8-K 1 j8440301e8-k.txt CITADEL BROADCASTING COMPANY FORM 8-K 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) October 2, 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 "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 October 2, 2000, Citadel Broadcasting Company completed its acquisition from Dick Broadcasting Company, Inc. of Tennessee and related entities of (i) three FM radio stations and one AM radio station serving Knoxville, Tennessee, two FM radio stations serving Nashville, Tennessee, and three FM and two AM radio stations serving Birmingham, Alabama, and (ii) related real estate used in connection with the operation of the stations. The aggregate purchase price was approximately $288.6 million in cash. The asset purchase agreement governing the acquisition provides for future purchase price adjustments in favor of Citadel Broadcasting if the stations do not meet certain financial criteria. The purchase price was paid with 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 3 the lenders identified in Exhibit 4.1 to this report. A description of the credit facility is included in Item 5 of this report. Citadel Broadcasting began operating the acquired radio stations on October 1, 2000, and intends to continue operating the stations. Certain financial information of certain of the selling entities and pro forma financial information of Citadel Broadcasting Company is included in Item 7 of this report. ITEM 5. OTHER EVENTS Amended and Restated Credit Facility On October 2, 2000, Citadel Broadcasting and its parent, Citadel Communications Corporation, entered into a credit facility (the "Credit Facility") provided pursuant to a Second Amended and Restated Credit Agreement of the same date, by and among Citadel Broadcasting and Citadel Communications, Credit Suisse First Boston, as Lead Arranger, Administrative Agent and Collateral Agent, and the lenders named therein (the "Credit Agreement"). The Credit Agreement provides for the making to Citadel Broadcasting, by the lenders of (a) term loans (the "Tranche A Term Loans") at any time prior to December 15, 2000 in an aggregate principal amount not in excess of $325.0 million, (b) a term loan (the "Tranche B Term Loan" and together with the Tranche A Term Loans, the "Term Loan Facility") in the principal amount of $200.0 million, and (c) revolving loans at any time and from time to time prior to March 31, 2006, in an aggregate principal amount at any one time outstanding not in excess of $225.0 million (the "Revolving Credit Facility"). Of the $225.0 million which is available in the form of revolving loans under the Revolving Credit Facility, up to $50.0 million of the Revolving Credit Facility may be made available in the form of letters of credit. In addition, Citadel Broadcasting may request up to $150.0 million in additional loans, which loans may be made at the sole discretion of the lenders. Of such additional $150.0 million amount, at the request of Citadel Broadcasting, up to $100.0 million may be in the form of an increase in the $225.0 million revolving credit commitment. The lenders are under no obligation whatsoever to make such additional $150.0 million available, whether in the form of term loans, revolving loans or otherwise. As of October 2, 2000, $249.0 million had been borrowed as Tranche A Term Loans, $200.0 million had been borrowed as a Tranche B Term Loan and $220.0 million had been borrowed under the Revolving Credit Facility. No letters of credit were issued and outstanding. Term Loans. Additional draws may be made under the Tranche A Term Loans to finance permitted acquisitions and to pay related fees and expenses. The maturity date for the Tranche A Term Loans is December 31, 2006 (subject to extension to December 31, 2007). The amount of any Tranche A Term Loans outstanding on December 17, 2002 must be repaid in varying quarterly installments ranging from 3.75% of the amount on March 31, 2003 to 6.25% of the amount on December 31, 2007 (if maturity is extended to such date). 4 The maturity date of the Tranche B Term Loan is March 31, 2007 (subject to extension to June 30, 2008). The Tranche B Term Loan must be repaid in quarterly installments ranging from .25% of the amount from March 31, 2003 to March 31, 2008 and 94.75% of the amount on June 30, 2008 (if maturity is extended to such date). In addition, mandatory prepayments must be made under the Term Loan Facility upon the happening of certain events. All required prepayments shall be applied as follows: o first, pro rata between the then outstanding Tranche A Term Loans and the Tranche B Term Loan against the remaining scheduled installments of principal due in respect of such terms loans until all such principal is paid in full, and o thereafter, to permanently reduce the revolving credit commitment and, if necessary, prepay revolving loans and/or cash collateralize letters of credit to the extent that letter of credit exposure would exceed the total revolving credit commitment after giving effect to any such reduction. However, for so long as the Tranche B Term Loan is outstanding, lenders with any portion of such outstanding loan may decline to accept any mandatory prepayment of such loan and cause all or a portion of the prepayment to instead be allocated to the then-outstanding Tranche A Term Loans to be applied pro rata against the remaining scheduled installments of principal due in respect thereof. Revolving Loans. Additional draws may be made under the Revolving Credit Facility, subject to the satisfaction of certain conditions, for general corporate purposes, including for working capital, capital expenditures, and to finance permitted acquisitions. The Revolving Credit Facility must be paid in full on or before December 31, 2006 (subject to extension to December 31, 2007). In addition, the mandatory prepayments must be made under the Revolving Credit Facility upon the happening of certain events. All required prepayments shall be applied as discussed above. Voluntary Prepayments. Voluntary prepayments of the Credit Facility are permitted without premium or penalty, subject to minimum notice requirements and minimum prepayment requirements and the payment of any applicable LIBOR breakage fees. At Citadel Broadcasting's option, any portion of the revolving loans which has been prepaid or repaid may be reborrowed, and the maximum amount of the revolving credit commitment may be permanently reduced. Letter of Credit Facility. The letter of credit facility, which is a subfacility of the Revolving Credit Facility, provides for the issuance of letters of credit to be used by Citadel Broadcasting as security for the obligations of Citadel Broadcasting under agreements entered into in connection with certain radio station acquisitions and for any other purposes related to the business of Citadel Broadcasting. The letter of credit facility requires the payment by Citadel Broadcasting of a fronting fee of 1/8 of 1% on the face amount of each outstanding letter of credit. Such fronting fee is payable quarterly in arrears to the bank issuing the letter of credit. Citadel Broadcasting is also required to pay to each revolving credit lender (through the Administrative Agent), on the last day of each quarter, a letter of credit participation fee equal to such lender's pro rata portion of the outstanding letters of credit multiplied by the then applicable margin for 5 Adjusted LIBO Rate (as defined below) advances under the Revolving Credit Facility. Standard issuance and drawing fees are also payable to the bank or banks issuing the letters of credit. Interest Rates. The Credit Facility bears interest at a rate equal to the applicable margin plus either (a) the greater of (i) the per annum rate of interest publicly announced from time to time by Credit Suisse First Boston in New York, New York, as its prime rate of interest (the "Prime Rate") and which may be changed automatically without notice, as the Prime Rate changes, or (ii) the federal funds effective rate as in effect from time to time plus 1/2 of 1%, and which may be changed automatically without notice, as the federal funds effective rate changes (with the greater of (i) or (ii) being referred to herein as the "Alternate Base Rate"), or (b) at the written election of Citadel Broadcasting, at a rate determined by the Administrative Agent to be the Adjusted LIBO Rate for the respective interest period. The LIBO Rate is determined by reference to the British Bankers' Association Interest Settlement Rates for deposits in dollars (as set forth by the Bloomberg Information Service or an appropriate successor) for a period equal to the interest period selected by Citadel Broadcasting. The Adjusted LIBO Rate is the product of (i) the LIBO Rate and (ii) a fraction, the numerator of which is 1.00 and the denominator of which is 1.00 minus the aggregate of the maximum reserve percentages established by the Federal Reserve Board or other banking authority to which the Administrative Agent or any lender is subject, in effect from time to time. The applicable margin for the Tranche B Term Loan is 2.00% or 3.00%, respectively, for Alternative Base Rate and Adjusted LIBO Rate. The applicable margins for the Tranche A Term Loans and the revolving loans are expected to range between 0.00% and 1.75% for the Alternate Base Rate and 0.75% to 2.75% for the Adjusted LIBO Rate, depending on the consolidated leverage ratio from time to time. Except as otherwise provided with respect to voluntary and mandatory prepayments, interest on loans bearing interest at the Alternate Base Rate plus the applicable margin, will be payable quarterly in arrears on the last business day of each calendar quarter, and interest on loans bearing interest at the Adjusted LIBO Rate plus the applicable margin, will be payable on the last day of the interest period applicable to such loan (unless the interest period is greater than 3 months, in which event interest shall be payable at the end of each successive 3 month period during which such interest period is in effect). The interest rate after a payment default shall, in the case of a default in the payment of principal, be 2% in excess of the otherwise applicable interest rate, and, in the case of any other payment default, be 2% in excess of the Alternate Base Rate plus the applicable margin at such time. Certain Other Fees. Citadel Broadcasting is required to pay to each lender (through the Administrative Agent), on the last business day of each calendar quarter, a commitment fee equal to the applicable percentage per annum on the daily unused amount of the commitments of such lender during the preceding quarter. The applicable percentage will vary from 0.25% to 0.5% depending on the consolidated leverage ratio. Security and Guarantee. Subject to permitted liens, the Credit Facility is secured by: (a) a first priority pledge on all of Citadel Broadcasting's capital stock other than Citadel Broadcasting's exchangeable preferred stock, (b) a first priority security interest in all the existing and after-acquired property of Citadel Communications and Citadel Broadcasting, including, without limitation, accounts, machinery, equipment, inventory, real estate, general intangibles and investment property, and 6 (c) all proceeds of the foregoing. The Credit Facility is also guaranteed by Citadel Communications. Hedging Obligations. The Credit Facility also requires that no less than 50% of Citadel Broadcasting's long-term indebtedness be subject to fixed interest rates. If Citadel Broadcasting's total variable debt under the Credit Facility exceeds this 50% threshold, Citadel Broadcasting is required to enter into a hedging contract that will convert a portion of the variable rate into a fixed rate. On June 30, 2000 and August 23, 2000, Citadel Broadcasting entered into one-year interest rate swap transactions in notional amounts of $25.0 million and $40.0 million, respectively. The Company will pay a fixed rate of 7.055% and 6.855%, respectively, and will receive a variable rate based on LIBOR. As a result of the borrowings made to complete the acquisition reported in Item 2 of this report, Citadel Broadcasting expects to enter into one or more additional interest rate swap transactions in the aggregate notional amount of approximately $140.0 million. Change of Control. The Credit Facility provides that a change in control or ownership will be an event of default under the Credit Facility. A change in control or ownership shall occur if: (a) any person or group of persons acting in concert shall own more than 35% of the common stock of Citadel Communications; (b) a majority of the seats (other than vacant seats) on the board of directors of Citadel Communications shall at any time be occupied by persons who were neither (i) nominated by the board of directors of Citadel Communications nor (ii) appointed by directors so nominated; (c) any change in control (or similar event, however denominated) with respect to Citadel Communications or Citadel Broadcasting shall occur under and as defined in any indenture or agreement in respect of material indebtedness; or (d) Citadel Communications shall cease to own, directly or indirectly, 100% of the issuing and outstanding voting equity interests of Citadel Broadcasting. Covenants. The Credit Facility contains customary restrictive covenants, which, among other things, and with exceptions, limit the ability of Citadel Broadcasting and Citadel Communications to incur additional indebtedness and liens, enter into transactions with affiliates, make acquisitions other than permitted acquisitions, pay dividends, redeem or repurchase capital stock, enter into certain sale and leaseback transactions, consolidate, merge or effect asset sales, issue additional equity, make capital expenditures, make investments, loans or prepayments or change the nature of their business. Citadel Broadcasting and Citadel Communications are also required to satisfy financial covenants which will require Citadel Communications and Citadel Broadcasting to maintain specified financial ratios and to comply with financial tests, including ratios with respect to maximum leverage, minimum interest coverage and minimum fixed charge coverage. 7 Permitted Acquisitions. A permitted acquisition under the Credit Facility is an acquisition of (a) a radio station or radio stations (each a "Station"), (b) any business which is ancillary to the ownership or operation of a Station, or (c) any business that is an internet service provider or ancillary to the business of an internet service provider (provided that the aggregate consideration for the acquisition of internet service providers does not exceed $10.0 million). In addition, a permitted acquisition is subject to pro forma compliance with the leverage, interest coverage and fixed charge coverage ratios set forth below. All acquired assets will be subject to a security interest in favor of the Administrative Agent for the benefit of the lenders. Maximum Leverage Test. The maximum leverage test requires that Citadel Broadcasting and Citadel Communications not permit the ratio of (a) their total debt as of the last day of the most recently ended quarter to (b) their consolidated EBITDA, as adjusted for permitted acquisitions and dispositions, for the rolling four-fiscal-quarter period ending as of the last day of such quarter, to be greater than the applicable ratio on that date. The applicable ratios range from 7.25x through September 30, 2001 to 4.0x after March 31, 2004. Minimum Interest Coverage Test. The minimum interest coverage test requires that Citadel Broadcasting and Citadel Communications not permit the ratio of (a) their consolidated EBITDA for any rolling four-fiscal-quarter period to (b) their consolidated interest expense for such period, to be less than the applicable ratio on that date. The applicable ratios range from 1.5x through June 30, 2002 to 2.5x after December 31, 2003. Minimum Fixed Charges Coverage Test. The minimum fixed charges coverage test requires that Citadel Broadcasting and Citadel Communications not permit the ratio of (a) their consolidated EBITDA for any rolling four-fiscal-quarter period to (b) their fixed charges for such period to be less than 1.25 to 1.00. Events of Default. The Credit Facility contains customary events of default. Upon the occurrence of an event of default, with certain limitations, Citadel Broadcasting's and Citadel Communications' obligations under the Credit Facility which are at that time outstanding may become accelerated. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements. The following audited combined financial statements of Dick Broadcasting Company, Inc. of Tennessee and Subsidiaries, Dick Broadcasting Company, Inc. of Nashville, and Dick Radio Alabama, Inc. are included in this report: Independent Auditors' Report Combined Balance Sheet as of December 31, 1999 Combined Statement of Income for the year ended December 31, 1999 Combined Statement of Stockholders' Equity for the year ended December 31, 1999 8 Combined Statement of Cash Flows for the year ended December 31, 1999 Notes to Combined Financial Statements The following unaudited consolidated financial statements of Dick Broadcasting Company, Inc. of Tennessee and Subsidiaries are included in this report: Consolidated Balance Sheets as of June 30, 2000 and 1999 Consolidated Statements of Income (Loss) for the six months ended June 30, 2000 and 1999 Consolidated Statements of Stockholders' Equity for the six months ended June 30, 2000 and 1999 Consolidated Statements of Cash Flows for the six months ended June 30, 2000 and 1999 Notes to Unaudited Consolidated Financial Statements (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 June 30, 2000 Unaudited Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 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 Asset Purchase Agreement effective as of April 30, 2000 among Dick Broadcasting Company, Inc. of Tennessee, Dick Broadcasting Company, Inc. of Alabama, Dick Broadcasting Company, Inc. of Nashville, Dick Radio Alabama, Inc., DFT Realty, DFT Realty II, LLC, James Allen Dick, Sr., James Allen Dick, Jr., Charles Arthur Dick, Emily Dick McAlister, Jeannette Dick Hundley and Citadel Broadcasting Company (incorporated by reference to Exhibit 2.1 to Citadel Communications Corporation's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2000). 2.2 First Amendment to Asset Purchase Agreement dated September 30, 2000 among Dick Broadcasting Company, Inc. of Tennessee, Dick Broadcasting Company, Inc. of Alabama, DFT Realty, DFT Realty II, LLC, James Allen Dick, Sr., James Allen Dick, Jr., Charles Arthur Dick, Emily Dick McAlister, Jeannette Dick Hundley and Citadel Broadcasting Company (incorporated by reference to Exhibit 2.2 to Citadel Communications Corporation's Current Report on Form 8-K filed on October 17, 2000). 4.1 Second Amended and Restated Credit Agreement dated as of October 2, 2000 among Citadel Broadcasting Company, Citadel Communications Corporation, Credit Suisse First Boston, as Lead Arranger, Administrative Agent and Collateral Agent, FINOVA Capital Corporation, as Syndication 9 Agent, First Union National Bank and Fleet National Bank, as Documentation Agents, and the lenders named therein. 23.1 Consent of Hines and Company, P.C. 10 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. DECEMBER 31, 1999 WITH INDEPENDENT AUDITORS' REPORT 11 HINES AND COMPANY, P.C. Certified Public Accountants 405 Agnes Road Post Office Box 11447 Knoxville, Tennessee 37939 Phone: (865) 584-3300 Fax: (865) 588-5757 Jenny L. Hines, CPA Claudia P. Depew, CPA Janna S. Hubbs, CPA Karen N. Ellis, CPA Tracy L. Wright, CPA -------------------------------------------------------------------------------- INDEPENDENT AUDITORS' REPORT The Board of Directors and Stockholders Dick Broadcasting Company, Inc. of Tennessee Dick Broadcasting Company, Inc. of Nashville Dick Radio Alabama, Inc. We have audited the accompanying combined balance sheets of Dick Broadcasting Company, Inc. of Tennessee and subsidiaries, Dick Broadcasting Company, Inc. of Nashville, and Dick Radio Alabama, Inc. as of December 31, 1999 and the related combined statements of income, stockholders' equity, and cash flows for the year then ended. These combined financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these combined financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Dick Broadcasting Company, Inc. of Tennessee and subsidiaries, Dick Broadcasting Company, Inc. of Nashville, and Dick Radio Alabama, Inc. at 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/ Hines and Company, P.C. March 10, 2000 12 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. COMBINED BALANCE SHEET DECEMBER 31, 1999

See accompanying notes to financial statements. 13

See accompanying notes to financial statements. 14 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. COMBINED STATEMENT OF INCOME YEAR ENDED DECEMBER 31, 1999

See accompanying notes to financial statements. 15 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. COMBINED STATEMENT OF STOCKHOLDERS' EQUITY YEAR ENDED DECEMBER 31, 1999

See accompanying notes to financial statements. 16 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. COMBINED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 1999

See accompanying notes to financial statements. 17 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. COMBINED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 1999

See accompanying notes to financial statements. 18 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Activity Dick Broadcasting Company's operations are primarily related to radio broadcasting. The Company has operations in Tennessee, North Carolina and Alabama. Credit is extended to customers in the normal course of business. Intangible Assets Federal Communications Commission (FCC) licenses are being amortized over a range of fifteen (15) to forty (40) years using the straight-line method. Other intangible assets are amortized over the life of the underlying agreement using the straight-line method. Trade-Out Transactions The Company enters into agreements in which advertising time is traded for various products or services. Trade-out transactions are valued at the normal advertising rates in effect. The company records both an asset and liability at the time of the transaction. Income and expense are recognized when advertisements are aired or when goods and services are received. Income Taxes Deferred income taxes have been provided under the liability method. Deferred tax assets and liabilities are determined based upon the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities, as measured by the current enacted tax rates. Deferred tax expense is the result of changes in the deferred tax asset and liability. Dick Broadcasting Company, Inc. of Tennessee and subsidiaries (with the exception of Dick Broadcasting Company, Inc. of Alabama), Dick Broadcasting Company, Inc. of Nashville, and Dick Radio Alabama, Inc. have elected to be taxed under the provisions of subchapter "S" of the Internal Revenue Code and comparable state regulations. Under these provisions, the corporations do not pay federal income taxes on their taxable income (nor are they allowed a net operating loss carryback or carryover). Instead, the stockholders report their proportionate share of each companies' taxable income (loss) and tax credits on their personal income tax returns. The company has committed to distribute dividends to the shareholders at least sufficient to reimburse them for income taxes incurred as a result of the subchapter "S" election. 19 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Compensation Plan The Company previously had a deferred compensation plan. Under this plan an annual provision, based on pro rata shares of the net increase in stockholders' investment, was allocated to certain officers of the Company. Beginning January 1, 1998, there were no additional accruals of payment obligations under the old plan. Interest of 7% per annum will be credited on certain deferred balances accumulated prior to January 1, 1998, by the Company. This interest will either be paid out within 90 days of the end of each fiscal year or added to the deferred balance and compounded annually at the option of each officer. In the event of termination of the officer's employment, the deferred balance, together with any interest earned but not previously paid out, is to be paid to the officer, in a lump sum within 90 days. If the termination is not due to death or disability, the Company may elect to pay the deferred obligation in monthly installments of principal and interest over a period not to exceed three years. Principles of Combination The accompanying combined financial statements present the combination of the consolidated financial statements of Dick Broadcasting Company, Inc. of Tennessee and subsidiaries and the financial statements of its affiliates, Dick Broadcasting Company, Inc. of Nashville and Dick Radio Alabama, Inc., all of which are under common control. Material intercompany transactions and balances have been eliminated in combination. Dick Broadcasting Company, Inc. of Tennessee's approximate percentage of ownership in its subsidiaries are as follows:

20 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Related Companies Arthur Dick Construction Company, a related corporation with a common shareholder, has operations in North Carolina. Eagle Syndication, a related limited liability company with common management, has operations in North Carolina. Dick Family Realty I and II, related limited liability companies with common directors, have operations in Tennessee, Alabama and North Carolina. Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line and declining balance methods. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to income as incurred; significant renewals and betterments are capitalized. Cash Equivalents For purposes of the statements of cash flows, the Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates. Advertising Costs The Company expenses advertising costs as incurred. 21 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 2. NOTES RECEIVABLE

22 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 2. NOTES RECEIVABLE (CONTINUED)

23 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 2. NOTES RECEIVABLE (CONTINUED)

24 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 2. NOTES RECEIVABLE (CONTINUED)

3. INVESTMENTS Investments held by the Company as of December 31, 1999 consist of a 50% interest in one partnership and a joint venture The Company's investments are accounted for on the equity method

25 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 3. INVESTMENTS (CONTINUED) A summary of the changes in the recorded amount of each investment for the year ended December 31, 1999 follows:

26 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 3. INVESTMENTS (CONTINUED)

4. PROPERTY AND EQUIPMENT Property and equipment consist of the following:

Depreciation expense amounted to $1,610,348 and $1,940,864 in 1999. Amortization expense for the capital leases amounted to $369,815 in 1999. 27 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 5. DEBT Long-term Debt:

Maturities of long-term debt in each of the next five years are as follows: 2000 $ 3,583,671 2001 3,589,243 2002 3,595,187 2003 19,601,527 2004 108,288 Thereafter 370,090 ------------ $30,848,006 ===========

28 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 5. DEBT (CONTINUED) Notes payable - stockholders:

29 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 6. CAPITAL LEASE OBLIGATIONS Long term leases for operations have been contracted with related parties. Those leases have been capitalized as follows:

The present value of future minimum lease payments under the capital leases mature as follows: 2000 $ 287,064 2001 309,350 2002 333,366 2003 359,245 2004 387,135 Thereafter 2,802,750 ---------- $4,478,910 ==========

30 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 7. LINE OF CREDIT The Company has a revolving line of credit with a bank that is available until January 1, 2004 in the amount of $1,000,000. No draw exists on this note at December 31, 1999. 8. COMMON STOCK A summary of common stock follows:

Common stock has no par value. One half of Dick Broadcasting Co., Inc. of Tennessee's stock authorized, issued and outstanding, is nonvoting. 9. PENSION PLAN The Company has established a qualified contributory profit sharing plan which covers all full-time employees. On May 1, 1991 the Company amended the plan to allow 401(K) contributions. The contributions are at the discretion of the Board of Directors and were $126,111 for 1999. 31 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 10. INCOME TAXES Effective January 1, 1997, the Company has elected under subchapter S regulations whereby all income is taxed to the shareholders with the exception of Dick Broadcasting Company, Inc. of Alabama which remained a C corporation The provision for income taxes for Dick Broadcasting, Inc. of Tennessee and its subsidiaries consists of the following:

32 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 10. INCOME TAXES (CONTINUED) The components of the deferred tax assets and liabilities are as follows:

33 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 11. RELATED PARTY TRANSACTIONS In the ordinary course of conducting business, the Company has financial transactions with related parties. Balances or transaction amounts for such parties are presented in the numerous statements under the following captions:

34 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES DICK BROADCASTING COMPANY, INC. OF NASHVILLE DICK RADIO ALABAMA, INC. NOTES TO COMBINED FINANCIAL STATEMENTS 12. CONCENTRATION OF CREDIT RISK Cash The company maintains its cash in several banking institutions. The amount on deposit with the institutions exceeds the $100,000 federally insured limit. The carrying amount and bank balance are categorized as follows:

Accounts & Notes Receivable There are significant related party notes receivable and payable. The Company's ability to collect the outstanding notes is dependent on distributions of income to the stockholders. See note 11. 13. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company has a number of financial instruments, none of which are held for trading purposes. The Company estimates that the fair value of all financial instruments at December 31, 1999, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying balance sheet. 14. SUBSEQUENT EVENT On May 9, 2000 the Company signed an asset purchase agreement with The Citadel Communications Corporation to sell Dick Broadcasting of Tennessee Inc., Dick Broadcasting of Nashville Inc., Dick Broadcasting of Alabama Inc. and Dick Radio of Alabama Inc. The projected sale date is October 1, 2000. 15. UNREVIEWED PRO FORMA BALANCE SHEET AND SCHEDULE OF INCOME FROM OPERATIONS The Asset Purchase Agreement (described in Note 16) specifically excludes: (1) all cash, cash equivalents, or similar type investments, (2) accounts receivable, (3) assets not used in connection with the operations of the stations, (4) any and all claims with respect to transactions occurring or arising prior to the closing date, including, without limitation, notes receivable, intercompany debt, debts or other obligations due from stockholders and claims for refund of taxes for periods prior to the closing date, and (5) the assets of Dick Broadcasting Company, Inc. of North Carolina. Income and expense specifically related to the lease management arrangement with WOKI in Knoxville have been excluded from the Schedule of Income from Operations.

35 17. UNAUDITED PRO FORMA CONDENSED BALANCE SHEET AND SCHEDULE OF INCOME FROM OPERATIONS (CONTINUED)

36 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 37 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2000 AND 1999 (UNAUDITED)

See accompanying notes. 38

See accompanying notes. 39 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (LOSS) SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (UNAUDITED)

See accompanying notes. 40 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (UNAUDITED)

See accompanying notes. 41 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (UNAUDITED)

See accompanying notes. 42

NONCASH INVESTING AND FINANCING ACTIVITIES: During 2000, the Company sold a parcel of land by exchanging title to the land for a stockholder note payable in the amount of $160,000. 43 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations Dick Broadcasting Company's operations are primarily related to radio broadcasting in Tennessee, North Carolina, and Alabama. The Company has two wholly-owned subsidiaries: Dick Broadcasting Company, Inc. of North Carolina and Dick Broadcasting Company, Inc. of Alabama. Effective May 1, 2000, Dick Broadcasting Company, Inc. of Tennessee merged with Dick Broadcasting Company, Inc. of Nashville and Dick Radio Alabama, Inc., with Dick Broadcasting Company, Inc. of Tennessee being the surviving company. The historical costs of the separate companies assets and liabilities were combined in the merger. The Company has reported its operations for the six months ended June 30, 2000 and the six months ended June 30, 1999 as if the merger occurred as of December 31, 1999. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, after elimination of all intercompany accounts and transactions. Intangible Assets Federal Communications Commission (FCC) licenses are being amortized over a range of fifteen (15) to forty (40) years using the straight-line method. Other intangible assets are amortized over the life of the underlying agreement using the straight-line method. Trade-Out Transactions The Company enters into agreements in which advertising time is traded for various products or services. Trade-out transactions are valued at the normal advertising rates in effect. The company records both an asset and liability at the time of the transaction. Income and expense are recognized when advertisements are aired or when goods and services are received. Income Taxes Deferred income taxes have been provided under the liability method. Deferred tax assets and liabilities are determined based upon the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities, as measured by the current enacted tax rates. Deferred tax expense is the result of changes in the deferred tax asset and liability. 44 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income Taxes (continued) Dick Broadcasting Company, Inc. of Tennessee and subsidiaries (with the exception of Dick Broadcasting Company, Inc. of Alabama), Dick Broadcasting Company, Inc. of Nashville, and Dick Radio Alabama, Inc. have elected to be taxed under the provisions of subchapter "S" of the Internal Revenue Code and comparable state regulations. Under these provisions, the corporations do not pay federal income taxes on their taxable income (nor are they allowed a net operating loss carryback or carryover). Instead, the stockholders report their proportionate share of each companies' taxable income (loss) and tax credits on their personal income tax returns. The company has committed to distribute dividends to the shareholders at least sufficient to reimburse them for income taxes incurred as a result of the subchapter "S" election. Deferred Compensation Plan The Company previously had a deferred compensation plan. Under this plan an annual provision, based on pro rata shares of the net increase in stockholders' investment, was allocated to certain officers of the Company. Beginning January 1, 1998, there are to be no additional accruals of payment obligations under the old plan. Interest of 7% per annum will be credited on certain deferred balances accumulated prior to January 1, 1998, by the Company. This interest will either be paid out within 90 days of the end of each fiscal year or added to the deferred balance and compounded annually at the option of each officer. In the event of termination of the officer's employment, the deferred balance, together with any interest earned but not previously paid out, is to be paid to the officer, in a lump sum within 90 days. If the termination is not due to death or disability, the Company may elect to pay the deferred obligation in monthly installments of principal and interest over a period not to exceed three years. Related Companies Arthur Dick Construction Company, a related corporation with a common shareholder, has operations in North Carolina. Eagle Syndication, a related limited liability company with common management, has operations in North Carolina. Dick Family Realty I and II, related limited liability companies with common directors, have operations in Tennessee, Alabama and North Carolina. 45 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line and declining balance methods. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to income as incurred; significant renewals and betterments are capitalized. Cash Equivalents For purposes of the statements of cash flows, the Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates. Advertising Costs The Company expenses advertising costs as incurred. 2. NOTES RECEIVABLE Stockholders: Notes receivable from stockholders consisted of the following at June 30, 2000 and June 30, 1999:

46 DICK BROADCASTING COMPANY, INC. OF TENNESSEE SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 2. NOTES RECEIVABLE - (CONTINUED)

47 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 3. INVESTMENTS Investments held by the Company as of June 30, 2000 and 1999 consist of a 50% interest in one partnership and a joint venture. The Company's investments are accounted for on the equity method.

A summary of the changes in the recorded amount of each investment for the six months ended June 30, 2000 and 1999 follows:

48 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 4. PROPERTY AND EQUIPMENT Property and equipment consist of the following at June 30, 2000 and 1999:

For the six months ending June 30, 2000 and 1999, the provision for depreciation amounted to $882,687 and $823,768, respectively, and the amortization provision for capital leases amounted $184,908 and $184,906,respectively. 5. DEBT

Maturities of long-term debt in each of the next five years are as follows:

49 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 5. DEBT - (CONTINUED) Notes payable - stockholders:

6. CAPITAL LEASE OBLIGATIONS Long term leases for operations have been contracted with related parties. Those leases have been capitalized as follows:

50 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 6. CAPITAL LEASE OBLIGATIONS (CONTINUED) At June 30, 2000, the present value of future minimum lease payments under the capital leases mature as follows:

7. LINE OF CREDIT The Company has a revolving line of credit with a bank that is available until January 1, 2004 in the amount of $1,000,000. No draw exists on this note at June 30, 2000. 8. COMMON STOCK Details of the Company's common stock follow: Total value $3,184,694 Authorized shares, no par value 80,000 Shares issued and outstanding 20,646

9. PENSION PLAN The Company has established a qualified contributory profit sharing plan which covers all full-time employees. On May 1, 1991, the Company amended the plan to allow 401(K) contributions. The contributions are at the discretion of the Board of Directors and are made at the end of the year. 10. INCOME TAXES Effective January 1, 1997, the Company has elected under subchapter S regulations whereby all income is taxed to the shareholders with the exception of Dick Broadcasting Company, Inc. of Alabama which remained a C corporation The provision for income taxes for Dick Broadcasting, Inc. of Tennessee and its subsidiaries consists of the following: 51 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 10. INCOME TAXES - (CONTINUED)

The components of the deferred tax assets and liabilities are as follows:

11. RELATED PARTY TRANSACTIONS In the ordinary course of conducting business, the Company has financial transactions with related parties. Balances or transaction amounts for such parties are included in the numerous statements under the following captions: 52 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 11. RELATED PARTY TRANSACTIONS - (CONTINUED)

12. CONCENTRATION OF CREDIT RISK At June 30, 2000, cash deposits in excess of federally insured limits approximate $293,920. The Company extends credit to customers in the normal course of business in the amount of its trade accounts receivable amounting to $8,622,519 at June 30, 2000. There are significant related party notes receivable and payable. The Company's ability to collect the outstanding notes is dependent on distributions of income to the stockholders (see note 11). 13. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company has a number of financial instruments, none of which are held for trading purposes. The Company estimates that the fair value of all financial instruments at June 30, 2000 and 1999, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying balance sheet. 53 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 14. ASSET PURCHASE AGREEMENT On May 9, 2000 the Company signed an asset purchase agreement with The Citadel Communications Corporation to sell Dick Broadcasting of Tennessee Inc., Dick Broadcasting of Nashville Inc., Dick Broadcasting of Alabama Inc. and Dick Radio of Alabama Inc. for approximately $300,000,000, subject to adjustments provided in the agreement. The sale date was September 30, 2000. 15. UNREVIEWED PRO FORMA BALANCE SHEET AND SCHEDULE OF INCOME FROM OPERATIONS The Asset Purchase Agreement (described in Note 14) specifically excludes: (1) all cash, cash equivalents, or similar type investments, (2) accounts receivable, (3) assets not used in connection with the operations of the stations, (4) any and all claims with respect to transactions occurring or arising prior to the closing date, including, without limitation, notes receivable, intercompany debt, debts or other obligations due from stockholders and claims for refund of taxes for periods prior to the closing date, and (5) the assets of Dick Broadcasting Company, Inc. of North Carolina. Income and expense specifically related to the lease management arrangement with WOKI in Knoxville have been excluded from the Schedule of Income from Operations. 54 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 15. UNREVIEWED PRO FORMA BALANCE SHEET AND SCHEDULE OF INCOME FROM OPERATIONS - (CONTINUED)

55 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 15. UNREVIEWED PRO FORMA BALANCE SHEET AND SCHEDULE OF INCOME FROM OPERATIONS - (CONTINUED)

56 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 15. UNREVIEWED PRO FORMA BALANCE SHEET AND SCHEDULE OF INCOME FROM OPERATIONS - (CONTINUED)

57 DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 15. UNREVIEWED PRO FORMA BALANCE SHEET AND SCHEDULE OF INCOME FROM OPERATIONS - (CONTINUED)

58 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 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"), 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"), 59 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 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"), 60 o the (A) August 1, 2000 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, and the right to operate WTRX-AM in Flint under a time brokerage agreement, as well as the right to acquire such station, for the aggregate purchase price of approximately $120.9 million in cash, and (B) the concurrent sale of WSGW-AM, WGER-FM and WTCF-FM in Saginaw/Bay City/Midland, Michigan for the sale price of approximately $16.1 million in cash (collectively, the "Michigan Transactions"), o the October 2, 2000 acquisition of WKDF-FM and WGFX-FM in Nashville, Tennessee, WIVK-FM, WNOX-AM, WNOX-FM and WSMJ-FM in Knoxville, Tennessee, and WRAX-FM, WZRR-FM, WYSF-FM, WJOX-AM and WAPI-AM in Birmingham, Alabama for the aggregate purchase price of approximately $288.6 million in cash (the "Dick 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"), and 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"). 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. 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 61 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, 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 June 30, 2000 has been adjusted to give effect to the Michigan Transactions and the Dick Acquisition as if each had occurred on June 30, 2000 (collectively, the "Recent 2000 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. 62 CITADEL BROADCASTING COMPANY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET JUNE 30, 2000 (DOLLARS IN THOUSANDS)

(1) Represents the net effect of the Michigan Transactions and the Dick Acquisition, as if each transaction had taken place on June 30, 2000. 63 CITADEL BROADCASTING COMPANY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 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 tables below are shown in thousands.

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

(1) Represents the net effect of the Completed Transactions as if each transaction had taken place on January 1, 1999. Dollars in the tables below are shown in thousands. 66

69 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: October 17, 2000 By: /s/ Lawrence R. Wilson ---------------------- -------------------------- Lawrence R. Wilson Chairman and Chief Executive Officer 70 EXHIBIT INDEX 2.1 Asset Purchase Agreement effective as of April 30, 2000 among Dick Broadcasting Company, Inc. of Tennessee, Dick Broadcasting Company, Inc. of Alabama, Dick Broadcasting Company, Inc. of Nashville, Dick Radio Alabama, Inc., DFT Realty, DFT Realty II, LLC, James Allen Dick, Sr., James Allen Dick, Jr., Charles Arthur Dick, Emily Dick McAlister, Jeannette Dick Hundley and Citadel Broadcasting Company (incorporated by reference to Exhibit 2.1 to Citadel Communications Corporation's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2000). 2.2 First Amendment to Asset Purchase Agreement dated September 30, 2000 among Dick Broadcasting Company, Inc. of Tennessee, Dick Broadcasting Company, Inc. of Alabama, DFT Realty, DFT Realty II, LLC, James Allen Dick, Sr., James Allen Dick, Jr., Charles Arthur Dick, Emily Dick McAlister, Jeannette Dick Hundley and Citadel Broadcasting Company (incorporated by reference to Exhibit 2.2 to Citadel Communications Corporation's Current Report on Form 8-K filed on October 17, 2000). 4.1 Second Amended and Restated Credit Agreement dated as of October 2, 2000 among Citadel Broadcasting Company, Citadel Communications Corporation, 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 the lenders named therein. 23.1 Consent of Hines and Company, P.C.

CITADEL BROADCASTING CO 8-K