGE> 190

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> 191

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ----------- ------------
<C> <S> <C>
1. UNDERWRITING AGREEMENTS.....................................
**1.1 Form of U.S. Underwriting Agreement.........................
**1.2 Form of International Underwriting Agreement................
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 Amended and Restated Certificate of Incorporation of
the Registrant..............................................
**3.4 Form of Amended and 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................
**4.3 Indenture dated as of February 1, 1996, among American
Radio, the subsidiary guarantors named therein and Fleet
National Bank of Connecticut, as Trustee, relating to the 9%
Senior Subordinated Notes Due 2006 (the "9% Note
Indenture").................................................
**4.4 First Supplemental Indenture, dated as of May 31, 1996, to
the 9% Note Indenture.......................................
**4.5 Second Supplemental Indenture dated as of October 1, 1996,
to the 9% Note Indenture....................................
**4.6 Third Supplemental Indenture dated as of April 28, 1998, to
the 9% Note Indenture.......................................
**4.7 Indenture dated as of November 21, 1995, among American
Radio, EZ Communication, Inc., the subsidiary guarantors
named therein and State Street Bank and Trust Company, as
Trustee, relating to the 9 3/4% Series Subordinated Notes
Due 2005 (the "9 3/4% Note Indenture"). ....................
**4.8 First Supplemental Indenture dated as of April 4, 1997, to
the 9 3/4% Note Indenture...................................
**4.9 Second Supplemental Indenture dated as of April 28, 1998, to
the 9 3/4% Note Indenture...................................
**4.10 Indenture dated as of January 30, 1997, between American
Radio and Fleet National Bank, as Trustee relating to the
11 3/8% Subordinated Exchange Debentures due 2009...........
**4.11 First Supplemental Indenture dated as of April 28, 1998,
between American Radio and State Street Bank and Trust
Company.....................................................
**4.12 Indenture dated as of June 25, 1996, between American Radio
and Bank of Montreal Trust Company relating to the 7%
Convertible Subordinated Divestitures Due 2011..............
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 Intercompany Agreement between CBS and the Registrant.......
</TABLE>
<PAGE> 192

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ----------- ------------
<C> <S> <C>
**10.2 Tax Sharing Agreement between CBS and the Registrant........
**10.3 Employment Agreement, entered into on June 20, 1996 and
effective as of December 31, 1996, between CBS and Mel
Karmazin....................................................
**10.4 Employment Agreement, entered into in May 1996, effective as
of November 28, 1995 and amended as of January 29, 1997,
between CBS Broadcasting Inc. and Daniel Mason. ............
**10.5 Employment Agreement, entered into as of December 22, 1989
and amended, between TDI Worldwide, Inc. and William
Apfelbaum. .................................................
**10.6 The CBS 1993 Long-Term Incentive Plan, as amended to January
28, 1998. ..................................................
**10.7 The CBS Annual Performance Plan, as amended to November 1,
1996. ......................................................
**10.8 The Westinghouse Executive Pension Plan, as amended to
December 1, 1997............................................
**10.9 The CBS 1998 Executive Annual Incentive Plan................
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 Deloitte & Touche 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 (included in the signature
page).......................................................
*24.2 Power of Attorney of Farid Suleman (included in the
signature page).............................................
27. FINANCIAL DATA SCHEDULE.....................................
*27.1 Financial Data Schedule.....................................
</TABLE>

- ---------------
* Filed herewith.

** To be filed by amendment.

<PAGE> 1
EXHIBIT 23.1

When the Reorganization referred to in notes 1 and 16(b) of the Notes to the
Combined Financial Statements has been consummated, we will be in a position to
render the following report.

/s/ KPMG Peat Marwick LLP

The Board of Directors
Infinity Broadcasting Corporation

Under date of September 15, 1998, we reported on the 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, which are included in the registration statement. In connection with our
audits of the aforementioned combined financial statements, we also audited the
related combined financial statement schedule in the registration statement.
This combined financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
combined financial statement schedule based on our audits. In our opinion, such
combined financial statement schedule, when considered in relation to the basic
combined financial statements taken as a whole, present fairly, in all material
respects, the information set forth therein.

We consent to the use of our reports included herein and to the reference to our
firm under the heading "Experts" in the prospectus.

New York, New York
September 15, 1998

<PAGE> 1

EXHIBIT 23.3

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
Infinity Broadcasting Corporation

We consent to the use of our report dated September 15, 1998, related to
Infinity Broadcasting Corporation and Subsidiaries as of December 31, 1995 and
1996 and for each of the years then ended December 31, 1996 included herein and
to the reference to our firm under the heading "Experts" in the registration
statement.

KPMG PEAT MARWICK LLP

New York, New York
September 15, 1998

<ARTICLE> 5

<S> <C> <C> <C> <C> <C>
<PERIOD-TYPE> YEAR YEAR YEAR 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996 DEC-31-1997 JUN-30-1997 JUN-30-1998
<PERIOD-END> DEC-31-1995 DEC-31-1996 DEC-31-1997 JUN-30-1997 JUN-30-1998
<CASH> 15 19,882 22,522 26,590 43,391
<SECURITIES> 0 0 0 0 0
<RECEIVABLES> 122,935 310,949 350,000 303,485 448,015
<ALLOWANCES> 4,332 11,417 15,086 13,722 30,569
<INVENTORY> 0 0 0 0 0
<CURRENT-ASSETS> 132,965 437,775 399,025 356,328 540,138
<PP&E> 116,040 159,920 174,094 164,155 303,634
<DEPRECIATION> 27,672 35,305 55,623 42,790 62,866
<TOTAL-ASSETS> 1,878,208 7,261,952 7,074,103 7,142,826 10,360,320
<CURRENT-LIABILITIES> 53,465 164,372 151,819 166,078 243,414
<BONDS> 0 150,494 2,092 2,092 728,600
0 0 0 0 0
0 0 0 0 0
<COMMON> 0 0 0 0 0
<OTHER-SE> 1,659,602 6,418,701 6,397,388 6,460,076 8,272,349
<TOTAL-LIABILITY-AND-EQUITY> 1,878,208 7,261,952 7,074,103 7,142,826 10,360,320
<SALES> 216,288 554,088 1,480,091 691,391 785,372
<TOTAL-REVENUES> 216,288 554,088 1,480,091 691,391 785,372
<CGS> 136,419 343,920 888,405 432,900 465,776
<TOTAL-COSTS> 136,419 343,920 888,405 432,900 465,776
<OTHER-EXPENSES> 26,650 70,962 219,412 109,316 114,809
<LOSS-PROVISION> 734 2,398 10,382 3,170 8,163
<INTEREST-EXPENSE> 0 0 3,645 3,434 4,760
<INCOME-PRETAX> 53,410 139,515 374,607 146,288 200,548
<INCOME-TAX> 25,737 67,949 196,978 76,975 102,229
<INCOME-CONTINUING> 27,673 71,566 177,629 69,313 98,319
<DISCONTINUED> 0 0 0 0 0
<EXTRAORDINARY> 0 0 0 0 0
<CHANGES> 0 0 0 0 0
<NET-INCOME> 27,673 71,566 177,629 69,313 98,319
<EPS-PRIMARY> 0 0 0 0 0
<EPS-DILUTED> 0 0 0 0 0

</TABLE>