UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q
(Mark One):
X        Quarterly  report  pursuant  to Section  13 or 15(d) of the  Securities
         Exchange Act of 1934. For the quarterly period ended September 30, 1997

__       Transition report pursuant to Section 13 or 15(d) of the Securities 
         Exchange Act of 1934.

Commission File Number: 0-26102

                       AMERICAN RADIO SYSTEMS CORPORATION
             (Exact name of registrant as specified in its charter)

               Delaware                                   04-3196245
   (State or other jurisdiction of                     (I.R.S. Employer
    incorporation or organization)                    Identification No.)



                              116 Huntington Avenue
                           Boston, Massachusetts 02116
                    (Address of principal executive offices)

                         Telephone Number (617)-375-7500
              (Registrant's telephone number, including area code)

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

         Yes  X                                   No __

Class of Common Stock                        Outstanding at October 31, 1997
------------------------------               --------------------------------
Class A Common Stock                             24,656,955  shares
Class B Common Stock                              3,534,280  shares
Class C Common Stock                              1,295,518  shares
Total                                            29,486,753  shares
                                                             

<PAGE>

                       AMERICAN RADIO SYSTEMS CORPORATION

                                      INDEX

                          PART I. FINANCIAL INFORMATION



Item 1.  Unaudited Condensed Consolidated Financial Statements          Page No.

Condensed Consolidated Balance Sheets
December 31, 1996 and September 30, 1997.................................... 1

Condensed Consolidated Statements of Operations
Three and nine months ended September 30, 1996 and 1997....................  3

Condensed Consolidated Statements of Cash Flows
Nine months ended September 30, 1996 and 1997..............................  4

Notes to Condensed Consolidated Financial Statements.......................  5

Item 2.  Management's Discussion and Analysis of Financial Condition
            and Results of Operations...................................... 21


                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings................................................. 27

Item 4.  Submission of Matters to a Vote of Security Holders............... 27

Item 5.  Other Information................................................. 27

Item 6.  Exhibits and Reports on Form 8-K.................................. 28

         Signatures........................................................ 30


<PAGE>



PART I.  FINANCIAL INFORMATION

ITEM 1.   UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                            AMERICAN RADIO SYSTEMS CORPORATION

                                           CONDENSED CONSOLIDATED BALANCE SHEETS
                                             (In thousands, except share data)

                                                                        December 31, 1996     September 30, 1997
                                                                        -----------------     ------------------
<S>                                                                      <C>                    <C>         
ASSETS

CURRENT ASSETS:
     Cash and cash equivalents                                            $   10,447              $   13,822
                                                                                                  
     Accounts receivable (less allowance for doubtful                                             
       accounts of $4,560 and $8,433 in 1996 and 1997,                                            
       respectively)                                                          51,897                  84,159
     Employee and other related-party receivables                                249                     279
     Prepaid expenses and other assets                                         3,354                   5,991
     Deferred income taxes                                                     3,370                   3,370
                                                                          ----------              ----------
               Total current assets                                           69,317                 107,621
                                                                          ----------              ----------
PROPERTY AND EQUIPMENT--Net                                                   90,247                 180,657
                                                                          ----------              ----------
OTHER ASSETS:                                                                                     
   Restricted cash                                                                                    34,441              
     Station investment note receivable--related party                                            
       (less valuation allowance of $500 in 1996)                                743              
     Investment notes receivable                                              69,177                  25,756
     Intangible assets--net:                                                                      
         Goodwill                                                            232,908                 415,072
         FCC licenses                                                        233,558               1,138,407
         Other intangible assets                                              26,794                  39,293
     Deposits and other long-term assets                                      26,064                  14,536
     Deferred income taxes                                                                             7,142              
     Net assets held under exchange agreement                                 47,495              
                                                                          ----------              ----------
               Total other assets                                            636,739               1,674,647
                                                                          ----------              ----------
TOTAL                                                                     $  796,303              $1,962,925
                                                                          ==========              ==========
</TABLE>                                                    




       See notes to unaudited condensed consolidated financial statements.


                                        1

<PAGE>



<TABLE>
<CAPTION>
                                            AMERICAN RADIO SYSTEMS CORPORATION

                                      UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                                             (In thousands, except share data)

                                                                                 December 31, 1996    September 30, 1997
                                                                                 -----------------    ------------------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

<S>                                                                               <C>                 <C>              
     Current maturities of long-term debt                                         $            561    $             576
     Accounts payable                                                                        7,085                7,493
     Accrued compensation                                                                    3,027                3,254
     Accrued expenses                                                                       16,355               26,548
     Accrued interest                                                                        7,303               10,447
                                                                                  -----------------   ------------------
          Total current liabilities                                                         34,331               48,318
                                                                                  -----------------   ------------------
DEFERRED INCOME TAXES                                                                       33,205              203,835
                                                                                  -----------------   ------------------
OTHER LONG-TERM LIABILITIES                                                                  2,149               11,072
                                                                                  -----------------   ------------------
LONG-TERM DEBT                                                                             330,111              808,439
                                                                                  -----------------   ------------------
MINORITY INTEREST IN SUBSIDIARIES                                                              344                  774
                                                                                  -----------------   ------------------
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED STOCK
     Cumulative Exchangeable Preferred Stock, $0.01 par value; 10,000,000 shares
        authorized; 2,105,602 shares issued and
        outstanding; liquidation preference $100 per share                                                      215,550
                                                                                  -----------------   ------------------
STOCKHOLDERS' EQUITY
     Preferred Stock; $0.01 par value; 10,000,000 shares authorized; Convertible
       Exchangeable  Preferred  Stock;  137,500  shares  issued and  outstanding
       (represented by 2,750,000 depositary shares);
        liquidation preference $1,000 per share                                                  1                    1
     Class A Common Stock; $.01 par value; 100,000,000 shares authorized;
        15,101,022 and 24,364,417 shares issued and outstanding, respectively                  151                  244
     Class B Common Stock; $.01 par value; 15,000,000 shares authorized;
        4,658,096 and 3,826,818 shares issued and outstanding, respectively                     47                   38
     Class C Common Stock; $.01 par value; 6,000,000 shares authorized;
        1,295,518 shares issued and outstanding                                                 13                   13
     Additional paid-in capital                                                            390,731              675,325
     Unearned compensation                                                                    (297)                (226)
     Retained earnings                                                                       5,955                    0
                                                                                  -----------------   ------------------
          Total                                                                            396,601              675,395
                                                                                  -----------------   ------------------
     Less:
          Treasury stock, at cost, 18,449 and 19,019 shares at
                     December 31, 1996 and September 30, 1997                                 (438)                (458)
                                                                                  -----------------   ------------------
          Total stockholders' equity                                                       396,163              674,937
                                                                                  -----------------   ------------------
TOTAL                                                                             $        796,303    $       1,962,925
                                                                                  =================   ==================
</TABLE>





       See notes to unaudited condensed consolidated financial statements.

 
                                     2

<PAGE>
<TABLE>
<CAPTION>
                                            AMERICAN RADIO SYSTEMS CORPORATION

                                 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                           (In thousands, except per share data)


                                                                   Three Months Ended                 Nine Months Ended
                                                                      September 30,                    September 30,
                                                                      -------------                    -------------

                                                                   1996             1997             1996             1997 
                                                                 --------         --------         --------         --------

<S>                                                          <C>                 <C>             <C>              <C>       
NET REVENUES                                                 $         52,490    $   106,167     $   113,582      $  260,512
                                                             -----------------   ------------    ------------     -----------
OPERATING EXPENSES:                                                                                          
     Operating expenses excluding depreciation and
        amortization, net local marketing agreement and
        corporate general and administrative expenses                  35,397         67,287          78,171         172,018
     Net local marketing agreement expenses                             2,289            574           4,878           1,914
     Depreciation and amortization                                      6,127         19,410          10,966          42,974
     Merger expenses                                                                     300                             300
     Corporate general and administrative expenses                      1,274          2,667           3,614           6,601
                                                             -----------------   ------------    ------------     -----------
          Total expenses                                               45,087         90,238          97,629         223,807
                                                             -----------------   ------------    ------------     -----------
OPERATING INCOME                                                        7,403         15,929          15,953          36,705
                                                             -----------------   ------------    ------------     -----------
OTHER INCOME (EXPENSE):                                                                                      
     Interest expense                                                  (6,254)       (16,838)        (15,217)        (40,074)
     Interest income                                                    1,102            367           4,742           1,512
     Gains (losses) on sale of assets and other, net                      208           (183)            172             455
                                                             -----------------   ------------    ------------     -----------
          Total other income (expense)                                 (4,944)       (16,654)        (10,303)        (38,107)
                                                             -----------------   ------------    ------------     -----------
INCOME (LOSS) FROM OPERATIONS BEFORE
   INCOME TAXES AND EXTRAORDINARY ITEM                                  2,459           (725)          5,650          (1,402)
INCOME TAX BENEFIT (PROVISION)                                         (1,525)           401          (2,961)            774
                                                             -----------------   ------------    ------------     -----------
INCOME (LOSS) BEFORE EXTRAORDINARY LOSS                                   934           (324)          2,689            (628)
EXTRAORDINARY LOSS ON EXTINGUISHMENT
   OF DEBT, NET OF INCOME TAX BENEFIT OF
   $1,013 IN 1997                                                                                                     (1,639)
                                                             -----------------   ------------    ------------     -----------
NET INCOME (LOSS)                                                         934           (324)          2,689          (2,267)
PREFERRED STOCK DIVIDENDS                                              (2,433)        (8,479)         (2,567)        (22,770)
                                                             -----------------   ------------    ------------     -----------
NET INCOME (LOSS) APPLICABLE TO COMMON
   STOCKHOLDERS                                              $         (1,499)   $    (8,803)    $       122      $  (25,037)
                                                             =================   ============    ============     ===========

PER COMMON SHARE AMOUNTS:
   Income (loss) before extraordinary loss                   $           (.07)   $      (.30)    $       .01      $     (.88)
   Extraordinary (loss)                                                                                                 (.06)
                                                             -----------------   ------------    ------------     -----------
   Net  income (loss)                                        $           (.07)   $      (.30)    $       .01      $     (.94)
                                                             -----------------   ------------    ------------     -----------
WEIGHTED AVERAGE NUMBER OF COMMON 
 SHARES OUTSTANDING                                                    22,015         29,484          20,031          26,549
                                                             =================   ============    ============     ===========
</TABLE>




       See notes to unaudited condensed consolidated financial statements.


                                        3
<PAGE>




<TABLE>
<CAPTION>
                                            AMERICAN RADIO SYSTEMS CORPORATION

                                 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      (In thousands)



                                                                         Nine Months Ended September 30,
                                                                       ---------------------------------
                                                                           1996                   1997
                                                                       ----------             ----------

<S>                                                                         <C>                     <C>             
CASH FLOWS USED FROM OPERATING ACTIVITIES:                              $  18,477              $  29,594  
                                                                        ---------              ---------
                                                                                              
                                                                                              
CASH FLOWS FROM INVESTING ACTIVITIES:                                                         
                                                                                              
Payments for purchase of property, equipment and intangible                                   
   assets                                                                  (9,962)               (31,549)
   Proceeds from radio station sales                                       18,000                 51,705
   Payments for radio station acquisitions                               (286,171)              (499,247)
   Payments for tower related acquisitions                                 (8,803)               (62,804)
   Issuance of station investment notes receivable                        (56,522)                  (670)
   Repayment of station investment note receivable                                                 1,243             
   Deposits and other long-term assets                                    (39,281)                12,076
                                                                        ---------              ---------
       Cash used for investing activities                                (382,739)              (529,246)
                                                                                              
CASH FLOWS FROM FINANCING ACTIVITIES:                                                         
   Borrowings under credit agreements and other                           110,590                581,000
   Repayments under credit agreements                                    (151,500)              (257,000)
   Borrowings under other obligations                                                                750             
   Repayments of other obligations                                           (683)                  (998)
   Net proceeds from equity offerings and options                         248,198                    363
   Net proceeds from exchangeable preferred stock offering                                       192,089             
   Net proceeds from debt offering - net of discount                      168,321             
   Additions to deferred financing costs                                                          (5,642)            
   Distributions to minority shareholder                                                            (314)            
   Dividends paid                                                                                 (7,221)            
                                                                        ---------              ---------
       Cash provided by financing activities                              374,926                503,027
                                                                        ---------              ---------
                                                                                              
INCREASE IN CASH AND CASH EQUIVALENTS                                      10,664                  3,375
                                                                                              
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                              3,890                 10,447
                                                                        ---------              ---------
                                                                                              
CASH AND CASH EQUIVALENTS, END OF PERIOD                                $  14,554              $  13,822
                                                                        =========              =========
</TABLE>                                                       




       See notes to unaudited condensed consolidated financial statements.


                                       4


<PAGE>

                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   Basis of Presentation - The financial  statements included herein have been
     prepared  by  American  Radio  Systems  Corporation  (American,  ARS or the
     Company),  without  audit,  pursuant  to the rules and  regulations  of the
     Securities  and  Exchange  Commission.  Although  certain  information  and
     footnote  disclosures normally included in financial statements prepared in
     accordance  with  generally  accepted   accounting   principles  have  been
     condensed or omitted  pursuant to such rules and  regulations,  the Company
     believes  that  the  disclosures  are  adequate  to  make  the  information
     presented not misleading and reflect all  adjustments  (consisting  only of
     normal recurring  adjustments)  which are necessary for a fair presentation
     of results of operations for such periods.  Results of interim  periods may
     not be indicative of results for the full year. These financial  statements
     should be read in conjunction  with the consolidated  financial  statements
     for the year ended December 31, 1996 and the notes thereto  included in the
     Company's Annual Report on Form 10-K (Form 10-K).

     Restricted  Cash - Restricted  cash represents cash held in escrow pursuant
     to Internal  Revenue  Code  certain  like-kind  exchange  agreements  which
     require the net proceeds  from the sale of certain  stations to be utilized
     for  pending  acquisitions.  Such  agreements  may  be  terminated  at  the
     Company's option, in which event such cash held in escrow is required to be
     utilized to reduce borrowings under the Company's credit agreement.

     Reclassifications  - Certain  reclassifications  have been made to the 1996
     financial statements to conform to the 1997 presentation.

2.   Pending Sale of Radio Operations and Tower Distribution: In September 1997,
     ARS entered into a merger agreement with Westinghouse  Electric Corporation
     (Westinghouse),  pursuant to which a subsidiary of Westinghouse  will merge
     with and into ARS, each holder of ARS common stock at the effective time of
     the merger  will  receive  $44.00 per share in cash,  and ARS will become a
     subsidiary of Westinghouse (the Merger).  As a condition to the Merger, ARS
     will  distribute all of its  outstanding  shares of the Tower  Subsidiary's
     (ATS, Tower or Tower  Subsidiary)  common stock owned by ARS to the holders
     of record of ARS common stock at or about the time of the Merger (the Tower
     Distribution).  As a result of the Tower Distribution, ATS will cease to be
     a subsidiary of, or otherwise be affiliated  with, ARS and will  thereafter
     operate as an  independent  publicly held  company.  ARS and ATS will enter
     into certain  agreements  pursuant to the Merger  agreement  providing for,
     among other things,  the orderly separation of ARS and ATS, certain closing
     date  adjustments  based on ARS' debt levels and working  capital  (current
     assets less defined liabilities),  the transfer of lease obligations to ATS
     of leased  space on certain  towers  owned or leased by ARS to ATS, and the
     allocation  of  certain  tax  liabilities  between  ARS and ATS.  The Tower
     Distribution  will result in a taxable gain to ARS, of which  approximately
     $20.0 million will be borne by Westinghouse,  and the remaining  obligation
     currently  estimated  at  approximately  $30.0  to  $40.0  million  will be
     required to be borne by ATS pursuant to provisions to the Merger agreement.

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

     Certain expenses  incurred as a result of the Merger have been provided for
     in  the  current  period  and  consist  primarily  of  professional   fees.
     Additional  professional fees, regulatory related costs, investment banking
     fees and other costs will be expensed as incurred.

                                        5
<PAGE>

                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

3.   Per Share Data - Earnings (loss) per common share is based on the number of
     common shares  outstanding during the period as adjusted for dilutive stock
     options.  Fully diluted  earnings (loss) per share amounts are not reported
     separately as the effects are not dilutive.

     In March 1997, the Financial Accounting Standards Board issued Statement of
     Financial  Accounting  Standards  No. 128,  "Earnings per Share," (FAS 128)
     which will be effective during the fourth quarter of 1997. Had FAS 128 been
     effective for the three and nine month periods ended September 30, 1997 and
     1996,  reported  earnings  (loss) per share on a pro forma basis would have
     been the same as the per share amounts presented herein.

4.   Income  Taxes - The Company  provides  for income  taxes at the end of each
     interim  period  based  on the  estimated  effective  tax rate for the full
     fiscal year for each tax reporting corporate entity. Cumulative adjustments
     to the tax benefit  (provision) are recorded in the interim period in which
     a change in the estimated annual effective rate is determined.

5.   Property and Equipment and  Intangible  Assets - Property and equipment and
     intangible assets included  approximately $108.7 million and $130.1 million
     of  assets  related  to radio  stations  held  for  sale or under  exchange
     agreements  (excluding  the Merger  agreement)  as of December 31, 1996 and
     September  30,  1997,  respectively.  The  following  summary  presents the
     results of operations (excluding  depreciation and amortization,  net local
     marketing  agreement and  corporate  general and  administrative  expenses)
     relating to these stations that are included in the accompanying  unaudited
     condensed consolidated financial statements for each respective period.

     In thousands:
                                Three Months Ended           Nine Months Ended
                                ------------------           -----------------
                                  September 30,                September 30,
                                  -------------                -------------
                                  1996      1997               1996      1997 
                                -------   -------            -------   -------
       Net operating revenues   $ 6,841   $ 7,924            $14,158   $24,145 
       Net operating expenses     4,686     5,585              9,112    17,460
                                           

6.   Offerings - In January 1997, the Company  consummated a private offering of
     2,000,000  shares of its 11 3/8%  Cumulative  Exchangeable  Preferred Stock
     (Exchangeable  Preferred  Stock)  to a  group  of  qualified  institutional
     investors. The Company utilized the net proceeds, which approximated $192.1
     million,  to repay amounts  outstanding under the 1997 Credit Agreement and
     fund  acquisitions.  The Exchangeable  Preferred Stock possesses  mandatory
     redemption  features and is classified  as such in the Company's  condensed
     consolidated  financial statements.  Redemption terms and conditions of the
     Exchangeable Preferred Stock are described in the Form 10-K.

     In April 1997, the Company filed a registration  statement on Form S-4 (No.
     333-26085)  and such  registration  statement,  as  amended,  was  declared
     effective on May 13, 1997. Following  effectiveness,  the Company completed
     an offer to exchange the shares of Series A  Exchangeable  Preferred  Stock
     for new Series B Exchangeable  Preferred  Stock.  The offer expired in June
     1997,  and all Series A  Exchangeable  Preferred  Stock was  exchanged  for
     Series B Exchangeable  Preferred Stock. The redemption terms and conditions
     of  the  Series  A and  the  Series  B  Exchangeable  Preferred  Stock  are
     essentially the same.
                                       6
<PAGE>
                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


7.   Credit  Agreements  - In January  1997,  the Company  entered  into two new
     credit  agreements  with a syndicate of banks (the 1997 Credit  Agreement),
     which  replaced  the  previously  existing  credit  agreement.  All amounts
     outstanding under the previous agreement were repaid with proceeds from the
     1997 Credit Agreement.  The 1997 Credit Agreement  consists of two separate
     lending agreements, providing for facilities consisting of a $550.0 million
     reducing  revolver credit facility which is available  through December 31,
     2004, a $200.0 million revolving credit facility  converting to a term loan
     facility  maturing  December  31,  2004,  and a $150.0  million  term  loan
     facility,   maturing   December  31,  2004,  that  was  available  only  to
     repurchase,  if required,  certain note  obligations of EZ  Communications,
     Inc. (EZ) that were assumed by the Company in connection with the EZ Merger
     discussed  in the Form  10-K and in Note 8. The  $150.0  million  term loan
     facility  was  canceled in May 1997,  as the  Company  was not  required to
     repurchase any of the EZ note obligations.  Additional terms and conditions
     of the 1997 Credit Agreement are described in the Form 10-K.

     Following the closing of the 1997 Credit Agreement and repayment of amounts
     outstanding  under  the  previous  agreement,  the  Company  recognized  an
     extraordinary loss of approximately  $1.6 million,  net of a tax benefit of
     $1.0  million,  representing  the  write-off  of  deferred  financing  fees
     associated with the previous agreement.

     In October 1997, the Tower  Subsidiary  entered into a new credit agreement
     with a syndicate of banks (the 1997 ATS Credit  Agreement),  which replaced
     the previously existing credit agreement. All amounts outstanding under the
     previous  agreement  were  repaid  with  proceeds  from the 1997 ATS Credit
     Agreement. The 1997 ATS Credit Agreement provides the Tower Subsidiary with
     a  $250.0  million  loan  commitment  based  on  ATS  maintaining   certain
     operational ratios, and an additional $150.0 million loan at the discretion
     of ATS, which is available through June 2005.  Following the closing of the
     1997 ATS Credit  Agreement and repayment of amounts  outstanding  under the
     previous  agreement,  ATS  incurred  an  extraordinary  loss in the  fourth
     quarter of  approximately  $1.1  million  which will be recorded net of the
     applicable  income tax  benefit,  representing  the  write-off  of deferred
     financing fees associated with the previous agreement.

8.   Acquisitions and Dispositions

     General:  The  following  acquisitions  have all been  accounted for by the
     purchase method of accounting,  and, accordingly,  the operating results of
     the acquired entities, to the extent that a local marketing agreement (LMA)
     did not exist,  have been included in consolidated  operating results since
     the date of  acquisition.  The  purchase  price has been  allocated  to the
     assets acquired, principally intangible assets, and the liabilities assumed
     based on their  estimated  fair  values  at the dates of  acquisition.  The
     excess of purchase  price over the  estimated  fair value of the net assets
     acquired has been recorded as goodwill.  The financial  statements  reflect
     the preliminary allocation of certain purchase prices as the appraisals for
     certain  acquisitions  have not yet been  finalized.  The Company  does not
     expect the final  appraisals  will have a material  effect on the financial
     position, results of operations or liquidity of the Company.

                                        7
<PAGE>
                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

8.   Acquisitions and Dispositions - (Continued)

     During the first nine months of 1997, the Company consummated the following
     station and tower related  transactions.  See the Form 10-K for  additional
     information on these  transactions and transactions  during the nine months
     of 1996.

     1997 Acquisitions and Dispositions:

     EZ Merger: On April 4, 1997, the Company  consummated the merger of EZ into
     the  Company  (the EZ  Merger).  Pursuant  to the EZ  Merger,  the  Company
     acquired  eighteen FM and six AM stations in eight  markets:  Seattle,  St.
     Louis,  Pittsburgh,  Sacramento,  Charlotte,  Kansas City,  New Orleans and
     Philadelphia,  assumed  approximately $222.4 million of long-term debt  (of
     which approximately $72.7 was paid at closing),  paid approximately  $108.9
     million in cash and issued approximately 8,344,000 shares of Class A Common
     Stock  to  the EZ  stockholders  valued  at  approximately  $310.8  million
     (excluding  approximately  362,000  shares of  common  stock  reserved  for
     options  held by  former  employees  of EZ valued  at  approximately  $12.5
     million).  The aggregate  purchase price was approximately  $830.0 million,
     including  goodwill,  approximately  $7.0 million in transaction costs, and
     assumed  liabilities  (including  deferred  income taxes) of  approximately
     $428.0  million.  The EZ Merger has been  accounted  for using an effective
     closing  date of  April 1,  1997,  as the  difference  between  actual  and
     effective  closing  date  on  the  results  of  operations,  liquidity  and
     financial position was not material.

     As part of the EZ Merger, the Company assumed EZ's obligations with respect
     to $150.0  million  principal  amount of the EZ 9.75%  Senior  Subordinated
     Notes (the 9.75%  Notes)  and  repaid  all  borrowings  under the EZ credit
     facility with borrowings from the 1997 Credit  Agreement.  As a consequence
     of the EZ Merger,  the Company was  required to offer to purchase the 9.75%
     Notes at 101% of their principal amount. Such offer commenced in April 1997
     and expired in May 1997,  with no such notes being  tendered for  purchase.
     The  9.75%  Notes  have  semi-annual  interest  payments  due on June 1 and
     December 1, have certain  redemption terms at the option of the Company and
     are due in 2005. The 9.75% Notes are general  unsecured  obligations of the
     Company and are guaranteed by the restricted  subsidiaries  as described in
     Note 11.

     Austin: In March 1997, the Company acquired KAMX-FM,  KKMJ-FM, and KJCE-AM,
     for approximately $28.7 million.

     Baltimore:  In February 1997, the Company  acquired WWMX-FM and WOCT-FM for
     approximately $90.0 million.

     Boston/Worcester: In January 1997, the Company acquired WAAF-FM and WWTM-AM
     for  approximately  $24.8  million.   The  Company  began  programming  and
     marketing the station pursuant to an LMA agreement in August 1996.

     In July 1997, the Company acquired WNFT-AM for approximately  $4.5 million.
     The Company began  programming and marketing the station pursuant to an LMA
     agreement in June 1997.
                                       8
<PAGE>

                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

8.   Acquisitions and Dispositions - (Continued)

     Charlotte and  Pittsburgh:  In May 1997,  the Company,  as successor to EZ,
     consummated  an asset  exchange  agreement  pursuant  to which the  Company
     exchanged  WIOQ-FM  and  WUSL-FM  in  Philadelphia  for  WRFX-FM,  WPEG-FM,
     WBAV-FM, WGIV-AM (formerly WBAV-AM) and WFNZ-AM serving Charlotte, and also
     consummated  an  asset  purchase   agreement  to  acquire  WNKS-FM  serving
     Charlotte for  approximately  $10.0  million.  In February 1997, EZ and the
     seller entered into a consent decree with the U.S. Justice  Department (the
     Charlotte Consent Decree). Pursuant to the Charlotte Consent Decree, and in
     compliance with the FCC's multiple ownership rules, EZ agreed to dispose of
     WRFX-FM, which was transferred to an independent and insulated trustee upon
     consummation  of the exchange.  In August 1997, the Company  consummated an
     asset  exchange  agreement  pursuant  to which  it  exchanged  WRFX-FM  for
     WDSY-FM, serving Pittsburgh, and $20.0 million.

     Cincinnati:  In January  1997,  the  Company  merged  with an  unaffiliated
     corporation  pursuant to which it became a party to an agreement to acquire
     WGRR-FM,  for  approximately  $30.5 million.  Pursuant to such merger,  the
     Company   issued   18,341   shares  of  Class  A  Common  Stock  valued  at
     approximately  $0.5  million.  In May 1997,  the  Company  consummated  the
     acquisition of WGRR-FM.

     Cincinnati and Rochester:  In February 1997, the Company acquired  WVOR-FM,
     WPXY-FM,  WHAM-AM and WHTK-AM for  approximately  $31.5  million  including
     working capital. In April 1997, the Company exchanged WVOR-FM,  WHAM-AM and
     WHTK-AM serving Rochester, together with $16.0 million, for WKRQ-FM serving
     Cincinnati.

     Dayton:  In February 1997, the Company acquired  WXEG-FM for  approximately
     $3.6  million  and  acquired  WLQT-FM and WBBT-FM  (formerly  WDOL-FM)  for
     approximately $12.0 million. (See Note 9).

     Detroit, Philadelphia,  Sacramento: In February 1997, the Company exchanged
     WFLN-FM in Philadelphia for KSFM-FM and KMJI-AM serving Sacramento and sold
     WQRS-FM in Detroit for  approximately  $20.0  million.  The net assets were
     classified as net assets under exchange  agreement as of December 31, 1996.
     See Sacramento below.

     Fresno:  In April  1997,  the  Company  acquired  KOQO-AM  and  KOQO-FM for
     approximately $6.0 million.

     Omaha:  In May 1997,  the Company  sold the assets of KGOR-FM,  KFAB-AM and
     Business Music Service Inc. for  approximately  $38.0 million.  Proceeds of
     the sale were initially held as restricted cash.

     Portsmouth:  In September  1997,  the Company  acquired  WQSO-FM  (formerly
     WSRI-FM),  WZNN-AM, WMYF-AM and WEZR-FM for approximately $6.0 million. The
     Company began  programming  and  marketing the stations  pursuant to an LMA
     agreement in July 1997.

     Rochester:  In April 1997, the Company acquired WZNE-FM (formerly WAQB-FM),
     a newly licensed Class A FM station for approximately $3.5 million.

     In July 1997, the Company sold the assets of WCMF-AM for approximately $0.7
     million.

                                       9
<PAGE>
                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

8.   Acquisitions and Dispositions - (Continued)

     Sacramento:  In March 1997, the Company acquired KXOA-FM, KQPT-AM (formerly
     KXOA-AM) and KZZO-FM (formerly KQPT-FM) for approximately $50.0 million. In
     October  1996,  the Company  entered  into an agreement to sell KXOA-FM for
     approximately  $27.5  million.  After the expiration of the HSR Act waiting
     period,  the other party to the agreement  began  programming and marketing
     KXOA-FM  pursuant to an LMA in January 1997. As a condition to consummation
     of the EZ merger,  KXOA-FM was  transferred to an independent and insulated
     trustee  (under a trust for the benefit of the Company) and was held by the
     trustee subject to sale pursuant to the foregoing agreement.  In June 1997,
     the trustee sold KXOA-FM to the ultimate purchaser.

     In April 1997, the Company sold KMJI-AM for approximately $1.5 million.

     Sacramento and West Palm Beach:  In March 1997, the Company  consummated an
     agreement to exchange  KSTE-AM in Sacramento  and $33.0 million in cash for
     WEAT-FM, WEAT-AM and WOLL-FM serving West Palm Beach. (See Note 9).

     St. Louis:  In July 1997, the Company sold the assets of KTRS-AM  (formerly
     KSD-AM) for approximately $10.0 million.

     San Jose: In February  1997, the Company  acquired  KBAY-FM and KKSJ-AM for
     approximately $31.0 million. (See Note 9).

     In September 1997, the Company sold the assets of KKSJ-AM for approximately
     $3.2 million.  The acquirer  began  programming  and marketing the stations
     pursuant to an LMA agreement in June 1997.

     Seattle and New  Orleans:  In April 1997,  the Company  exchanged  WEZB-FM,
     WRNO-FM and  WBYU-AM,  serving New  Orleans,  and $7.5  million for KBKS-FM
     (formerly KCIN-FM) and KRPM-AM serving Seattle.

     In June 1997, the Company sold the assets of KMPS-AM for approximately $1.8
     million.

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

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

     In July 1997, the Tower Subsidiary acquired the following:

          (i) the assets of three  affiliated  entities which owned and operated
          towers and a tower site management business in southern California for
          an aggregate purchase price of approximately $33.5 million;
          (ii)  the  assets  of  one  tower  site  in   Washington,   D.C.   for
          approximately $0.9 million;
          (iii) the assets of six tower sites in Pennsylvania for  approximately
          $0.3 million and
          (iv)  the  rights  to  build  five  tower   sites  in   Maryland   for
          approximately $0.5 million.

                                       10
<PAGE>
                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

8.   Acquisitions and Dispositions - (Continued)

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

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

     In May 1997,  the  Tower  Subsidiary  and an  unaffiliated  party  formed a
     limited liability corporation to own and operate communication towers which
     will be  constructed  on over 50 tower  sites in northern  California.  The
     Tower Subsidiary paid  approximately $0.8 million to the unaffiliated party
     and  currently  owns a 70% interest in the entity,  with the  remaining 30%
     owned  by  such  party.  The  Tower  Subsidiary  is  obligated  to  provide
     additional  financing  for the  construction  of these  and any  additional
     towers it may approve;  the obligation for such 50 tower sites is estimated
     to be  approximately  $5.0 million.  The accounts of the limited  liability
     corporation are included in the consolidated  financial statements with the
     other party's investment reflected as minority interest in subsidiary.

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

     The following unaudited pro forma summary presents the consolidated results
     of  operations  as if the  transactions  had occurred as of January 1, 1996
     after giving  effect to certain  adjustments,  including  depreciation  and
     amortization  of assets and interest  expense on any debt  incurred to fund
     the acquisitions.  These unaudited pro forma results have been prepared for
     comparative purposes only and do not purport to be indicative of what would
     have occurred had the transactions actually been made as of January 1, 1996
     or of results which may occur in the future.

     In thousands, except per share data:

                                    Nine Months Ended       Nine Months Ended 
                                    ------------------      ------------------
                                    September 30, 1996      September 30, 1997
                                    ------------------      ------------------
Net revenues                            $199,476                $297,606
Loss before extraordinary loss           (14,376)                 (7,558)
Net loss                                 (14,376)                 (9,197)
Net loss applicable to common                                 
  stockholders                           (16,943)                (31,967)
Net loss per common share               $  (0.84)               $  (1.09)
                                                             

                                       11
<PAGE>

                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

9.   Pending  Transactions - The Company has numerous pending transactions which
     were  described  in the Form  10-K or have  been  entered  into  subsequent
     thereto. The following transactions are currently pending:

     Dayton and Kansas  City:  In June 1997,  the Company  entered into an asset
     exchange  agreement  pursuant to which it will  acquire  WDAF-AM,  KYYS-FM,
     KMXV-FM and KUDL-FM  serving Kansas City in exchange for WXEG-FM,  WBTT-FM,
     WLQT-FM,  WMMX-FM,  WTUE-FM  and  WONE-AM  serving  Dayton.  Subject to the
     receipt of FCC approval (the HSR Act waiting period was terminated  early),
     the transaction is expected to be consummated in the fourth quarter of 1997
     or the first quarter of 1998. The Company began  programming  and marketing
     KYYS-FM and KMXV-FM pursuant to an LMA agreement in June 1997.

     Kansas City,  Sacramento and St. Louis:  In July 1997, the Company  entered
     into an agreement  to acquire  KLOU-FM in St. Louis in exchange for KUDL-FM
     and WDAF-AM in Kansas City and approximately $7.0 million. The Company also
     entered into a related agreement with the same party, pursuant to which the
     Company  will  sell  KCTC-AM  serving  Sacramento  for  approximately  $4.0
     million.  Subject to the  receipt  of FCC  approval,  (the HSR Act  waiting
     period has expired), the transactions are expected to be consummated in the
     fourth quarter.

     Palm Springs:  In September  1997, the Company entered into an agreement to
     acquire  KEZN-FM  for  approximately   $5.1  million.   The  Company  began
     programming  and  marketing  the stations  pursuant to an LMA  agreement in
     October 1997.  Subject to the receipt of FCC approval,  the  transaction is
     expected to be consummated in the fourth quarter.

     Portland,  Sacramento,  San  Francisco  and San Jose:  In April  1997,  the
     Company entered into an asset exchange  agreement pursuant to which it will
     acquire KINK-FM,  serving Portland,  Oregon,  KBRG-FM,  serving Fremont/San
     Francisco,  California,  $2.0 million in cash, and 150,000 shares of common
     stock of Latin Communications,  Inc., in exchange for KBAY-FM,  serving San
     Jose, and KSSJ-FM, serving Sacramento.  The agreement also provides for the
     exchange of KINK-FM for KBAY-FM in the event  regulatory  approval  for the
     exchange  of KBRG-FM  and KSSJ-FM  cannot be  obtained.  Subject to certain
     conditions,   including  the  receipt  of  FCC  approval  and  satisfactory
     resolution of the matters in the subsequent paragraph,  and, in the case of
     the exchange of KSSJ-FM for  KBRG-FM,  Justice  Department  approval of the
     acquisition pursuant to a consent decree, the transaction is expected to be
     consummated in the fourth quarter.

     In June 1997, the Company and the seller  received  requests for additional
     information  about the acquisition from the Antitrust  Division of the U.S.
     Department of Justice.  Under the HSR Act and the  regulations  thereunder,
     the acquisition may not be consummated  until 20 days after the Company and
     the seller have  substantially  complied with such  additional  information
     requests.  Although the Company  believes the  acquisition  and divestiture
     complied with the antitrust laws, the Department of Justice or others could
     take action under the antitrust laws to enjoin or otherwise  challenge such
     acquisition/divestiture. (See Note 10).

     Riverside/San  Bernardino and Sun City: In March 1997, the Company  entered
     into an agreement to acquire KFRG-FM,  serving the Riverside/San Bernardino
     market, and KXFG-FM, serving Sun City, California,  for approximately $60.0
     million.  The Company began programming and marketing the stations pursuant
     to an LMA agreement in August 1997.  FCC approval has been received and the
     HSR Act waiting period was terminated early. The acquisition is expected to
     be consummated in the first quarter of 1998.

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

                                       12
<PAGE>
                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

9.   Pending Transactions -  (Continued)

     San Jose and  Monteray:  In March 1997,  the Company  entered into a merger
     agreement  pursuant to which the Company will acquire the assets of KEZR-FM
     and KLUE-FM  serving  Monteray,  California  in exchange for  approximately
     723,000  shares  of Class A Common  Stock  valued  at  approximately  $20.0
     million and $4.0 million in cash. In June 1997,  the Company and the seller
     each received a Civil  Investigative  Demand from the Antitrust Division of
     the  Department  of  Justice  requesting  certain   documentary   materials
     regarding the merger and the purchase,  sale, or trade or other transfer of
     radio  stations  in San Jose,  California.  Subject  to the  receipt of FCC
     approval and  resolution of the matters  raised by the  Antitrust  Division
     described  above,  the  acquisition  is expected to be  consummated  in the
     fourth quarter. (See Note 10).

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

     West Palm Beach:  In July 1997,  the Company  entered  into an agreement to
     acquire  WTPX-FM  for  approximately  $11.0  million.   The  Company  began
     programming and marketing the stations  pursuant to an LMA in June 1997. In
     October  1997,  the Company  entered into an  agreement to terminate  these
     agreements.

10.  Subsequent   Events  -  Subsequent  to  September  30,  1997,  the  Company
     consummated the following transactions:

     Hartford:  In November 1997, the Company  acquired the New England  Weather
     Service,  based in  Hartford,  Connecticut  pursuant to the  exercise of an
     option which the Company  acquired in connection  with its  acquisition  of
     WTIC-AM and WTIC-FM in May 1996.  The  transaction  was  financed by a $1.0
     million  escrow  deposit  which  was  paid at the time  the  stations  were
     acquired.

     Lebanon: In October 1997, the Company acquired WMMA-FM serving the Lebanon,
     Ohio market for approximately $3.0 million.

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

     West Palm Beach:  In October 1997,  the Company sold the assets of WKGR-FM,
     WOLL-FM,  and WBZT-AM for  approximately  $29.0 million in cash and a tower
     site which was transferred to the Tower Subsidiary.

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

                                       13
<PAGE>

                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

10.  Subsequent Events - (Continued)

     Tower  Subsidiary:  In October 1997, the Tower  Subsidiary  entered into an
     agreement   to  merge  with  a  company   operating  in  Florida  (the  OPM
     transaction) for a maximum purchase price of approximately  $105.0 million.
     By December 31, 1996 such company is expected to own  approximately  ninety
     towers. The final purchase price is contingent upon the seller's ability to
     build and construct  tower sites and produce  certain  cashflows from those
     towers.  The Tower  Subsidiary  has also  agreed to provide  financing,  on
     identified  sites that are in various stages of receiving site permits,  to
     enable the seller to  construct an  additional  190 towers,  the  aggregate
     amount of such  financing  required  to be  provided  cannot  exceed  $37.0
     million.

     In October 1997, the Tower Subsidiary  entered into an agreement to acquire
     a   communications   site  with  twelve  towers  in  Tucson,   Arizona  for
     approximately $12.0 million.

     Consummation  of these  transactions  is  conditioned  on various  matters,
     including,  in the case of the OPM  transaction,  the expiration or earlier
     termination of the HSR Act waiting period.  Subject to the  satisfaction of
     such  conditions,  the  acquisitions  are expected to be consummated in the
     first quarter of 1998.

     In October 1997,  the Tower  Subsidiary  acquired two  affiliated  entities
     operating  tower  sites  and  a  tower  site  management  business  located
     principally  in  northern   California  for  approximately  $46.5  million,
     including  assumed  liabilities.   In  connection   therewith,   the  Tower
     Subsidiary  had also  agreed  to loan  approximately  $.65  million  to the
     sellers on an unsecured  basis,  of which  approximately  $0.25 million had
     been advanced through September 30, 1997 and was repaid at the closing.

     In October  1997,  the Tower  Subsidiary  acquired  tower sites and certain
     video,  voice  and  data  transport  operations  for  approximately  $70.25
     million.  The acquired  business owned or leased  approximately 125 towers,
     principally in the  Mid-Atlantic  region,  with the remainder in California
     and Texas.

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

                                       14
<PAGE>
                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

11.  Subsidiary Guarantees:

     The Company's payment obligations under the 9.00% Senior Subordinated Notes
     (9.00% Notes) and the 9.75% Notes are fully and unconditionally  guaranteed
     on a joint and several basis (collectively,  the Subsidiary Guarantees), on
     a senior basis (in the case of the 9.75%  Notes) and a senior  subordinated
     basis (in the case of the 9.00% Notes) by all of its present and any future
     Restricted   Subsidiaries   (collectively   Restricted   Guarantors).   The
     Restricted  Subsidiaries  have  also  unconditionally  guaranteed,  and any
     future Restricted  Subsidiaries  will be required to guarantee,  on a joint
     and several basis  (collectively,  the Senior Subsidiary  Guarantees),  all
     obligations  of the  Company  under the 1997  Credit  Agreement.  The Tower
     Subsidiary has not guaranteed  obligations  under the Credit  Agreements or
     either series of the Senior Subordinated Notes.

     The 9.00%  Notes and the  Subsidiary  Guarantees  are  subordinated  to all
     Senior Debt (as defined) of the Company  including  indebtedness  under the
     1997 Credit Agreement and the Senior Subsidiary  Guarantees.  The indenture
     governing each series of the Senior Subordinated Notes contains limitations
     on the amount of indebtedness (including Senior Debt) which the Company may
     incur.

     With the intent that the Subsidiary  Guarantees  not constitute  fraudulent
     transfers  or  conveyances  under  applicable  state or  federal  law,  the
     obligation of each guarantor under its Subsidiary Guarantee is also limited
     to the  maximum  amount  as will,  after  giving  effect  to any  rights to
     contribution of such guarantor  pursuant to any agreement  providing for an
     equitable  contribution  among such  guarantor and other  affiliates of the
     Company of  payments  made by  guarantees  by such  parties,  result in the
     obligations  of such  guarantor  in  respect  of such  maximum  amount  not
     constituting a fraudulent conveyance.

     The following unaudited condensed  consolidating financial data illustrates
     the  composition  of the combined  guarantors.  The Company  believes  that
     separate complete financial  statements of the respective  guarantors would
     not  provide  additional  material  information  which  would be  useful in
     assessing the financial composition of the guarantors.  No single guarantor
     has any  significant  legal  restrictions  on the ability of  investors  or
     creditors  to  obtain  access  to its  assets  in event of  default  on the
     Subsidiary  Guarantee,  other  than in the  case  of the  9.00%  Notes  its
     subordination to Senior Debt described above.

     Investments in  subsidiaries  are accounted for by the parent on the equity
     method  for   purposes   of  the   unaudited   supplemental   consolidating
     presentation.  Earnings (losses) of subsidiaries are therefore reflected in
     the parent's  investment accounts and earnings.  The principal  elimination
     entries eliminate investments in subsidiaries and intercompany balances and
     transactions.
                                       15
<PAGE>

                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


11.      Subsidiary Guarantees - (continued):


<TABLE>
<CAPTION>
                                        Unaudited Condensed Consolidating Balance Sheet
                                                       September 30, 1997
                                                     (Dollars in thousands)

                                               Parent and       Guarantor     Non-guarantor                     Consolidated
                                             its Divisions    Subsidiaries    Subsidiaries     Eliminations        Totals
                                             -------------   -------------  ---------------   -------------    -------------
ASSETS
CURRENT ASSETS:
<S>                                          <C>             <C>            <C>               <C>              <C>          
   Cash and cash equivalents                 $       8,856   $       2,671  $         2,295                    $      13,822
   Accounts receivable, net                         49,697          32,902            1,560                           84,159
   Prepaid expenses and other current assets         4,067           1,934              269                            6,270
   Deferred income taxes                             3,201             169                                             3,370
                                             -------------   -------------  ---------------   -------------    -------------
      Total current assets                          65,821          37,676            4,124               0          107,621

PROPERTY AND EQUIPMENT, NET                         88,439          48,277           43,941                          180,657
OTHER ASSETS:
   Restricted cash                                  34,441                                                            34,441
   Investment in and advances to subsidiaries    1,254,013                                    $  (1,254,013)               0
   Investment notes receivable                      25,496                              260                           25,756
   Goodwill - net                                  341,953          20,681           52,438                          415,072
   FCC licenses - net                                8,609       1,129,798                                         1,138,407
   Other intangible assets - net                    29,861           2,052            7,380                           39,293
   Deposits and other long-term assets              11,780                            2,756                           14,536
   Deferred income taxes                             7,142                                                             7,142
                                             -------------   -------------  ---------------   -------------    --------------
      Total other assets                         1,713,295       1,152,531           62,834      (1,254,013)       1,674,647
                                             -------------   -------------  ---------------   -------------    -------------
TOTAL ASSETS                                 $   1,867,555   $   1,238,484  $       110,899    $ (1,254,013)   $   1,962,925
                                             =============   =============  ===============    ============    =============
</TABLE>




                                       16
<PAGE>




                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


11.      Subsidiary Guarantees - (continued):


<TABLE>
<CAPTION>
                                        Unaudited Condensed Consolidating Balance Sheet
                                                       September 30, 1997
                                                     (Dollars in thousands)

                                                     Parent and       Guarantor     Non-guarantor                     Consolidated
                                                   its Divisions     Subsidiaries   Subsidiaries     Eliminations        Totals
                                                    ------------      -----------  --------------    -------------     -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
<S>                                                 <C>               <C>          <C>               <C>               <C>        
   Current maturities of long-term debt             $        468                   $          108                      $       576
   Accounts payable and accrued expenses                  29,619      $    12,979           5,144                           47,742
                                                    ------------      -----------  --------------    -------------     -----------
Total current liabilities                                 30,087           12,979           5,252                0          48,318

NON-CURRENT LIABILITIES:
   Deferred income taxes                                 181,669           21,522             644                          203,835
   Other long-term liabilities                            10,968               75              29                           11,072
   Long-term debt                                        754,344                           54,095                          808,439
                                                    ------------      -----------  --------------    -------------         -------
   Total non-current liabilities                         946,981           21,597          54,768                0       1,023,346

MINORITY INTEREST IN SUBSIDIARIES                                                             774                              774
REDEEMABLE PREFERRED STOCK                               215,550                                                           215,550

STOCKHOLDERS'  EQUITY:
   Preferred Stock                                             1                                                                 1
   Common Stock                                              295                                                               295
   Additional paid-in capital                            675,325        1,194,704          51,403    $  (1,246,107)        675,325
   Unearned compensation                                    (226)                                                             (226)
   Retained earnings                                                        9,204          (1,298)          (7,906)              0
   Treasury stock                                           (458)                                                             (458)
                                                    ------------      -----------  --------------    -------------     ------------
      Total stockholders' equity                         674,937        1,203,908          50,105       (1,254,013)        674,937
                                                    ------------      -----------   -------------    -------------     -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY                                           $  1,867,555      $ 1,238,484  $      110,899    $  (1,254,013)    $ 1,962,925
                                                    ============      ===========  ==============    =============     ===========
</TABLE>






                                       17


<PAGE>



                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


11.      Subsidiary Guarantees - (continued):


<TABLE>
<CAPTION>
                                   Unaudited Condensed Consolidating Statement of Operations
                                          For the Nine Months Ended September 30, 1997
                                                     (Dollars in thousands)

                                                     Parent and      Guarantor      Non-guarantor                    Consolidated
                                                   its Divisions    Subsidiaries    Subsidiaries     Eliminations       Totals
                                                  --------------   --------------  --------------    -------------   --------------

<S>                                               <C>              <C>                               <C>             <C>           
Net broadcast revenues                            $      169,690   $       83,212                    $         (36)  $      252,866
Tower revenues                                                                     $        7,901             (255)           7,646
License fees charged to Parent                           (12,590)          12,590                                                 0
                                                  --------------   --------------  --------------    -------------   --------------
Total net revenues                                       157,100           95,802           7,901             (291)         260,512

Operating expenses excluding depreciation and 
    amortization,  net local marketing
    agreement and corporate general and 
    administrative expenses                              117,289           50,513           4,507             (291)         172,018
Net local marketing agreement expenses (revenues)          2,032             (118)                                            1,914
Depreciation and amortization                             12,845           27,423           2,706                            42,974
Merger expenses                                              300                                                                300
Corporate general and administrative expenses              6,601                                                              6,601
                                                  --------------   --------------  --------------    -------------   --------------
Operating income                                          18,033           17,984             688                0           36,705

Other income (expense):
  Interest expense                                       (38,756)                          (1,318)                          (40,074)
  Interest income                                          1,415                               97                             1,512
  Gains (losses) on sale of assets and other, net            682               (3)           (224)                              455
  Equity in (loss) of subsidiaries, net of income 
    taxes recorded at the subsidiary level                 7,887                                            (7,887)               0
                                                  --------------   --------------  --------------    -------------   --------------
Income (loss) before income taxes and 
  extraordinary item                                     (10,739)          17,981            (757)          (7,887)          (1,402)
Benefit (provision ) for income taxes                     10,111           (9,386)             49                               774
                                                  --------------   --------------  --------------    -------------   --------------
Income (loss) before extraordinary loss                     (628)           8,595            (708)          (7,887)            (628)
Extraordinary loss on extinguishment of debt
   - net of tax benefit                                   (1,639)                                                            (1,639)
                                                  --------------   --------------  --------------    -------------   --------------
Net income (loss)                                 $       (2,267)  $        8,595  $         (708)   $      (7,887)  $       (2,267)
                                                  ==============   ==============  ==============    =============   ==============
</TABLE>






                                       18

<PAGE>




                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


11.      Subsidiary Guarantees - (continued):


<TABLE>
<CAPTION>
                                   Unaudited Condensed Consolidating Statement of Operations
                                         For the Three Months Ended September 30, 1997
                                                     (Dollars in thousands)

                                                     Parent and      Guarantor      Non-guarantor                     Consolidated
                                                   its Divisions    Subsidiaries    Subsidiaries       Eliminations      Totals
                                                   -------------    -------------  --------------      -----------   -------------

<S>                                                <C>              <C>            <C>                 <C>           <C>          
Net broadcast revenues                             $      63,806    $      37,952                      $       (13)  $     101,745
Tower revenues                                                                     $        4,521              (99)          4,422
License fees charged to Parent                            (4,161)           4,161                                                0
                                                   -------------    -------------  --------------      -----------   -------------
Total net revenues                                        59,645           42,113           4,521             (112)        106,167

Operating expenses excluding depreciation and 
  amortization,  net local marketing agreement 
  and corporate general and administrative expenses       42,966           21,775           2,658             (112)         67,287
Net local marketing agreement expenses (revenues)          1,040             (466)                                             574
Depreciation and amortization                              5,015           13,011           1,384                           19,410
Merger expenses                                              300                                                               300
Corporate general and administrative expenses              2,667                                                             2,667
                                                   -------------    -------------  --------------      -----------   -------------
Operating income (loss)                                    7,657            7,793             479                0          15,929

Other income (expense):
  Interest expense                                       (15,838)                          (1,000)                         (16,838)
  Interest income                                            327                               40                              367
  Gains (losses) on sale of assets and other, net           (121)                             (62)                            (183)
  Equity in (loss) of subsidiaries, net of income 
    taxes recorded at the subsidiary level                 3,188                                            (3,188)              0
                                                   -------------    -------------  --------------      -----------   -------------
Income (loss) before income taxes and extraordinary item
                                                          (4,787)           7,793            (543)          (3,188)           (725)
Benefit (provision ) for income taxes                      4,463           (4,062)                                             401
                                                   -------------    -------------  --------------      -----------   -------------
Net income (loss)                                  $        (324)   $       3,731  $         (543)     $    (3,188)  $        (324)
                                                   =============    =============  ==============      ===========   =============
</TABLE>







                                       19


<PAGE>




                       AMERICAN RADIO SYSTEMS CORPORATION

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


11.      Subsidiary Guarantees - (continued):


<TABLE>
<CAPTION>
                                   Unaudited Condensed Consolidating Statement of Cash Flows
                                          For the Nine Months Ended September 30, 1997
                                                     (Dollars in thousands)

                                                    Parent and        Guarantor     Non-guarantor                      Consolidated
                                                  its Divisions      Subsidiaries   Subsidiaries     Eliminations         Totals
                                                  --------------       ----------   -------------   ---------------     ----------

<S>                                              <C>                   <C>          <C>             <C>                 <C>       
Cash flows from (used for) operating activities  $       (13,986)      $   40,462   $       3,118                       $   29,594
                                                  --------------       ----------   -------------   ---------------     ----------

Investing Activities:
  Payments for purchase of property and
        Equipment and intangible assets                  (23,348)                          (8,201)                         (31,549)
  Proceeds from radio station sales                       51,705                                                            51,705
  Payments for radio station acquisitions               (499,247)                                                         (499,247)
  Payments for tower related acquisitions                                                 (62,804)                         (62,804)
  Issuance of station investment notes receivable           (410)                            (260)                            (670)
  Repayment for station investment notes receivable        1,243                                                             1,243
  Deposits and other long-term assets                     14,453              (48)         (2,329)                          12,076
                                                  --------------       ----------   -------------   ---------------     ----------
Cash flows used by investing activities                 (455,604)             (48)        (73,594)                        (529,246)
                                                  --------------       ----------   -------------   ---------------     ----------

Financing Activities:
  Borrowings under Credit Agreements and other           531,000                           50,000                          581,000
  Repayment of Credit Agreements                        (257,000)                                                         (257,000)
  Borrowings under other obligations                         750                                                               750
  Repayment of other obligations                            (667)                            (331)                            (998)
  Net proceeds from equity offerings and options             363                                                               363
  Net proceeds from exchangeable preferred stock         192,089                                                           192,089
  Additions to deferred financing costs                   (5,600)                             (42)                          (5,642)
  Distributions to minority interest                                                         (314)                            (314)
  Dividends paid                                          (7,221)                                                           (7,221)
  Investment in and advances to subsidiaries              16,658          (37,743)         21,085                                0
                                                  --------------       ----------   -------------   ---------------     ----------
Cash flows from financing activities                     470,372          (37,743)         70,398                          503,027
                                                  --------------       ----------   -------------   ---------------     ----------

Increase (decrease) in cash and cash equivalents             782            2,671             (78)                           3,375
Cash and cash equivalents at beginning
       of period                                           8,074                            2,373                           10,447
                                                  --------------       ----------   -------------   ---------------     ----------
Cash and cash equivalents at end of period        $        8,856       $    2,671   $       2,295   $                   $   13,822
                                                  ==============       ==========   =============   ===============     ==========
</TABLE>


                                       20
<PAGE>
ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS

This  report  contains   "forward-looking   statements"   including   statements
concerning  projections,  plans,  objectives,  future events or performance  and
underlying  assumptions and other  statements which are other than statements of
historical  fact. The Company wishes to caution  readers that certain  important
factors may have affected and could in the future  affect the  Company's  actual
results and could cause the Company's  actual results for subsequent  periods to
differ materially from those expressed in any forward-looking  statement made by
or on behalf of the Company.  These important factors include among others,  the
following:  (i)  any  adverse  change  in the  laws,  regulations  and  policies
governing the operation, ownership and acquisition of radio stations, including,
but not limited to, those  established by Congress,  the Federal  Communications
Commission and the Antitrust Division of the U.S. Justice  Department;  and (ii)
the Company's  financial  leverage as a result of borrowings under the Company's
credit  agreements,  which bear interest at variable rates,  and the issuance of
the  Senior  Subordinated  Notes  could make it  vulnerable  to an  increase  in
interest rates or a downturn in the operating  performance of its radio stations
or a downturn in economic conditions.

As of September 30, 1997, the Company owned and/or  operated  approximately  100
radio  stations.  See the Form  10-K and the  unaudited  condensed  consolidated
financial  statements  for a description  of the 1997 and 1996 station and tower
acquisitions.  As of September  30,  1996,  the Company  owned  and/or  operated
approximately 70 radio stations.  These transactions have significantly affected
operations for the three and nine months ended September 30, 1997 as compared to
the three and nine months ended September 30, 1996.

Three months ended September 30, 1997 and 1996

Net revenues were $106.2  million for the three months ended  September 30, 1997
compared  to $52.5  million  for the same three  months in 1996,  an increase of
$53.7 million or 102.3%.  This increase was  attributable  to revenue  growth in
some of the Company's  existing markets and, to a more substantial  extent,  the
impact of the EZ Merger and other  acquisitions that occurred in the latter half
of 1996 and 1997.

Station operating  expenses  excluding net local marketing  agreement  expenses,
depreciation and amortization and corporate general and administrative  expenses
were $67.3  million for the three months ended  September  30, 1997  compared to
$35.4  million  for the same period in 1996,  an  increase  of $31.9  million or
90.1%.  This increase was due to the impact of increased  costs  associated with
the Company's revenue growth.

Net local  marketing  agreement  expenses were $0.6 million for the three months
ended  September  30, 1997 compared to $2.3 million for the same three months in
1996.  Local marketing  agreement  expenses for the three months ended September
30, 1997 are  presented  net of  approximately  $0.5 million of revenues  earned
under such agreements. Local marketing agreement expenses for the same period in
1996 are presented net of  approximately  $1.0 million of revenues  earned under
such agreements.  The change in the balances for each period reflects the timing
of pending station acquisitions and dispositions.

Depreciation  and  amortization was $19.4 million and $6.1 million for the three
months  ended  September  30, 1997 and  September  30,  1996,  respectively,  an
increase of $13.3  million.  This  increase was  primarily  attributable  to the
increase in depreciable and amortizable  assets resulting from the 1996 and 1997
acquisitions  and, to a lesser  extent,  the impact of  increased  values  being
ascribed to FCC licenses in the  allocation  of purchase  prices of 1997 station
acquisitions.

                                       21
<PAGE>

Results of Operations - (continued):

Corporate general and administrative  expenses increased to $2.7 million for the
three months ended  September  30, 1997,  from $1.3 million for the three months
ended  September 30, 1996, an increase of $1.4 million or 107.7%.  This increase
was  primarily  attributable  to the  higher  personnel  costs  associated  with
supporting the Company's greater number of stations and tower properties.

Interest expense was $16.8 million for the three months ended September 30, 1997
compared to $6.3 million for the 1996 period, an increase of $10.5 million.  The
increase  is related  to higher  borrowing  levels  under the  Company's  credit
agreements  in 1997 as  compared to 1996 which  resulted  from the 1996 and 1997
acquisitions.

Interest  income was $0.4 million for the three months ended  September 30, 1997
compared to $1.1  million for the three  months  ended  September  30,  1996,  a
decrease of $0.7 million.  The decrease is attributable to lower investable cash
balances in 1997 and higher interest income earned on certain station investment
notes in 1996 as compared to 1997.

The income tax benefit for the three  months ended  September  30, 1997 was $0.4
million as compared to the tax  provision of $1.5 million for three months ended
September 30, 1996. The effective tax rate for the three months ended  September
30, 1997 was  approximately  55.3%  compared to 62.0% in 1996. The effective tax
rate  for the  three  months  ended  September  30,  1997 is  reflective  of the
cumulative  adjustment  required to maintain the estimated annual effective rate
of 55.2%.  The  effective  rate in 1996 and 1997 is  reflective of the impact of
permanent differences,  principally  amortization of non-deductible  goodwill on
certain stock acquisitions.

Preferred  stock  dividends  for the three months ended  September 30, 1997 were
$8.5 million compared to $2.4 million in 1996. The dividends for the 1997 period
include $2.4  million of dividends  attributable  to the  Convertible  Preferred
Stock issued in late June 1996 and $6.1 million of dividends attributable to the
Cumulative  Exchangeable  Preferred  Stock  issued  in late  January  1997.  The
dividends for the 1996 dividends are  attributable to the Convertible  Preferred
Stock.

Net loss applicable to common stockholders was $8.8 million for the three months
ended  September  30, 1997  compared to $1.5  million for the three months ended
September 30, 1996, as a result of the factors discussed above.


Nine months ended September 30, 1997 and 1996

Net revenues  were $260.5  million for the nine months ended  September 30, 1997
compared  to $113.6  million  for the same nine  months in 1996,  an increase of
$146.9 million or 129.3%.  This increase was  attributable  to revenue growth in
some of the Company's  existing markets and, to a more substantial  extent,  the
impact of the EZ Merger in 1997 and  acquisitions  that  occurred  in the latter
half of 1996 and first nine months of 1997.

Station operating  expenses  excluding net local marketing  agreement  expenses,
depreciation and amortization and corporate general and administrative  expenses
were $172.0  million for the nine months ended  September  30, 1997  compared to
$78.2  million  for the same period in 1996,  an  increase  of $93.8  million or
119.9%.  This increase was due to the impact of increased costs  associated with
the Company's revenue growth.

Net local  marketing  agreement  expenses  were $1.9 million for the nine months
ended  September  30, 1997  compared to $4.9 million for the same nine months in
1997, a decrease of $3.0 million.  Local  marketing  agreement  expenses for the
nine months ended September 30, 1997 and 1996 are presented net of approximately
$2.6  million and $1.3  million,  respectively,  of revenues  earned  under such
agreements.  The change in the  balances  for each period  reflect the timing of
pending station acquisitions and dispositions.

                                       22
<PAGE>


Results of Operations - (continued):

Depreciation  and  amortization was $43.0 million and $11.0 million for the nine
months ended  September  30, 1997 and 1996,  respectively,  an increase of $32.0
million. This increase was primarily attributable to the increase in depreciable
and amortizable  assets resulting from the 1996 and 1997  acquisitions and, to a
lesser extent,  the impact of increased values being ascribed to FCC licenses in
the allocation of purchase prices of 1997 station acquisitions.

Corporate general and administrative  expenses increased to $6.6 million for the
nine months ended September 30, 1997 from $3.6 million for the nine months ended
September  30,  1996,  an increase of $3.0 million or 83.3%.  This  increase was
primarily  attributable to the higher personnel costs associated with supporting
the Company's greater number of stations and tower properties.

Interest  expense was $40.1 million for the nine months ended September 30, 1997
compared to $15.2  million for the 1996 period,  an increase of $24.9 million or
163.8%.  The increase is related to higher  borrowing levels under the Company's
credit  agreements in 1997 as compared to 1996 which  resulted from the 1996 and
1997 acquisitions.

Interest  income was $1.5 million for the nine months ended  September  30, 1997
compared  to $4.7  million for the nine  months  ended  September  30,  1996,  a
decrease of $3.2 million.  The decrease is attributable to lower investable cash
balances in 1997 and higher interest income earned on certain station investment
notes in 1996 as compared to 1997.

The income tax  benefit for the nine months  ended  September  30, 1997 was $0.8
million as  compared  to a  provision  of $3.0  million  for nine  months  ended
September 30, 1996.  The effective tax rate for the nine months ended  September
30, 1997 was approximately 55.2% compared to 52.4% in 1996. The higher effective
rate  in  1997  is due to  the  effect  of  permanent  differences,  principally
amortization of non-deductible goodwill on the EZ merger.

The  extraordinary  loss for the nine months ended  September  30, 1997 was $1.6
million,  net of a $1.0 million tax benefit. The extraordinary loss was a result
of certain deferred  financing costs written off in January 1997 pursuant to the
extinguishment of debt under the Company's previous credit agreement.

Preferred  stock  dividends  for the nine months ended  September  30, 1997 were
$22.8  million  compared to $2.6 million for the 1996 period.  The dividends for
the  1997  period  include  $7.2  million  of  dividends   attributable  to  the
Convertible  Preferred  Stock  issued in late June  1996 and  $15.6  million  of
dividends attributable to the Cumulative  Exchangeable Preferred Stock issued in
late January 1997. The dividends for the 1996 dividends are  attributable to the
Convertible Preferred Stock.

Net loss applicable to common stockholders was $25.0 million for the nine months
ended   September  30,  1997  compared  to  net  income   applicable  to  common
stockholders  of $0.1 million for the nine months ended September 30, 1996, as a
result of the factors discussed above.


Liquidity and Capital Resources

The Company's  liquidity  needs arise from its  acquisition-related  activities,
debt service, working capital, capital expenditures and preferred stock dividend
payments. Historically, the Company has met its operational liquidity needs with
internally   generated   funds  and  has  financed  the   acquisition  of  radio
broadcasting properties and tower related properties,  including related working
capital needs,  with a combination of bank borrowings and proceeds from the sale
of the Company's equity and debt securities. For the nine months ended September
30, 1997, cash flows from operating  activities were $29.6 million,  as compared
to $18.5  million for the nine months ended  September  30, 1996.  The change is
primarily  attributable  to  working  capital  investments  related  to  station
acquisition and growth.

                                       23
<PAGE>

Liquidity and Capital Resources - (continued)

Cash flows used for investing activities were $529.2 million for the nine months
ended September 30, 1997 as compared to $382.7 million for the nine months ended
September 30, 1996. The increase is  attributable  to the increased  acquisition
activity in 1997 as compared to 1996.

Cash  provided by financing  activities  was $503.0  million for the nine months
ended September 30, 1997 as compared to $374.9 million for the nine months ended
September 30, 1996.  The increase in 1997 is due to the  exchangeable  preferred
stock offering  described below and the impact of borrowings under the Company's
credit agreements. 

Pending Sale of Radio Operations and Tower Distribution:  In September 1997, ARS
entered  into  a  merger  agreement  with  Westinghouse,  pursuant  to  which  a
subsidiary  of  Westinghouse  will merge with and into ARS,  each  holder of ARS
common stock at the effective  time of the Merger will receive  $44.00 per share
in cash, and ARS will become a subsidiary of Westinghouse. As a condition to the
Merger,  ARS  will  distribute  all  of the  outstanding  shares  of  the  Tower
Subsidiary's  (ATS, Tower or Tower Subsidiary)  common stock owned by ARS to the
holders of record of ARS common  stock at or about the time of the Merger.  As a
result of the  Tower  Distribution,  ATS will  cease to be a  subsidiary  of, or
otherwise be affiliated with, ARS and will thereafter  operate as an independent
publicly held company.  ARS and ATS will enter into certain agreements  pursuant
to  the  Merger  agreement  providing  for,  among  other  things,  the  orderly
separation of ARS and ATS, certain closing date  adjustments  based on ARS' debt
levels and working  capital  (current  assets  less  defined  liabilities),  the
transfer of lease  obligations to ATS of leased space on certain towers owned or
leased by ARS to ATS, and the allocation of certain tax liabilities  between ARS
and ATS. The Tower  Distribution  will result in a taxable gain to ARS, of which
approximately  $20.0  million will be borne by  Westinghouse,  and the remaining
obligation  currently  estimated at approximately $30.0 to $40.0 million will be
required to be borne by ATS pursuant to provisions to the Merger agreement.

The Company incurred  approximately  $0.3 million in merger expenses in the nine
months ended  September  30, 1997,  principally  related to  professional  fees.
Additional  professional fees, regulatory related costs, investment banking fees
and  other  costs  will  be  expensed  as  incurred   and  are  expected  to  be
approximately $8.0 to $10.0 million for the year ended December 31, 1997.

Offering:  In January  1997,  the  Company  consummated  a private  offering  of
2,000,000  shares of the  Exchangeable  Preferred  Stock.  Net  proceeds  to the
Company from the offering were  approximately  $192.1  million.  Proceeds of the
offering were used to repay indebtedness and to fund acquisitions.  Dividends on
the  Exchangeable  Preferred  Stock are  cumulative at an annual rate of 11 3/8%
(equivalent to $11.375 per share) and are payable  quarterly in cash, or, at the
Company's  election,  on or prior to January  15,  2002,  with the  issuance  of
additional  shares.  The  Exchangeable   Preferred  Stock  possesses   mandatory
redemption  features  and  has  been  classified  accordingly  in the  financial
statements.  See the Form 10-K for a description of the  Exchangeable  Preferred
Stock.

Credit  Agreements:  As of  September  30, 1997,  the Company had  approximately
$809.0 million of total long-term debt  (including the current portion  thereof)
outstanding.   This  included   approximately   $478.0   million  of  borrowings
outstanding under the Company's and the Tower Subsidiary's credit agreements and
$325.0 million outstanding under Senior Subordinated Notes. In January 1997, the
Company  entered  into the 1997 Credit  Agreement  which  replaced  the previous
$300.0  million  credit  agreement.  The 1997 Credit  Agreement  consists of two
separate  agreements,  providing for  facilities  consisting of a $550.0 million
reducing revolver credit facility,  a $200.0 million revolving credit converting
to a term loan facility and a $150.0 million term loan facility,  which had been
available only to repurchase, if required,  certain note obligations of EZ which
were  assumed by the  Company in  connection  with the EZ Merger.  As  described
below,  the Company was not required to repurchase  any of the 9.75% Notes,  and
therefore  such facility was canceled in May 1997.  The terms of the 1997 Credit
Agreement are described in the Form 10-K.

                                       24
<PAGE>

Liquidity and Capital Resources - (continued):

In  October  1997,  the  Tower  Subsidiary  entered  into the  1997  ATS  Credit
Agreement,  which replaced the previously existing credit agreement. All amounts
outstanding under the previous agreement were repaid with proceeds from the 1997
ATS  Credit  Agreement.  The  1997  ATS  Credit  Agreement  provides  the  Tower
Subsidiary  with a $250.0  million  loan  commitment  based  on ATS  maintaining
certain  operational  ratios  and  an  additional  $150.0  million  loan  at the
discretion of ATS, which is available  through June 2005.  Following the closing
of the 1997 ATS Credit Agreement and repayment of amounts  outstanding under the
previous agreement,  ATS incurred an extraordinary loss in the fourth quarter of
approximately  $1.1 million which will be recorded net of the applicable  income
tax benefit,  representing  the write-off of deferred  financing fees associated
with the previous agreement.

In order to finance acquisitions of radio stations, tower related properties and
for general corporate purposes, the Company has borrowed and expects to continue
to borrow  under its credit  agreements.  As part of the EZ Merger,  the Company
assumed EZ's obligations with respect to $150.0 million  principal amount of the
9.75%  Notes  and  repaid  all  borrowings  under the EZ  credit  facility  with
borrowings from the 1997 Credit Agreement.  As required by the closing of the EZ
Merger, the Company was required to offer to purchase the 9.75% Notes at 101% of
their principal  amount.  Such offer expired in May 1997 and, no such notes were
tendered for repurchase.

A substantial portion of the Company's cash flow from operations is required for
debt  service.  However,  the Company's  leverage  could make it vulnerable to a
downturn in the operating  performance of its radio stations or tower properties
or a downturn in economic conditions.

The Company  believes that its cash flows from  operations will be sufficient to
meet its  quarterly  dividends,  debt  service  requirements  for  interest  and
scheduled  payments of principal under the 1997 Credit  Agreements and its other
debt obligations.  If such cash flow is not sufficient to meet such debt service
requirements,  the Company may be required to sell equity securities,  refinance
its  obligations  or dispose of one or more of its  properties  in order to make
such  scheduled  payments.  There can be no assurance  that the Company would be
able to effect any of such transactions on favorable terms.

The Company's  working  capital needs  fluctuate  throughout the year due to the
broadcast  industry-wide  seasonality  and its  broadcast of sporting  events at
different  times during the year.  The Company  historically  has had sufficient
cash from its  operations to meet its working  capital  needs,  apart from needs
generated by newly  acquired  properties,  and believes  that it has  sufficient
financial  resources  available  to it,  including  borrowing  under the  credit
agreements, to finance operations for the foreseeable future.

The Company has entered into numerous station and tower  acquisition and related
agreements  (see the  Form  10-K and the  Notes  to the  Condensed  Consolidated
Financial  Statements).  The consummation of each of these agreements is subject
to, among other  things,  FCC approval and in some cases  expiration  or earlier
termination  of the HSR Act waiting  period and the  negotiation  of  definitive
agreements.  Unless  otherwise  noted,  the Company intends to effect all of the
transactions  as soon as the  necessary  approvals  are  obtained.  The  Company
intends to finance the  acquisitions  with available cash,  borrowings under the
credit agreements, and, in certain cases, issuance of equity securities.

The Company made approximately $28.4 million in capital expenditures in the nine
months ended September 30, 1997,  principally  related to tower construction and
office  consolidations.  The Company expects capital  expenditures in 1997 to be
approximately $35.0 million,  consisting principally of tower site construction,
certain office consolidations and ongoing technical improvements.  To the extent
that funds generated from  operations,  or available  cash, are  insufficient to
finance non-recurring capital expenditures, the Company would seek to borrow the
necessary funds under the credit agreements.

                                       25

<PAGE>

Inflation

The impact of inflation on the Company's  operations has not been significant to
date.  However,  there can be no assurance  that a high rate of inflation in the
future  would  not have  material  adverse  effect  on the  Company's  operating
results.

Recent Accounting Pronouncements

In  March  1997,  the  Financial  Accounting  Standards  Board  (FASB)  released
Statement of Financial Accounting Standards (FAS) No. 128, "Earnings Per Share",
(FAS 128) which the Company  will adopt in the fourth  quarter of 1997.  FAS 128
will require the Company to restate all previously  reported  earnings per share
information to conform with the new pronouncement's requirements.

In June 1997,  the FASB released FAS No. 130  "Reporting  Comprehensive  Income"
(FAS No. 130), and FAS No. 131 "Disclosures about Segments of and Enterprise and
Related Information", (FAS 131). These pronouncements will be effective in 1998.
FAS 130 establishes standards for reporting  comprehensive income items and will
require that the Company provide a separate  statement of comprehensive  income;
reported financial statement amounts will not be affected by this adoption.  FAS
131 established standards for reporting information about the operating segments
in its annual report and interim reports.

                                       26
<PAGE>

PART II.   OTHER INFORMATION

Item 1. - Legal Proceedings

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

Item 4. - Submission of Matters to a Vote of Security Holders

On  September  19,  1997,  holders of Class A Common  Stock,  par value $.01 per
share,  and Class B Common Stock,  par value $.01 per share  (collectively,  the
Common Stock) of American Radio Systems Corporation (American), owning of record
shares  representing  in excess of 50% of the  combined  voting power of all the
outstanding Common Stock as of September 19, 1997, consented in writing pursuant
to  Sections  228 and 251 of the  Delaware  General  Corporation  Law to (i) the
approval  and  adoption  of the  Agreement  and  Plan of  Merger,  by and  among
American,   Westinghouse  Electric  Corporation,   a  Pennsylvania   corporation
(Westinghouse),  and R Acquisition  Corp., a Delaware  corporation  and a wholly
owned  subsidiary of Westinghouse  (Merger Sub),  dated as of September 19, 1997
(the Merger  Agreement) and the transactions  contemplated  thereby and (ii) the
approval  of the  distribution  by  American  of all of  the  capital  stock  of
American's wholly-owned subsidiary, American Tower, owned by American (or of the
net proceeds from the sale thereof) to the common  stockholders of American on a
pro rata basis as contemplated by the terms of the Merger Agreement. Pursuant to
the terms of the Merger  Agreement,  at the  Effective  Time (as  defined in the
Merger Agreement), Merger Sub will be merged with and into American (the Merger)
and common stockholders of American will be entitled to receive $44.00 per share
in cash for each of their  shares  of the  Common  Stock.  

Because  stockholders  owning of record shares  representing in excess of 50% of
the voting power of the  outstanding  Common Stock of American  have given their
written  consent to the  approval and  adoption of the Merger  Agreement,  their
written consent was sufficient to approve and adopt the Merger Agreement and the
transactions  contemplated  thereby under the Delaware  General  Corporation Law
without regard to the  consent/vote  of any other  stockholder of American.  For
this reason,  American did not call a meeting of the stockholders to vote on the
Merger Agreement nor did American ask its stockholders for a proxy.

Item 5. - Other Information.

On  October  31,  1997,  the  Tower   Subsidiary   consummated  the  transaction
contemplated by the Asset Purchase Agreement,  dated July 8, 1997, with Suburban
Cable TV Co. Inc., and its subsidiaries, (a Pennsylvania corporation),  pursuant
to which the  Tower  subsidiary  acquired  substantially  all the  assets of the
sellers wholly-owned  subsidiary,  MicroNet,  Inc., an antenna site provider and
owner  of  towers  based  in  Jamison,  Pennsylvania  for a  purchase  price  of
approximately  $70.25  million.


                                       27
<PAGE>


Item 6. - Exhibits and Reports on Form 8-K

(a)       Exhibits

Listed  below  are the  exhibits  which  are  filed  as part of this  Form  10-Q
(according to the number  assigned to them in Item 601 of Regulation  S-K). Each
exhibit  market by a (*) is  incorporated  by reference to American's  Report on
Form 10-Q for the  fiscal  quarter  ended  June 30,  1997.  Exhibit  numbers  in
parenthesis refer to the exhibit number in the applicable filing.

<TABLE>
<CAPTION>

Exhibit
  No.                            Description of Document
-------                          -----------------------
<S>             <C>                                                             <C>
2.1              Agreement and Plan of Merger by and among the Company,
                     Westinghouse Electric Corporation and R Acquisition
                     Corp., dated September 19, 1997                              Incorporated by reference herein from
                                                                                  the Company's Form 8-K/A dated
                                                                                  October 24, 1997 (2.1)
10.1             Asset Purchase Agreement by and between American Tower
                     Systems, Inc. ("American Tower") and Tucson
                     Communications Company, L.P., dated as of October 4,
                     1997                                                         Filed herewith as Exhibit 10.1
10.2             Asset Purchase Agreement by and between American Tower
                     and Tower Sites, Inc., dated as of June 25, 1997             Filed herewith as Exhibit 10.2
10.3             Asset Purchase Agreement by and between American Tower
                     and Southeast Communications, Inc., dated as of  July 31,
                     1997                                                         Filed herewith as Exhibit 10.3
10.4             Asset Purchase Agreement by and between American Tower
                     and Diablo Communications, Inc. ("Diablo"), dated as of
                     July 8, 1997                                                 (*10.4c)
10.5             Asset Purchase Agreement by and between American Tower
                     and Diablo Communications of Southern California
                     ("DCSC"), dated as of July 8, 1997                           (*10.4c)
10.6             Stock Purchase Agreement by and among American Tower,
                     OPM-USA-INC. ("OPM") and the Stockholders of OPM,
                     dated as of September 30, 1997                               Filed herewith as Exhibit 10.6
10.7             Note Purchase Agreement by and between American Tower
                     and OPM, dated  September 30, 1997 relating to Notes
                     due 2000 of OPM                                              Filed herewith as Exhibit 10.7
10.8             Amendment dated August 7, 1997, to Securities Purchase
                     Agreement by and between American Tower, Diablo and
                     DCSC, dated July 8, 1997                                     (*10.4e)
10.9             Time Brokerage Agreement by and between the Company and
                     Precision Media Corporation, dated July 1, 1997              (*10.6)
10.10            Asset Exchange Agreement by and among the Company,
                     American Radio License Corp. ("License Corp."),
                     Entertainment Communications, Inc. and ECI License
                     Company, L.P., dated July 18, 1997                           (*10.13)
10.11            Asset Purchase Agreement by and among the Company,
                     License Corp. and Entertainment Communications, Inc.,
                     dated July 18, 1997                                          (*10.14)
10.12            Asset Purchase Agreement by and between American Tower
                     and Suburban Cable T.V. Co., Inc., dated July 8, 1997        (*10.15)
10.13            Asset Purchase Agreement by and among Citicastors Co., the
                     Company and License Corp., dated October 9, 1997             Filed herewith as Exhibit 10.13
10.14            Asset Purchase Agreement by and between the Company and
                     Classic Broadcasting, Inc., dated September 24, 1997         Filed herewith as Exhibit 10.14

                                       28


<PAGE>

<CAPTION>

Item 6. - Exhibits and Reports on Form 8-K - (Continued)

Exhibit
   No.                           Description of Document
------                           -----------------------

<S>             <C>                                                             <C>
                                                              
10.15            Agreement to Amend Asset Purchase Agreement by and
                     between the Company and Paxson Communciations of
                     West Palm Beach, Inc., dated October 3, 1997                 Filed herewith as Exhibit 10.15
10.16            Asset Purchase Agreement by and among the Company,
                     License Corp. and James Crystal Enterprises, L.C., dated
                     October 24, 1997                                             Filed herewith as Exhibit 10.16
10.17            Amended and Restated Loan Agreement by and among
                     American Tower, Toronto Dominion (Texas), Inc. and the
                     Lenders named therein, dated as of October 15, 1997          Filed herewith as Exhibit 10.17
10.18            Asset Purchase Agreement by and among Missouri Sports
                     Radio L.L.C., Professional Broadcasting, Incorporated
                     and EZ St. Louis, Inc., dated September 30, 1997             Filed herewith as Exhibit 10.18
11               Statement Re Computation of Per Share Earnings                   Filed herewith as Exhibit 11
12               Statement Re Computation of Ratio of Earnings to be
                     Combined Fixed Charges and Preferred Stock Dividends         Filed herewith as Exhibit 12
27               Financial Data Schedule                                          Filed herewith as Exhibit 27

</TABLE>

(b)      Reports on Form 8-K

1     Form 8-K (Items 5 and 7) on July 14, 1997
2     Form 8-K (Items 5 and 7) on August 22, 1997
3     Form 8-K (Items 5 and 7) on September 26, 1997
4.    Form 8-K (Items 5 and 7) on October 16, 1997
5.    Form 8-K/A (Items 5 and 7) on October 24, 1997



                                       29


<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



                                         AMERICAN RADIO SYSTEMS CORPORATION

Date: November 14, 1997          BY:

                                         Joseph L. Winn
                                         Treasurer & Chief Financial Officer
                                         (Duly Authorized Officer)



Date: November 14, 1997          BY:

                                         Justin D. Benincasa
                                         Vice President & Corporate Controller
                                         (Duly Authorized Officer)




                                       30