8-K 1 e8-k.txt CITADEL BROADCASTING CO. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) June 28, 2000 Citadel Broadcasting Company ---------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Nevada ---------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 333-36771 86-0703641 ------------------------ --------------------------- (Commission File Number) (IRS Employer Identification No.) City Center West, Suite 400 7201 West Lake Mead Boulevard Las Vegas, Nevada 89128 ---------------------------------------- ---------------------- (Address of Principal Executive Offices) (Zip Code) (702) 804-5200 -------------------------------------------------- (Registrant's Telephone Number, Including Area Code) 2 This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based largely on current expectations and projections about future events and financial trends affecting Citadel Broadcasting Company's business. The words "believes," "expects" and "intends" and similar words are intended to identify forward-looking statements. In addition, any statements that refer to expectations or other characterizations of future events or circumstances are forward-looking statements. The forward-looking statements in this report are subject to risks, uncertainties and assumptions including, among other things: o the realization of Citadel Broadcasting's business strategy, o general economic and business conditions, both nationally and in Citadel Broadcasting's radio markets, o Citadel Broadcasting's expectations and estimates concerning future financial performance, financing plans and the impact of competition, o anticipated trends in Citadel Broadcasting's industry, and o the impact of current or pending legislation and regulation and antitrust considerations. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this report might not transpire. Citadel Broadcasting undertakes no obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On June 28, 2000, Citadel Broadcasting Company completed its acquisition of all of the issued and outstanding Capital Stock of Bloomington Broadcasting Holdings, Inc. from the stockholders of Bloomington Broadcasting Holdings. Bloomington Broadcasting Holdings owned and operated three FM radio stations and one AM radio station serving the Grand Rapids, Michigan market, three FM radio stations and one AM radio station serving the Columbia, South Carolina market, three FM radio stations and one AM radio station serving the Chattanooga, Tennessee market, two FM and three AM radio stations serving the Johnson City/Kingsport/Bristol, Tennessee market and two FM radio stations and one AM radio station serving the Bloomington, Illinois market. The aggregate purchase price was approximately $175.9 million in cash, which amount includes the repayment of indebtedness of Bloomington Broadcasting Holdings and a deferred obligation relating to a recent radio station purchase by Bloomington Broadcasting Holdings. The purchase price was paid with the remaining proceeds from Citadel Broadcasting's parent's, Citadel Communications Corporation, February 2000 public offering of shares of its common stock and amounts borrowed under Citadel Broadcasting's credit facility with Credit Suisse First Boston, as Lead Arranger, Administrative Agent and Collateral Agent; FINOVA Capital Corporation, as Syndication Agent; First Union National Bank and Fleet National Bank, as Documentation Agents; and Credit Suisse First Boston, Bank of America, N.A., Bank of Montreal, The Bank of New York, Bank of Nova Scotia, The Chase Manhattan Bank, Credit Industrial et Commercial, FINOVA -2- 3 Capital Corporation, First Union National Bank, Fleet National Bank, The Industrial Bank of Japan, Limited, Webster Bank, Michigan National Bank, Natexis Banque Populaires (formerly known as Natexis Banque BFCE), US Bank National Association, ING (U.S.) Capital LLC, The Fuji Bank, Limited, Dai-Ichi Kangyo Bank Ltd., First Hawaiian Bank, General Electric Capital Corporation, Suntrust Bank, Inc., Cooperative Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", New York Branch, Summit Bank, Royal Bank of Canada, and National City Bank, as lenders. Immediately following the acquisition, Bloomington Broadcasting Holdings was merged with and into Citadel Broadcasting. Citadel Broadcasting intends to operate the radio stations acquired. Certain financial information of Bloomington Broadcasting Holdings, Inc. and Subsidiaries and pro forma financial information of Citadel Broadcasting Company is included in Item 7 of this report. -3- 4 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements. The following financial statements of Bloomington Broadcasting Holdings, Inc. and Subsidiaries are included in this report: Independent Auditors' Report Consolidated Balance Sheet as of December 31, 1999 Consolidated Statement of Income for the year ended December 31, 1999 Consolidated Statement of Stockholders' Equity for the year ended December 31, 1999 Consolidated Statement of Cash Flows for the year ended December 31, 1999 Notes to Consolidated Financial Statements Consolidated Balance Sheet as of March 31, 2000 (unaudited) Consolidated Statements of Operations for the three month periods ended March 31, 2000 and 1999 (unaudited) Consolidated Statement of Stockholders' Equity for the three month period ended March 31, 2000 (unaudited) Consolidated Statements of Cash Flows for the three month periods ended March 31, 2000 and 1999 (unaudited) Notes to Condensed Consolidated Financial Statements (unaudited) (b) Pro Forma Financial Information. The following pro forma financial information of Citadel Broadcasting Company is included herein: Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2000 Unaudited Pro Forma Condensed Consolidated Statement of Operations for the three months ended March 31, 2000 Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 1999 (c) Exhibits. The following exhibits are filed as part of this report: 2.1 Stock Purchase Agreement dated January 23, 2000 by and among Bloomington Broadcasting Holdings, Inc., the stockholders of Bloomington Broadcasting Holdings, Inc. and Citadel Broadcasting Company (incorporated by reference to Exhibit 2.7 to Citadel Communications Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 1999). 23.1 Consent of Dunbar, Breitweiser & Company, LLP. -4- 5 BLOOMINGTON BROADCASTING HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL REPORT DECEMBER 31, 1999 -5- 6 INDEPENDENT AUDITORS' REPORT To the Board of Directors Bloomington Broadcasting Holdings, Inc. Bloomington, Illinois We have audited the accompanying consolidated balance sheet of Bloomington Broadcasting Holdings, Inc. and subsidiaries as of December 31, 1999, and the related consolidated statements of income, stockholders' equity and cash flows for the year 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 audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides 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 Bloomington Broadcasting Holdings, Inc. and subsidiaries as of December 31, 1999, and the results of their operations and their cash flows for the year then ended in conformity with generally accepted accounting principles. /s/ DUNBAR, BREITWEISER & COMPANY LLP Bloomington, Illinois February 18, 2000 -6- 7 BLOOMINGTON BROADCASTING HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET December 31, 1999

See Notes to Consolidated Financial Statements. -7- 8 BLOOMINGTON BROADCASTING HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME Year Ended December 31, 1999

See Notes to Consolidated Financial Statements. -8- 9 BLOOMINGTON BROADCASTING HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY Year Ended December 31, 1999

See Notes to Consolidated Financial Statements. -9- 10 BLOOMINGTON BROADCASTING HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended December 31, 1999

See Notes to Consolidated Financial Statements. -10- 11 BLOOMINGTON BROADCASTING HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Nature of Business, Use of Estimates and Significant Accounting Policies Nature of business: The Company and its subsidiaries operate AM and FM radio stations in Bloomington-Normal, Illinois; Chattanooga, Tennessee; Johnson City-Kingsport, Tennessee and Bristol, Virginia; Holland-Grand Rapids, Michigan; and Columbia and Lexington, South Carolina. The stations are subject to regulation by the Federal Communications Commission. The Company and its subsidiaries grant credit on terms that management establishes for individual accounts. The Companies operated under the following business names during 1999: Bloomington Broadcasting Corp. - Twin-Cities Broadcasting Corp. - WJBC (AM), WBNQ (FM), WBWN (FM) Radio Chattanooga, Inc. - WGOW (AM), WSKZ (FM), WGOW (FM) and WOGT (FM) Tri-Cities Radio Corp. - WJCW (AM), WQUT (FM), WKIN (AM) and WKOS (FM) Michigan Media, Inc. - WBBL (AM), WKLQ (FM), WLAV (FM) and WODJ (FM) Radio South Carolina, Inc. - WISW (AM), WTCB (FM), WOMG (FM) and WLXC (FM) Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting policies: Principles of consolidation: All subsidiary companies are wholly-owned and are included in the accompanying consolidated financial statements. All material intercompany balances and transactions have been eliminated in consolidation. Cash and cash equivalents: For purposes of reporting cash flows, the Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. -11- 12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Property and equipment: Property and equipment are stated at cost. Major improvements to existing property and equipment are capitalized. Expenditures for maintenance and repairs which do not extend the life of the applicable assets are charged to expense in the period incurred. Depreciation expense of property and equipment is computed principally on the straight-line method over the following estimated useful lives: Years ----- Land improvements 5-20 Buildings and improvements 4-39 Technical equipment: Studio and control 3-35 Transmitting and radiating 3-20 General 3-20 Furniture and fixtures 3-20 Vehicles and airplane 3-10 It is the Company's policy to include amortization expense on assets acquired under capital leases with depreciation expense on owned assets. When properties are retired or otherwise disposed of, the asset and accumulated depreciation accounts are adjusted accordingly. Any resulting gain or loss is reflected in income in the period realized. Advertising: The Company expenses the costs of advertising as incurred. Total advertising and promotion expenses for the year ended December 31, 1999 was $1,249,113. Income taxes: Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Stock option plan: The Company has adopted SFAS No. 123, "Accounting for Stock-Based Compensation," (SFAS No. 123) which permits entities to recognize as expense over the vesting period the fair value of all stock-based awards on the date of grant. Alternatively SFAS No. 123 also allows entities to -12- 13 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continue to apply the provisions of APB Opinion No. 25 "Accounting for Stock Issued to Employee", and provide pro forma net income disclosures for employee stock option grants made in 1995 and future years 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. There are no unexercised options outstanding as of December 31, 1999. There was no stock-based compensation cost reflected in 1999 net income and there would likewise be none on a pro forma basis. Note 2. Leveraged Buyout Effective on July 1, 1998, Bloomington Broadcasting Holdings, Inc. (formerly Bloomington Broadcasting Acquisition Corp.) purchased 100% of the stock of Bloomington Broadcasting Corporation. The transaction has been recorded in accordance with the "purchase method" of Accounting Principles Board (APB) Opinion No. 16, Business Combinations, and guidance from the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB). The stock purchase was financed through a combination of bank debt, stockholder debentures and issuance of preferred stock. These financial statements include the financial position and results of operations of Bloomington Broadcasting Holdings, Inc., Bloomington Broadcasting Corporation, and all subsidiaries, for all of calendar year 1999. Bloomington Broadcasting Holdings, Inc. was formed in 1998 for the purpose of this acquisition and had no operations in 1999 other than its ownership of Bloomington Broadcasting Corporation. The acquisition cost of Bloomington Broadcasting Corporation was approximately $64,478,000. Amortization of goodwill and other intangible assets acquired in this transaction is computed on the straight-line basis over various periods from 15 years to 50 years. -13- 14 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 3. Amortization of Intangibles Intangible assets are recorded at acquisition cost and are amortized on the straight line method over their estimated useful lives as follows: Years ----------- Premium audience growth pattern asset 21.2 - 45.3 Favorable transmitter site lease 37.3 - 50.0 Going concern value 15.0 - 40.0 FCC licenses 10.0 - 15.0 Goodwill 40.0 Organization and start-up costs 5.0 Agreement not to compete 5.0 Other advertising contracts 0.5 - 40.0 Fixed asset delivery premium 9.0 Other intangible assets 15.0 - 40.0 Consulting agreement 1.0 - 5.0 Favorable antenna site agreements 0.7 - 23.9 Favorable studio and office space lease 1.4 - 1.5 FCC licenses and goodwill acquired prior to October 31, 1970 in the amount of $77,135 are not being amortized and are carried at cost. Costs and accumulated amortization of intangibles at December 31, 1999, are as follows: 1999 -------------------------------------- Accumulated Net Book Cost Amortization Value ----------- ------------ ---------- Premium audience growth pattern asset $ 8,921,320 $ 859,258 $ 8,062,062 Favorable transmitter site lease 2,554,630 152,949 2,401,681 Going concern value 5,168,726 329,278 4,839,448 FCC licenses 37,253,317 5,858,892 31,394,425 Goodwill 12,454,084 467,352 11,986,732 Organization and start-up costs 72,061 72,061 -- Agreement not to compete 1,000 1,000 -- Other advertising contracts 21,852 12,758 9,094 Fixed asset delivery premium 152,900 152,900 -- Other intangible assets 579,432 177,796 401,636 Consulting agreement 25,000 18,333 6,667 Favorable antenna site agreements 16,953 5,593 11,360 Favorable studio and office space lease 34,273 34,273 -- ----------- ---------- ----------- $67,255,548 $8,142,443 $59,113,105 =========== ========== =========== -14- 15 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 4. Pledged Assets and Notes Payable The Company and its subsidiaries had the following notes payable at December 31, 1999: First Union National Bank, Fleet National Bank, Bank One Indiana, N.A., collectively as lender, fixed and variable interest rates as described below, secured by substantially all assets and communications licenses of Bloomington Broadcasting Holdings, Inc. and Bloomington Broadcasting Corporation. Revolving Credit Notes- combination of Base Rate note, presently 10.375 % and LIBOR Rate note, presently 9.5%, interest payable quarterly (Base Rate notes) and monthly (LIBOR Rate notes); commitment fee, presently .5% due quarterly on average daily unused portion of the Revolving Credit Commitment; if total outstanding principal exceeds the Revolving Credit Commitment such excess shall be repayable immediately; optional principal payments allowed in a minimum amount of $250,000 for Base Rate notes and $2,000,000 for LIBOR Rate notes; Revolving Credit Commitment presently $15,000,000 with permanent partial reductions scheduled beginning in March 2002; interest on Base Rate notes at higher of First Union National Banks' prime rate, or Federal Funds Rate plus .5%; Revolving Credit Facility shall terminate on the earliest of June 30, 2005 or the date of termination by either the Company or First Union National Bank. Base Rate Note LIBOR Rate Notes Term A and Term B Notes- LIBOR Rate notes presently 9.5% on Term A and 9.75% on Term B, interest payable monthly, principal payable quarterly beginning on December 31, 1999 in increments stipulated in the note (see five-year maturity schedule at end of the footnote), optional principal prepayments of at least $2,000,000 allowable; mandatory principal prepayments required in the amount of 100% of Net Cash Proceeds from any of the following events, a) debt proceeds not permitted, b) issuance of equity securities, c) asset sales, d) insurance proceeds, e) excess cash flow. Term A Notes Term B Notes Stockholders, interest at 10.25%, fixed rate, interest payable semiannually at June 30 and December 31, principal due in full on June 30, 2008. These notes are subordinate to the senior indebtedness described above. There are eleven individual notes, all of which are uncollateralized. The maker of the notes, at its option, may pay interest by the issuance of additional subordinated notes ("PIK Note") equal to such interest payment provided that advance notice is given under the terms of the note. Stockholders, "PIK Notes," several issue dates, interest at 10.25%, fixed rate, interest payable semiannually at June 30, and December 31. Maturity date is June 30, 2008. 1999 ------------------------- Payments Due Within Total One Year ----------- ---------- Base Rate Note $ 2,400,000 $ -- LIBOR Rate Notes 2,000,000 -- Term A Notes 19,000,000 2,000,000 Term B Notes 19,800,000 200,000 Stockholders 16,011,000 -- Stockholders (PIK) 2,582,230 -- ----------- ---------- $61,793,230 $2,200,000 =========== ========== -15- 16 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Credit Agreement with First Union National Bank (and other co-lenders), has several restrictive covenants. The Company must maintain a certain leverage ratio, fixed charge coverage ratio, and interest coverage ratio during the term of the loans. The Company can not, with some exceptions, incur any debt. There are also limitations on future mergers, liquidations or sales of assets. Also, the Company may not declare or pay any dividends on any of its capital stock, or purchase, redeem or retire any of its capital stock. See Note 16 for sale of stock to Citadel Broadcasting Company. Aggregate future maturities on the above notes are: 2000 $ 2,200,000 2001 2,200,000 2002 3,200,000 2003 4,200,000 2004 4,200,000 Note 5. Deferred Compensation and Life Insurance In connection with an employment agreement, a provision has been made for future compensation which is payable to an employee or his heirs in annual payments of $10,000 per year for ten years commencing on January 1, 2002 if the employee remains employed by a subsidiary Company from January 1, 1992 through December 31, 2001. In January, 2000, the employee voluntarily terminated his employment with the Company. Accordingly, the present value of the estimated liability under this agreement was eliminated through a credit of approximately $44,000 to deferred compensation expense for 1999. Bloomington Broadcasting Corporation established certain non-qualified deferred compensation plans accompanied by rabbi trusts which are generally available to general managers, officers and other highly compensated employees of the parent company and its subsidiaries. Qualifying employees may elect to defer portions of their salaries which are then deposited into segregated trust accounts. The employees designate the trustees and direct the investment of the funds for their individual accounts. The amounts held in the trusts will at all times remain solely the property of the participating company and are subject to the claims of its general creditors. -16- 17 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Upon termination of employment, participating employees are entitled to receive the value of the assets in the trust accounts established for their benefit. The plans also permit early withdrawals of the deferred compensation to the extent that a participant is subject to an unforeseeable emergency which would otherwise result in severe financial hardship. The total amounts recorded as expense under these non-qualified deferred compensation plans was $128,299 for the year ended December 31, 1999. The investments held in the rabbi trust accounts are carried at fair value as of December 31, 1999, as follows: 1999 --------- Cost of investments $ 470,306 Unrealized gains 137,368 Unrealized losses (27,770) --------- $ 579,904 ========= The net unrealized gain included as accumulated other comprehensive income in stockholder's equity at December 31, 1999 was $70,599, net of deferred income taxes of $39,000. Note 6. Capital Stock The outstanding preferred stock is Series A Convertible Participating Preferred Stock. The Shareholders Agreement, dated June 30, 1998, places certain restrictions on transfers of such shares. The Agreement also contains a "Call" provision, whereby, shares held by "Management Investors" are redeemable by the Company or the "Venture Investors." Each share of preferred stock is entitled to one vote, based on the current "common stock conversion rate." The holders of Series A Convertible Participating Preferred Stock are entitled to receive cumulative, compounding dividends of 5% of the difference between the convertible base liquidation amount (presently $110 per share) and ten dollars, per share. The Series A Convertible Participating Preferred Stock has a liquidation preference over other shares of company stock. The liquidation price per share is the convertible base liquidation amount, presently, $110, plus any accumulated but unpaid dividends. In the event of an "extraordinary transaction", if the holders of Series A Convertible Participating Preferred Stock have not converted their shares into Series B Redeemable Preferred Stock or common stock, then the Company shall redeem all the shares at the convertible base liquidation amount. Extraordinary transactions include a) mergers or consolidations, b) sale or transfer of all assets, c) a purchase of the company, d) redemption of a majority of shares, or e) a public offering. See Note 16 for sale of stock to Citadel Broadcasting Company. -17- 18 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The authorized number of shares of preferred stock is 1,700,000, of which 300,000 shares are designated as Series A Convertible Participating Preferred Stock (par value $.01 per share), 400,000 shares are designated as Series B Redeemable Preferred Stock (par value $.01 per share), and 1,000,000 shares are undesignated. The authorized number of shares of common stock is 300,000, at par value of $.01 per share. Holders of common stock are entitled to one vote for each share held, and vote together with the holders of the convertible preferred stock as a single class. Holders of common stock are entitled to dividends only after all preferential preferred stock dividends have been paid. If additional dividends are declared, the holders of common stock will share in such dividends with the convertible preferred stockholders as a single class of equal shareholders. As of December 31, 1999, the aggregate preferred stock dividends accumulated, not declared or paid was $837,911. Note 7. Income Tax Matters The Company reports its income as the parent company of a consolidated federal income tax return which includes the operations of the following subsidiaries: Bloomington Broadcasting Corporation Twin-Cities Broadcasting Corp. Radio Chattanooga, Inc. Tri-Cities Radio Corp. Michigan Media, Inc. Radio South Carolina, Inc. The members of the consolidated group have elected to allocate income taxes among the members of the group by an agreement executed on January 1, 1986, under which each company records a consolidated return tax benefit or cost based upon its current taxable income or loss and governed by any tax elections made for the consolidated return and the tax rate effective for the consolidated group. This benefit or cost is due from or to the parent company, respectively. These allocations are reflected on the balance sheet as consolidated return tax benefit or liability. A similar approach is used for the allocation of deferred income taxes. -18- 19 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Net deferred tax assets (liabilities) consist of the following components as of December 31, 1999: 1999 --------- Deferred tax assets $1,259,000 Deferred tax asset valuation allowances -- Deferred tax liabilities (753,000) ---------- Net deferred tax assets $ 506,000 ========== Deductible temporary differences giving rise to deferred tax assets primarily relate to accounts receivable, allowances for doubtful accounts, deferred compensation payable, accrued vacation pay, and State and City unused net operating loss carryforwards. Taxable temporary differences giving rise to deferred tax liabilities relate to property and equipment and intangibles. The components giving rise to the net deferred tax liabilities described above have been included in the accompanying balance sheets as of December 31, 1999: 1999 -------- Current assets $214,000 Noncurrent assets, net 292,000 -------- $506,000 ======== The current and noncurrent deferred tax assets are net of allocations of the valuation allowances of $0 for 1999. The valuation allowances have been recorded to reduce the total deferred tax assets to an amount that management believes will ultimately be realized. Approximate Tax Effect 1999 -------- Deferred tax assets-current Allowance for doubtful accounts $ 61,000 Accrued vacation 112,000 State net operating losses 41,000 -------- $214,000 ======== Deferred tax assets-noncurrent Deferred compensation payable $177,000 Intangible assets 352,000 State net operating losses 122,000 -------- $651,000 ======== Deferred tax liabilities-noncurrent Property and equipment $359,000 -------- $359,000 ======== -19- 20 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Reconciliation between the actual provision for income taxes and that computed by applying the U.S. statutory rate to income before income tax is as follows: 1999 --------- Provision (refund) computed at statutory rate (34%) $(851,216) Amortization of intangible assets 223,311 Nondeductible meals and entertainment 16,927 State income taxes (refunds), net of federal income tax 116,681 Other, net 3,023 --------- Federal and state income tax expense (credit) $(491,274) ========= For State and City income tax purposes, under provisions of Tennessee, South Carolina and City of Grand Rapids, Michigan tax statutes and regulations, the Company and its subsidiaries have $6,473,258 in net operating loss carryforwards at December 31, 1999, which may be used to offset future taxable income of the Company and its subsidiaries. These carryforwards expire as follows: Year Carry- Radio Radio South forwards Chattanooga Michigan Carolina Expire Inc. Media, Inc. Inc. ---------- ---------- ---------- ------------ 2000 $ -- $ -- $ -- 2001 -- 119,778 -- 2002 -- 408,647 -- 2003 -- 804,183 -- 2004 -- 524,299 -- 2005 -- 675,933 158,176 2006 -- 113,970 1,258,238 2007 -- -- 1,223,988 2008 -- -- 319,730 2009 -- -- 41,433 2010 -- -- 138,686 2011 -- 393,397 -- 2012 150,819 11,091 -- 2013 130,890 -- -- -------- ---------- ---------- $281,709 $3,051,298 $3,140,251 ======== ========== ========== -20- 21 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The provision for income taxes charged to operations for the year ended December 31, 1999 consists of the following: 1999 --------- Current tax expense $ 264,726 Deferred tax (benefit) (756,000) --------- $(491,274) ========= Note 8. Leases The Company and its subsidiaries rent vehicles, office equipment, studio space, office space and an AM tower under various operating leases. These leases expire between December 1999 and December 2013. Generally, the Company and its subsidiaries are required to carry liability and property damage insurance, to pay some common area charges, real estate taxes, and to maintain the properties. Two subsidiaries also lease land where transmitter towers and buildings are located. The first lease (WTCB) expires in December 2026 and the second lease (WBWN) expires in May 2047. The subsidiaries are required to pay all utilities, property taxes and other expenses incidental to the maintenance and operation of the transmitter building and equipment. The subsidiaries are also required to carry liability and property damage insurance. No rental payments are due on this first lease. Instead, the subsidiary must offer space on the tower to the lessor for the lessor's communication antennae. Rental payments of $150 per month are due on the second lease. The total minimum rental commitments under the operating leases described above are due as follows: Year Ending December 31, ------------------------ 2000 $293,432 2001 217,537 2002 171,874 2003 39,388 2004 31,300 Due thereafter 220,400 -------- $973,931 ======== Total rent expenses under operating leases was $246,676 for the year ended December 31, 1999. -21- 22 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 9. Employees' Profit-Sharing Plan The Company and its subsidiaries have an employees' profit-sharing plan covering substantially all employees to which both the employer and eligible employees contribute. The Company's discretionary contributions for 1999 were 2.6%, of net operating earnings, as defined, before depreciation and amortization. Amounts in excess of this amount may be contributed at the discretion of the Board of Directors, but are not to exceed the maximum amount deductible for federal income tax purposes. The Company is also required to make matching contributions equal to 1% of the compensation of employees who contribute to the plan through salary deferral elections. The annual discretionary contributions to the plan for the year ended December 31, 1999 was $226,772. The total matching contributions were $70,247 for the year ended December 31, 1999. Note 10. Concentrations of Credit Risk Arising from Cash Deposits in Excess of Insured Limits The parent and subsidiary companies maintain cash balances at financial institutions in Bloomington, Illinois; Chattanooga, Tennessee; Knoxville, Tennessee; Grand Rapids, Michigan; and West Columbia, South Carolina. Accounts at these institutions are insured by the Federal Deposit Insurance Corporation up to aggregate balances of $100,000 per Company. At December 31, 1999, the Company's uninsured cash balances totaled $410,425, including $308,936 held in repurchase agreements which are collateralized by U.S. Government agency securities held by the bank. This uninsured total does not reflect deductions for outstanding checks not yet presented to the banks for payment or transfers to affiliated companies on the following business day. The Company does not believe there is a significant risk of loss to these deposits. Note 11. Non-competition Agreements A subsidiary acquired certain assets of Sattler Broadcasting, Inc. (radio station WOGT) in 1993. In connection with this purchase a non-competition agreement was obtained from Virginia Sattler, the sole shareholder of Sattler Broadcasting, Inc. The terms of this agreement, which expired in 1998, required the Company to pay Ms. Sattler $66,667 in 1998. -22- 23 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Effective May 1, 1996, Bloomington Broadcasting Corporation acquired certain assets of McLean County Broadcasters, Inc. related to radio station WBWN-FM, licensed to Leroy, Illinois. The asset purchase agreement also provided for a five-year non-competition agreement with the sellers for $25,000. In addition, the Company entered into a consulting agreement, which includes a non-compete provision, with an employee of WBWN. The consulting agreement provides for payments by the Company of $25,000 per year for a ten year period, ending on April 30, 2006. Note 12. Financial Instruments The Company has entered into Interest Rate Swap agreements with First Union National Bank relative to the Term A and Term B portions of the borrowing from First Union National Bank as described in Note 4 to these financial statements. The current notional amount is $15,000,000 of the Term A notes and $20,000,000 of the Term B notes. The nature and terms of the interest rate swaps are as follows: TERM A TERM B ------------- ----------- Transaction type Interest rate Interest rate swap swap Effective date July 30, 1998 July 30, 1998 Termination date June 29, 2001 June 30, 2003 Term 3 years 5 years Payment dates last day of last day of each month each month Fixed rate 5.86% 5.94% Floating rate LIBOR LIBOR The interest rate swap agreements, in effect, create fixed rate loans for much of the total borrowed from First Union National Bank. The instruments' market risk is that fluctuations in interest rates may make the swaps less valuable. The agreements are held for non-trading purposes. The Company's objective for holding the interest rate swaps is to hedge the risk of rising interest rates on its long-term financing. The Company is required to pay interest monthly on the Term A and Term B notes and the swap agreements, and the gain or loss resulting from the interest rate swap agreements is then recorded as a corresponding increase or decrease to interest expense on the underlying debt. -23- 24 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 13. Stock Option Plan The Company has established the Bloomington Broadcasting Holdings, Inc. 1998 Stock Option and Grant Plan (the "Plan"). The purpose of the Plan is to encourage and enable the officers, employees, directors, consultants, advisors and other key persons of the Company to acquire a proprietary interest in the Company. The maximum number of shares of stock reserved and available for issuance under the Plan is 12,210 shares of common stock. During 1998, 11,477.40 shares of common stock were purchased under Restricted Stock Purchase Agreements pursuant to the Plan. The price paid for the shares issued during 1998 was $1.00 per share. No shares were issued during 1999. There are no unexercised options outstanding as of December 31, 1999. Note 14. Barter Transactions (Trade Revenues and Expenses) Barter transactions are recorded at the estimated fair values of the products and services received. Barter revenues are recognized when commercials are broadcast. Assets received in exchange for broadcast time are recorded when received. Services are recorded when the corresponding revenue is recorded. 1999 ---------- Trade agreement revenue $1,155,560 Trade agreement expense $1,101,194 Note 15. Radio Station Purchase On February 15, 1999, Radio South Carolina, Inc. had reached an agreement to acquire substantially all of the operating assets and the license of radio station WLXC (FM) at a cost of $3,200,000. The Company financed this acquisition through the Revolving Credit Commitment with First Union National Bank, closing on July 1, 1999. The Company had been operating the station since March 1, 1999 under a Lease Management Agreement. Note 16. Subsequent Events On January 6, 2000, Michigan Media, Inc. (a subsidiary of the Company) acquired the station assets and broadcast rights of WODJ (FM) in Greenville, Michigan for $7,500,000. On January 10, 2000, Tri-Cities Radio Corp. (a subsidiary of the Company) entered into an asset purchase agreement to acquire the station assets and broadcast rights of WGOC (AM) in Blountville, Tennessee for $850,000. The Company began operating the station on February 1, 2000. Closing will take place following FCC consent. On January 23, 2000, the Company entered into a definitive letter of intent to sell 100% of its stock to Citadel Broadcasting Company ("Citadel"), a subsidiary of Citadel Communications Corporation, for $176 million. The transaction will be recorded under the purchase method of accounting. Citadel has delivered to the Company an irrevocable letter of credit in favor of the Company for $15 million to secure consummation of the transaction. -24- 25 BLOOMINGTON BROADCASTING HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET March 31, 2000 (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 978,476 Accounts receivable, less allowance for doubtful accounts of $140,844 4,790,322 Other receivables 41,753 Prepaid expenses 69,730 Refundable income taxes 39,100 Deferred income taxes 214,000 ----------- Total current assets $ 6,133,381 ----------- INVESTMENTS AND OTHER ASSETS Prepaid expenses $ 20,833 Frequency swap option 944,831 Deferred compensation trust accounts 618,232 Deferred income taxes 744,000 ----------- $ 2,327,896 ----------- PROPERTY AND EQUIPMENT Land and land improvements $ 910,087 Buildings and improvements 2,908,727 Technical and other equipment 10,338,709 Furniture and fixtures 1,483,936 Vehicles 651,420 ----------- $16,292,879 Less accumulated depreciation 10,920,759 ----------- $ 5,372,120 ----------- INTANGIBLES, at amortized cost $63,957,473 ----------- $77,790,870 ===========

See Notes to Condensed Consolidated Financial Statements (Unaudited). -25- 26 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Scheduled maturities of long-term debt $ 2,200,000 Accelerated maturities of long-term bank debt 47,450,000 Accelerated maturities of long-term stockholders' debt and related accrued interest 19,046,453 Frequency swap obligation 944,831 Accounts payable 1,373,756 Accrued expense 1,213,374 Income taxes payable 11,400 ----------- Total current liabilities $72,239,814 ----------- DEFERRED COMPENSATION $ 618,232 ----------- COMMITMENTS STOCKHOLDERS' EQUITY Capital stock: Preferred, 5% cumulative, Series A Convertible Participating; par value $.01 share; authorized 1,700,000 shares; issued and outstanding 109,890 shares; ($12,087,900 aggregate liquidation preference) $ 1,099 Common, $.01 par value; authorized 300,000 shares, issued and outstanding 11,477.40 shares 115 Retained Earnings (deficit) (3,713,321) Accumulated other comprehensive income 91,737 Paid In Capital 8,553,194 ----------- $ 4,932,824 ----------- $77,790,870 ===========

See Notes to Condensed Consolidated Financial Statements. -26- 27 BLOOMINGTON BROADCASTING HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS Three-month Periods Ended March 31, 2000 and 1999 (Unaudited)

See Notes to Condensed Consolidated Financial Statements (Unaudited). -27- 28 BLOOMINGTON BROADCASTING HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY Three-month Period Ended March 31, 2000 (Unaudited)

See Notes to Condensed Consolidated Financial Statements (Unaudited). -28- 29 BLOOMINGTON BROADCASTING HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS Three-month Periods Ended March 31, 2000 and 1999 (Unaudited)

See Notes to Condensed Consolidated Financial Statements (Unaudited). -29- 30

See Notes to Condensed Consolidated Financial Statements. -30- 31 BLOOMINGTON BROADCASTING HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Organization and Nature of Operations The Company and its subsidiaries operate AM and FM radio stations in Illinois, Tennessee, Virginia, Michigan, and South Carolina. The stations are subject to regulation by the Federal Communications Commission. The Company and its subsidiaries grant credit on terms that management establishes for individual accounts. The Companies operated under the following business names during 2000 and 1999: Twin-Cities Broadcasting Corp. WJBC (AM), WBNQ (FM) and WBWN (FM) Radio Chattanooga, Inc. WGOW (AM), WSKZ (FM), WGOW (FM) and WOGT (FM) Tri-Cities Radio Corp. WJCW (AM), WQUT (FM), WKIN (AM), WGOC (AM) and WKOS (FM) Michigan Media, Inc. WBBL (AM), WKLQ (FM), WLAV (FM) and WODJ (FM) Radio South Carolina, Inc. WISW (AM), WTCB (FM), WOMG (FM) and WLXC (FM) Note 2. Leveraged Buyout Effective on July 1, 1998, Bloomington Broadcasting Holdings, Inc. (formerly Bloomington Broadcasting Acquisition Corp.) purchased 100% of the stock of Bloomington Broadcasting Corporation. The transaction has been recorded in accordance with the "purchase method" of Accounting Principles Board (APB) Opinion No. 16, Business Combinations, and guidance from the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB). The stock purchase was financed through a combination of bank debt, stockholder debentures and issuance of preferred stock. These financial statements include the financial position of Bloomington Broadcasting Holdings, Inc., Bloomington Broadcasting Corporation, and all subsidiaries. Bloomington Broadcasting Holdings, Inc. was formed in 1998 for the purpose of this acquisition and has no operations other than its ownership of Bloomington Broadcasting Corporation. The acquisition cost of Bloomington Broadcasting Corporation was approximately $64,478,000 of which $61,661,396 was paid in cash. Amortization of goodwill and other intangible assets acquired in this transaction is computed on the straight-line basis over various periods from 15 years to 50 years. -31- 32 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 3. Basis of Presentation The accompanying reviewed condensed consolidated financial statements of Bloomington Broadcasting Holdings, Inc. and its subsidiaries have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal accruals, considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. For further information, refer to the consolidated financial statements and notes thereto for the year ended December 31, 1999. All inter-company balances and transactions are eliminated in consolidation. Note 4. Commitments In July 1999, Michigan Media, Inc. (a subsidiary of the Company) agreed to acquire certain radio station and broadcast assets of WODJ (FM) for $7.5 million. The transaction closed on January 6, 2000. The acquisition was accounted for under the purchase method of accounting. An outstanding frequency swap option is reflected as an asset and liability on the accompanying consolidated balance sheet. On January 10, 2000, Tri-Cities Radio Corp. (a subsidiary of the Company) entered into an asset purchase agreement to acquire the station assets and broadcast rights of WGOC (AM) in Blountville, Tennessee for $850,000. The Company began operating the station on February 1, 2000. Closing took place on May 26, 2000. On January 23, 2000, the Company entered into a definitive agreement to sell 100% of its stock to Citadel Broadcasting Company, a subsidiary of Citadel Communication Corporation, for $175 million. The transaction will be recorded under the purchase method of accounting. The transaction was approved by the Federal Communications Commission (FCC) and closed on June 28, 2000. In connection with the sale of its stock, the Company's obligations to lenders and stockholders were repaid. Accordingly, the obligation to lenders and stockholders is reflected in the current liability section of the consolidated balance sheet as of March 31, 2000. -32- 33 CITADEL BROADCASTING COMPANY UNAUDITED PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma condensed consolidated financial statements reflect the results of operations and balance sheet of Citadel Broadcasting Company after giving effect to: (1) the following completed transactions (collectively, the "Completed Transactions"): o the February 9, 1999 acquisition of WKQZ-FM, WYLZ-FM, WILZ-FM, WIOG-FM, WGER-FM and WSGW-AM in Saginaw/Bay City/Midland, Michigan for the purchase price of approximately $35.0 million (the "Saginaw/Bay City Acquisition"), o the February 17, 1999 acquisition of WHYL-FM and WHYL-AM in Harrisburg/Lebanon/Carlisle, Pennsylvania for the purchase price of approximately $4.5 million (the "Carlisle Acquisition"), o the March 17, 1999 acquisition of Citywide Communications, Inc., which owned KQXL-FM, WEMX-FM, WCAC-FM, WXOK-AM and WIBR-AM serving the Baton Rouge, Louisiana market and KFXZ-FM, KNEK-FM, KRRQ-FM and KNEK-AM serving the Lafayette, Louisiana market for the purchase price of approximately $31.5 million (the "Baton Rouge/Lafayette Acquisition"), o the April 30, 1999 acquisition of KSPZ-FM serving the Colorado Springs, Colorado market in exchange for KKLI-FM in Colorado Springs, the April 30, 1999 acquisition of KVOR-AM and KTWK-AM serving the Colorado Springs, Colorado market and KEYF-FM and KEYF-AM serving the Spokane, Washington market for the purchase price of approximately $10.0 million and the April 30, 1999 termination of a joint sales agreement under which Citadel Communications operated certain other radio stations in Colorado Springs and Spokane (collectively, the "Capstar Transactions"), o the June 30, 1999 acquisition of WSSX-FM, WWWZ-FM, WMGL-FM, WSUY-FM, WNKT-FM, WTMA-AM, WTMZ-AM and WXTC-AM in Charleston, South Carolina, WHWK-FM, WYOS-FM, WAAL-FM, WNBF-AM and WKOP-AM in Binghamton, New York, WMDH-FM and WMDH-AM in Muncie, Indiana and WWKI-FM in Kokomo, Indiana for the purchase price of approximately $77.0 million (the "Charleston/Binghamton/ Muncie/Kokomo Acquisition"), o the August 31, 1999 acquisition of Fuller-Jeffrey Broadcasting Companies, Inc. which owned WOKQ-FM, WPKQ-FM, WXBB-FM and WXBP-FM serving the Portsmouth/Dover/Rochester, New Hampshire market and WBLM-FM, WCYI-FM, WCYY-FM, WHOM-FM, WJBQ-FM and WCLZ-FM serving the Portland, Maine market for the purchase price of approximately $65.3 million, which amount includes the repayment of certain indebtedness of Fuller-Jeffrey Broadcasting and approximately $1.8 million in consulting and noncompetition payments payable over a seven-year period (the "Portsmouth/Dover/ Rochester/Portland Acquisition"), -33- 34 o the November 1, 1999 acquisition of KOOJ-FM in Baton Rouge, Louisiana for the purchase price of approximately $9.5 million (the "KOOJ Acquisition"), o the December 23, 1999 acquisition of Caribou Communications Co., which owned KATT-FM, KYIS-FM, KCYI-FM, KNTL-FM and WWLS-AM in Oklahoma City, Oklahoma, for a purchase price of approximately $60.0 million, which amount includes the repayment of certain indebtedness of Caribou Communications (the "Oklahoma City Acquisition"), o the February 10, 2000 acquisition of WXLO-FM in Worcester, Massachusetts for the purchase price of approximately $21.0 million (the "WXLO Acquisition"), o the March 31, 2000 acquisition of KSMB-FM, KDYS-AM, KVOL-FM and KVOL-AM in Lafayette, Louisiana for the purchase price of approximately $8.5 million (the "Lafayette Acquisition"), o the April 7, 2000 acquisition of WORC-FM in Worcester, Massachusetts for the purchase price of approximately $3.5 million (the "WORC Acquisition"), o the (A) April 15, 2000 acquisition of WGRF-FM, WEDG-FM, WHTT-FM, WMNY-AM and WHLD-AM in Buffalo/Niagara Falls, New York, WAQX-FM, WLTI-FM, WNSS-AM, and WNTQ-FM in Syracuse, New York, WIII-FM and WKRT-AM in Ithaca, New York, WMME-FM, WEZW-AM, WEBB-FM and WTVL-AM in Augusta/Waterville, Maine, WBPW-FM, WOZI-FM and WQHR-FM in Presque Isle, Maine, WCRQ-FM in Dennysville/Calais, Maine, KMYY-FM, KYEA-FM, KZRZ-FM and KTJC-FM in Monroe, Louisiana, KDOK-FM, KTBB-AM, KEES-AM, KYZS-AM and KGLD-AM in Tyler/Longview, Texas, WFPG-AM, WFPG-FM and WPUR-FM in Atlantic City/Cape May, New Jersey, WFHN-FM and WBSM-AM in New Bedford/Fall River, Massachusetts, WQGN-FM, WSUB-AM and WVVE-FM in New London, Connecticut and the right to operate WKOE-FM in Atlantic City/Cape May under a program service and time brokerage agreement and the right to sell advertising in the United States for one FM radio Station in Niagara Falls, Ontario under a joint sales agreement for the aggregate purchase price of approximately $189.0 million, and (B) entry into a local marketing agreement dated June 1, 2000 pursuant to which a third party operates the five Tyler/Longview, Texas stations acquired and has an obligation to purchase such stations (the unaudited pro forma financial information does not give effect to any future sale of the stations pursuant to this agreement) (collectively, the "BPH Transactions"), o the June 19, 2000 acquisition of WWFX-FM in Worcester, Massachusetts for the purchase price of approximately $12.8 million (the "WWFX Acquisition"), o the June 28, 2000 acquisition of Bloomington Broadcasting Holdings, Inc., which owned WKLQ-FM, WBBL-AM, WLAV-FM and WODJ-FM, in Grand Rapids, Michigan, WTCB-FM, WOMG-FM, WLXC-FM and WISW-AM in Columbia, South Carolina, WSKZ-FM, WOGT-FM, WGOW-AM and WGOW-FM in Chattanooga, Tennessee, WQUT-FM, WKOS-FM, WJCW-AM, WKIN-AM and WGOC-AM in Johnson City/Kingsport/Bristol, Tennessee -34- 35 and WJBC-AM, WBNQ-FM and WBWN-FM in Bloomington, Illinois, for the aggregate purchase price of approximately $175.9 million, which amount includes repayment of indebtedness of Bloomington Broadcasting Holdings and a deferred obligation relating to a recent radio station purchase by Bloomington Broadcasting Holdings (the "Bloomington Acquisition"), o the November 9, 1999 sale of KKTT-FM, KEHK-FM and KUGN-AM in Eugene, Oregon, KAKT-FM, KBOY-FM, KCMX-FM, KTMT-FM, KCMX-AM and KTMT-AM in Medford, Oregon, KEYW-FM, KORD-FM, KXRX-FM, KTHT-FM and KFLD-AM in Tri-Cities, Washington, KCTR-FM, KKBR-FM, KBBB-FM, KMHK-FM and KBUL-AM in Billings, Montana, WQKK-AM and WGLU-FM in Johnstown, Pennsylvania and WQWK-FM, WNCL-FM, WRSC-AM and WBLF-AM in State College, Pennsylvania for the sale price of approximately $26.0 million (the "Marathon Disposition"), o the June 1999 public offering by Citadel Broadcasting's parent, Citadel Communications Corporation, of shares of its common stock and the use of net proceeds from that offering (the "1999 Offering"), o the August 1999 redemption of a portion of Citadel Broadcasting's outstanding 13-1/4% Exchangeable Preferred Stock (the "Preferred Redemption"), o the February 2000 public offering by Citadel Communications of shares of its common sock and the use of net proceeds from that offering (the "2000 Offering"); and (2) the following pending transactions (collectively, the "Pending Transactions"): o the (A) pending acquisition of WMMQ-FM, WJIM-FM, WFMK-FM, WITL-FM, WVFN-AM and WJIM-AM in Lansing/East Lansing, Michigan, WHNN-FM and WTCF-FM in Saginaw/Bay City/Midland, Michigan and WFBE-FM in Flint, Michigan for the aggregate purchase price of approximately $120.5 million, consisting of 200,000 shares of Citadel Communications' common stock valued at $50.375 per share, based on the closing share price of the common stock on December 2, 1999, and approximately $110.4 million in cash. However, if the value of the common stock at the time of closing, based on the 20-day average closing sale price per share prior to closing, is less than $45.3375 (90% of the value on December 2, 1999), then no common stock will be issued and the purchase price will be paid entirely in cash (the unaudited pro forma financial information assumes payment of the purchase price in all cash), and (B) pending sale of WSGW-AM, WGER-FM and WTCF-FM in Saginaw/Bay City/Midland, Michigan for the sale price of approximately $16.2 million (collectively, the "Michigan Transactions"), and o the pending acquisition of WKDF-FM and WGFX-FM in Nashville, Tennessee, WIVK-FM, WNOX-AM, WNOX-FM and WSMJ-FM in Knoxville, Tennessee, and WZRR-FM, WYSF-FM, WJOX-AM and WAPI-AM in Birmingham, Alabama as well as the right to operate WOKI-FM in Knoxville under a long-term local marketing agreement for the aggregate purchase price of approximately $300.0 million in cash, -35- 36 subject to various adjustments specified in the acquisition agreement (the "Dick Acquisition"). The unaudited pro forma condensed consolidated financial statements are based on Citadel Broadcasting's historical consolidated financial statements, the financial statements of those entities acquired, or from which assets were acquired, in connection with the Completed Transactions, and the financial statements of those entities from which assets will be acquired in connection with the Pending Transactions. In the opinion of management, all adjustments necessary to fairly present this pro forma information have been made. The interest rate applied to borrowings under, and repayments of, Citadel Broadcasting's credit facility in the pro forma consolidated statements of operations was 7.8%, which represents the interest rate in effect under the then existing credit facility as of January 1, 1999. Pro forma financial information has been adjusted to reflect the following, when applicable: o Prior to the acquisition dates, Citadel Broadcasting operated some of the acquired stations under a joint sales agreement ("JSA") or local marketing agreement ("LMA"). Citadel Broadcasting receives or pays fees for such services accordingly. Net revenue and station operating expenses for stations operated under JSAs are included to reflect ownership of the stations as of January 1, 1999. Net revenue and station operating expenses for stations operated under LMAs are included in Citadel Broadcasting's historical consolidated financial statements. For those stations operated under JSAs and LMAs and subsequently acquired, associated fees and redundant expenses were eliminated and estimated occupancy costs were included to adjust the results of the operations to reflect ownership of the stations as of January 1, 1999. o Elimination of revenue and operating expenses from the entities acquired, or from which assets were acquired, in connection with the Completed Transactions, and the entities from which assets will be acquired in connection with the Pending Transactions, which would not have been incurred if the acquisition had occurred on January 1, 1999. The eliminated items were deemed redundant and therefore are not reflected as of January 1, 1999. Depreciation and amortization for the acquisitions are based upon preliminary allocations of the purchase price to property and equipment and intangible assets. Actual depreciation and amortization may differ depending on the final allocation of the purchase price. However, management does not believe these differences will be material. For pro forma purposes, Citadel Broadcasting's balance sheet as of March 31, 2000 has been adjusted to give effect to the following transactions as if each had occurred on March 31, 2000 (collectively, the "Recent 2000 Transactions"): (1) the WORC Acquisition, (2) the BPH Transactions, (3) the WWFX Acquisition, -36- 37 (4) the Bloomington Acquisition, and (5) the Pending Transactions. The unaudited pro forma information is presented for illustrative purposes only and does not indicate the operating results or financial position that would have occurred if the transactions described above had been completed on the dates indicated, nor is it indicative of future operating results or financial position if the Pending Transactions described above are completed. Citadel Broadcasting cannot predict whether the completion of the Pending Transactions will conform to the assumptions used in the preparation of the unaudited pro forma condensed consolidated financial statements. Additionally, completion of each of the Pending Transactions is subject to certain conditions. Although Citadel Broadcasting believes these closing conditions are generally customary for transactions of this type, there can be no assurance that such conditions will be satisfied. The initial grant from the FCC for the WWFX Acquisition has not yet become a final order. Until an order becomes final, third parties may file a request for reconsideration or judicial review or the FCC may reconsider the grant on its own motion. Such action could expose Citadel Broadcasting to a modification or set aside of the initial approval. There can be no assurance that a modification or set aside will not occur. The total cash required to fund the acquisitions that are included in the Pending Transactions is expected to be approximately $420.5 million. The remaining borrowing capacity under Citadel Broadcasting's committed credit facility, together with working capital funds and the approximately $16.2 million of funds from the anticipated sale of three radio stations will not be sufficient to fund such pending acquisitions. Citadel Broadcasting expects that additional funds of approximately $180.0 million will be required to complete these transactions. Citadel Broadcasting's credit facility allows Citadel Broadcasting to request up to $300.0 million in additional term loans, which may be made at the sole discretion of the lenders. In addition, Citadel Broadcasting may need to obtain an amendment to, or a waiver under, its credit facility for certain financial ratios due to the additional indebtedness. Citadel Broadcasting believes that the lenders under the credit facility will provide the additional term loans to complete the Pending Transactions and will waive or amend the credit facility with respect to certain financial ratios. However, there can be no assurance that this will be the case. In addition, Citadel Communications or Citadel Broadcasting may consider other financing alternatives, such as selling additional equity or debt securities. Again, there can be no assurance that Citadel Communications or Citadel Broadcasting could obtain such financing on favorable terms or at all. The unaudited pro forma financial information assumes that the lenders under the credit facility provide the additional term loans to complete the Pending Transactions and that they waive or amend the credit facility with respect to certain financial ratios. -37- 38 CITADEL BROADCASTING COMPANY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET MARCH 31, 2000 (DOLLARS IN THOUSANDS)

(1) Represents the net effect of the WORC Acquisition, the BPH Transactions, the WWFX Acquisition and the Bloomington Acquisition, as if each transaction had taken place on March 31, 2000. (2) Represents the net effect of the Pending Transactions as if each transaction had taken place on March 31, 2000. -38- 39 CITADEL BROADCASTING COMPANY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 (DOLLARS IN THOUSANDS)

(1) Represents the net effect of the Completed Transactions that were consummated after January 1, 2000 as if each transaction had taken place on January 1, 1999. Dollars in the table below are shown in thousands.

-39- 40

(2) Represents the net effect of the Pending Transactions as if each transaction had taken place on January 1, 1999. Dollars in the table below are shown in thousands.

-40- 41 CITADEL BROADCASTING COMPANY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 (DOLLARS IN THOUSANDS)

(1) Represents the net effect of the Completed Transactions as if each transaction had taken place on January 1, 1999. Dollars in the table below are shown in thousands. -41- 42

-42- 43

-43- 44 (2) Represents the net effect of the Pending Transactions as if each transaction had taken place on January 1, 1999. Dollars in the table below are shown in thousands.

-44- 45 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CITADEL BROADCASTING COMPANY Date: July 13, 2000 By: /s/ Lawrence R. Wilson ------------- ------------------------------- Lawrence R. Wilson Chairman and Chief Executive Officer 46 EXHIBIT INDEX 2.1 Stock Purchase Agreement dated January 23, 2000 by and among Bloomington Broadcasting Holdings, Inc., the stockholders of Bloomington Broadcasting Holdings, Inc. and Citadel Broadcasting Company (incorporated by reference to Exhibit 2.7 to Citadel Communications Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 1999). 23.1 Consent of Dunbar, Breitweiser & Company, LLP.

CITADEL BROADCASTING CO 8-K