<PAGE>

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

                                  FORM 10-K/A
                               (AMENDMENT NO. 1)

               [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the fiscal year ended December 31, 2000
                         Commission File No. 333-30795

                                      OR

         [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
            FOR THE TRANSITION PERIOD FROM            TO

                                RADIO ONE, INC.
            (Exact name of registrant as specified in its charter)

                                   Delaware
                        (State or other jurisdiction of
                        incorporation or organization)
                                  52-1166660
                     (I.R.S. Employer Identification No.)

                         5900 Princess Garden Parkway,
                                   7th Floor
                            Lanham, Maryland 20706
                   (Address of principal executive offices)

                                (301) 306-1111
              Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Class A Common
Stock, $.001 par value
                                       Class D Common Stock, $.001 par value

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 [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [X]

The number of shares outstanding of each of the issuer's classes of common
stock, as of March 23, 2001 is as follows:

<TABLE>
<CAPTION>
                    Class             Outstanding at March 23, 2001
                    -----             -----------------------------
        <S>                           <C>
        Class A Common Stock, $.001
         par value                             22,529,344
        Class B Common Stock, $.001
         par value                              2,867,462
        Class C Common Stock, $.001
         par value                              3,132,458
        Class D Common Stock, $.001
         par value                             58,345,644
</TABLE>

Based on the average of the bid and asked prices on the Nasdaq Stock Market's
National Market on March 23, 2001 of $15.41 for our class A common stock, and
$14.00 for our class D common stock, the aggregate market value of our voting
and non-voting equity held by non-affiliates on such date was approximately
$906.2 million. Shares of common stock held by directors and certain executive
officers and by each person who owns or may be deemed to own 10% or more of
our outstanding common stock have been excluded, since such persons may be
deemed to be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.

                      DOCUMENTS INCORPORATED BY REFERENCE
Portions of our definitive proxy statement for the 2001 annual meeting of
stockholders, which will be filed with the SEC within 120 days after the end
of the fiscal year to which this annual report relates, are incorporated by
reference into Part III of this report.

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<PAGE>

                        RADIO ONE, INC. AND SUBSIDIARIES

                                  Form 10-K/A
                               (Amendment No. 1)
                  For the Fiscal Year Ended December 31, 2000

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
 <C>         <S>                                                           <C>
 PART I
    Item 1.  Business...................................................     3
    Item 2.  Properties and Facilities..................................    32
    Item 3.  Legal Proceedings..........................................    33
    Item 4.  Submission of Matters to a Vote of Security Holders........    33
 PART II
             Market for Registrant's Common Equity and Related
    Item 5.   Stockholder Matters.......................................    34
    Item 6.  Selected Financial Data....................................    36
    Item 7.  Management's Discussion and Analysis of Financial Condition
              and Results of Operations.................................    38
    Item 7A. Quantitative and Qualitative Disclosure About Market Risk..    46
    Item 8.  Financial Statements and Supplementary Data................    46
    Item 9.  Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosure..................................    46
 PART III
    Item 10. Directors and Executive Officers of the Registrant.........    47
    Item 11. Compensation of Directors and Executive Officers...........    47
             Security Ownership of Certain Beneficial Owners and
    Item 12.  Management................................................    47
    Item 13. Certain Relationships and Related Transactions.............    47
 PART IV
             Exhibits, Financial Statement Schedules, and Reports on
    Item 14.  Form 8-K..................................................    48
 SIGNATURES..............................................................   51
 Report of Independent Public Accountants................................  F-1
 Consolidated Balance Sheets as of December 31, 1999 and 2000............  F-2
 Consolidated Statements of Operations for the years ended December 31,
  1998, 1999 and 2000....................................................  F-3
 Consolidated Statements of Changes in Stockholders' Equity for the years
  ended December 31, 1998, 1999 and 2000.................................  F-4
 Consolidated Statements of Cash Flow for the years ended December 31,
  1998, 1999 and 2000....................................................  F-5
 Notes to Consolidated Financial Statement...............................  F-6
 INDEX TO SCHEDULES......................................................  S-1
</TABLE>

                                       2
<PAGE>

                                    PART I

ITEM 1. BUSINESS

   Unless otherwise noted, the terms "Radio One," "we," "our" and "us" refer
to Radio One, Inc. and our subsidiaries.

   Radio One was founded in 1980 and is the seventh largest radio broadcasting
company in the United States based on pro forma 2000 gross revenue. We are
also the largest radio broadcasting company in the United States primarily
targeting African-Americans. After we complete our pending acquisitions and
divestitures, including our acquisition of Blue Chip Broadcasting, Inc., we
will own and/or operate 63 radio stations in 22 markets. Thirty-four of these
stations (24 FM and 10 AM) are in 14 of the top 20 African-American radio
markets: Washington, D.C., Los Angeles, Detroit, Atlanta, Philadelphia,
Houston, Miami, Baltimore, Dallas, St. Louis, Cleveland, Boston, Richmond and
Charlotte.

   Our strategy is to expand within our existing markets and into new markets
that have a significant African-American presence. We believe radio
broadcasting primarily targeting African-Americans has significant growth
potential. We also believe that we have a competitive advantage in the
African-American market and the radio industry in general, due to our primary
focus on urban formats, our skill in programming and marketing these formats,
and our turnaround expertise.

   Radio One is led by our Chairperson and co-founder, Catherine L. Hughes,
and her son, Alfred C. Liggins, III, our Chief Executive Officer and
President, who together have over 40 years of operating experience in radio
broadcasting. Ms. Hughes, Mr. Liggins and our strong management team have
successfully implemented a strategy of acquiring and turning around
underperforming radio stations. We believe that we are well positioned to
apply our proven operating strategy to many of our recently or soon to be
acquired stations in Los Angeles, Philadelphia, Houston, Miami, Dallas,
Cleveland, Boston, Charlotte, Raleigh-Durham, Cincinnati, Columbus,
Indianapolis, Augusta, Dayton, Louisville and Minneapolis, and to other radio
stations in existing and new markets as attractive acquisition opportunities
arise.

Common Stock Public Offering

   On March 8, 2000, we completed a public offering of 5.0 million shares of
our class A common stock from which we received net proceeds of approximately
$336.0 million. We used these proceeds to fund acquisitions and for other
general corporate purposes.

Stock Split/Class D Common Stock Dividend

   On May 22, 2000, we declared a three-for-one stock split in the form of a
stock dividend. On June 6, 2000, the stockholders of record as of May 30, 2000
of each share of our class A common stock, class B common stock and class C
common stock received two shares of newly-created non-voting class D common
stock.

Convertible Preferred Stock Offering

   On July 11, 2000, we completed an offering of 310,000 shares of our 6 1/2%
Convertible Preferred Remarketable Term Income Deferrable Equity Securities
(HIGH TIDES) from which we received net proceeds of approximately $299.9
million. We used these proceeds to fund acquisitions and for other general
corporate purposes. On October 16, 2000 and on January 16, 2001, we paid the
first two quarterly dividends on the HIGH TIDES, each in the amount of $16.25
per share, for an aggregate dividend payment on each date of approximately
$5.0 million. On March 16, 2001, we declared the next $16.25 per share
quarterly dividend on the HIGH TIDES, and that dividend, in the aggregate
amount of approximately $5.0 million, will be paid on April 16, 2001.


                                       3
<PAGE>

Clear Channel/AMFM Acquisitions

   On August 25, 2000, we completed our acquisition of 12 radio stations from
Clear Channel and AMFM for an aggregate purchase price of approximately $1.3
billion. The acquired stations are located in the following seven markets: Los
Angeles, Houston, Miami, Dallas, Cleveland, Raleigh-Durham and Greenville,
although we have subsequently divested the station located in Greenville.

   As a result of our acquisition of the Clear Channel and AMFM radio stations
(and the subsequent Greenville divestiture), we serve five new markets, three
of which are top 10 African-American radio markets. These new markets have
complemented our station portfolio by greatly increasing its geographic
diversity and national reach. Due to this increased geographic diversity, we
have reduced significantly our reliance on any single market.

Blue Chip Broadcasting Acquisition

   On February 7, 2001, we entered into a definitive agreement to acquire Blue
Chip Broadcasting, Inc. for an aggregate purchase price of approximately
$190.0 million in cash, stock and the assumption of outstanding debt. The cash
component of the purchase price will be not less than $25.0 million, and may
be up to $50.0 million, at our election; the assumption of outstanding debt is
expected to be approximately $50 million; and the remainder of the purchase
price shall be paid in shares of our class D common stock, with each share
valued at $14.00. Blue Chip owns and/ or operates 16 radio stations in the
following five markets: Cincinnati, Columbus, Dayton, Louisville and
Minneapolis. We currently have no operations in any of these markets, and the
stations are complementary to our existing business.

Station Portfolio

   We operate in many of the largest African-American markets. Since January
1, 2000, we have acquired or agreed to acquire and/or operate 43 radio
stations and have divested or agreed to divest six non-core stations. A more
detailed description of the acquisitions and divestitures of these stations is
provided in this report under the heading "Recent and Pending Transactions."
The acquisitions diversify our net broadcast revenue, broadcast cash flow and
asset bases and increase the number of top 20 African-American markets in
which we operate from 9 to 14.

   The table below provides information about the stations that we will own or
operate after giving effect to our pending acquisitions and divestitures.
Audience share data is for the 12+ demographic and is from the Arbitron Survey
four book averages ending with the Fall 2000 Arbitron Survey, except in the
Miami market, where we provide no audience share data because Arbitron does
not publish ratings information for our station. Revenue share data are from
either Radio Revenue Reports of Hungerford Aldrin Nichols & Carter, PC or
revenue reports prepared by Miller, Kaplan, Arase & Co., Certified Public
Accountants, except in the Miami and Boston markets where we do not currently
report revenue to either Hungerford Aldrin Nichols & Carter, PC or Miller,
Kaplan, Arase & Co. and for which we provide no information below. For station
by station audience share and revenue share information, see the information
provided in this report in the table under the heading "Our Station
Portfolio." In the Miami and Dayton markets, no stations that we own or
operate are urban-formatted, and in the Minneapolis market, no market wide
racial/ethnic audience composition information is currently available.
Accordingly, African-American market audience share rank and revenue rank are
not included in the table for those markets. Except as otherwise noted above,
information in the table below is from BIA Investing in Radio Market Report
("BIA 2000 Fourth Edition"). Markets with pending acquisitions are denoted by
an asterisk (*).


                                       4
<PAGE>

                           Radio One and Our Markets

<TABLE>
<CAPTION>
                                         Radio One                                        Market Data
                   ----------------------------------------------------- ----------------------------------------------
                   Number of African-American
                   Stations       Market            Entire Market                                 1998 MSA Population
                   --------- ---------------- --------------------------                        -----------------------
                                               Four Book
                                                Average                   Estimated  Ranking by
                                              (Ending Fall               2000 Annual  Size of
                             Audience             2000)      January-       Radio     African-
                              Share   Revenue   Audience   December 2000   Revenue    American      Total     African-
Market              FM   AM    Rank    Rank      Share     Revenue Share ($millions) Population (in millions) American%
------             ---- ---- -------- ------- ------------ ------------- ----------- ---------- ------------- ---------
<S>                <C>  <C>  <C>      <C>     <C>          <C>           <C>         <C>        <C>           <C>
Washington, DC....    2    2     1        1       11.1          9.5        $375.0         3          4.3        26.6%
Los Angeles.......    1   --     1        1        2.9          4.3         851.0         4         12.5         9.0
Detroit...........    2    1     2        3        5.5          3.6         268.6         5          4.6        21.7
Atlanta...........    2   --     2        3        6.6          5.0         400.0         6          3.8        26.0
Philadelphia......    2   --     2        2        5.9          6.0         321.0         7          4.9        20.2
Houston...........    2   --     1        1       12.9         13.2         317.5         8          4.4        18.3
Miami.............   --    1   n/a      n/a        n/a          n/a         277.6         9          3.7        19.8
Baltimore.........    2    2     1        1       17.2         23.2         137.8        10          2.5        27.8
Dallas............    2   --     2        2        4.3          3.4         381.8        11          4.8        14.2
St.Louis..........    1   --     2        3        1.4          0.2         145.3        14          2.6        17.7
Cleveland.........    2    2     1        1       12.6         13.1         114.3        17          2.1        19.4
Boston............    1    1     1        1        2.9          n/a         359.2        18          3.9         7.9
Richmond*.........    4    1     1        1       24.5         21.2          54.6        19          1.0        30.1
Charlotte.........    1   --     2        2        3.5          2.1         119.4        20          1.4        20.5
Raleigh-Durham....    4   --     1        1       19.6         16.7          85.0        23          1.1        24.0
Cincinnati*.......    1    1     1        1        6.1          4.7         139.4        29          2.0        11.6
Columbus*.........    3   --     1        1       11.9          9.4          96.9        32          1.5        13.1
Indianapolis*.....    3    1     1        2       11.1          6.0          96.1        33          1.4        14.2
Augusta...........    4    1     1        1       15.8         13.7          17.5        43          0.5        33.4
Dayton*...........    3    1   n/a      n/a       11.1         16.7          44.0        47          1.0        14.1
Louisville*.......    6   --     1        1       24.6         20.4          56.6        51          1.0        12.9
Minneapolis*......    1   --   n/a      n/a        2.8          0.4         183.3        52          2.8         4.8
                   ---- ----
Total.............   49   14
                   ==== ====
</TABLE>

The African-American Market Opportunity

   We believe that operating urban formatted radio stations primarily
targeting African-Americans has significant growth potential for the following
reasons:

  Rapid African-American Population Growth. From 1980 to 1999, the African-
  American population increased from approximately 26.7 million to 34.9
  million, a 30.7% increase, compared to a 20.4% increase in the population
  as a whole. Furthermore, the African-American population is expected to
  increase to approximately 39.9 million by 2010, a 14.3% increase from 1999,
  compared to an expected increase during the same period of 10.0% for the
  population as a whole. (Source: U.S. Census Bureau, Statistical Abstract of
  the United States: 2000).

  Higher African-American Income Growth. According to the U.S. Census Bureau,
  from 1990 to 1999, the rate of increase in median household income in 1999
  adjusted dollars for African-Americans was approximately 17.2% compared to
  6.9% for the population as a whole. (Source: U.S. Census Bureau, 2000).
  African-American buying power is estimated to reach $572.1 billion in 2001,
  up 85.9% from 1990, compared to an increase of 70.4% for the population as
  a whole. In 2001, African-Americans will account for 8.1% of the nation's
  total buying power, up from 7.4% in 1990. (Source: "Buying Power at the
  Beginning of a New Century: Projections for 2000 and 2001," Dr. Jeffrey M.
  Humphreys). In addition, the African-American consumer tends to have a
  different consumption profile than non-African-Americans. An

                                       5
<PAGE>

  annual report published by Target Market News provides a list of products
  and services for which African-Americans households spent more than white
  households. In the most recent such annual report, there were dozens of
  such products and services listed in categories such as apparel and
  accessories, books, cars and trucks, consumer electronics, food, personal
  care products, telephone service and transportation. (Source: The 2000
  Report on the Buying Power of Black America, Target Market News).

  Growth in Advertising Targeting the African-American Market. We believe
  that large corporate advertisers are becoming more focused on reaching
  minority consumers in the United States. The African-American and Hispanic
  communities are viewed as an emerging growth market within the mature
  domestic market. A 1997 study estimated that major national advertisers
  spent $881 million on advertising targeting African-American consumers, up
  from $463 million in 1985. (Source: Target Market News (Chicago, IL-1997)).
  We believe many large corporations are expanding their commitment to ethnic
  advertising.

  Growing Influence of African-American Culture. We believe that there is an
  ongoing "urbanization" of many facets of American society as evidenced by
  the influence of African-American culture in the areas of music (for
  example, hip-hop and rap music), film, fashion, sports and urban-oriented
  television shows and networks. We believe that companies as disparate as
  the News Corporation's Fox(R) television network, the sporting goods
  manufacturer Nike(R), the fast food chain McDonald's(R), and prominent
  fashion designers have embraced this urbanization trend in their products
  as well as their advertising messages.

  Growing Popularity of Radio Formats Primarily Targeting African-
  Americans. We believe that urban programming has been expanded to target a
  more diverse urban listener base and has become more popular with listeners
  and advertisers over the past ten years. The number of urban radio stations
  has increased from 284 in 1989 to 405 in 1999, or by 42.6%. (Source: The M
  Street Corp., Format Trends from 1989 to 1999, Counts as of November 1999.)
  In Fall 1997, urban formats were one of the top three formats in nine of
  the top ten radio markets nationwide and the top format in five of these
  markets. (Source: INTEREP, Research Division, 1998 Regional Differences in
  Media Usage Study).

  Concentrated Presence of African-Americans in Urban Markets. In 1998,
  approximately 65.6% of the African-American population was located in the
  top 50 African-American markets. (Source: BIA 2000, Fourth Edition).
  Relative to radio broadcasters targeting a broader audience, we believe we
  can cover the various segments of our target market with fewer programming
  formats and therefore fewer radio stations than the maximum per market
  allowed by the FCC.

  Strong African-American Listenership and Loyalty. In 1997, African-
  Americans in the ten largest markets listened to radio broadcasts an
  average of 26.5 hours per week. This compares to 21.5 hours per week for
  all Americans. (Source: INTEREP Research Division, 1999 Urban Radio Study).
  In addition, we believe that African-American radio listeners exhibit
  greater loyalty to radio stations that target the African-American
  community because those radio stations become a valuable source of
  entertainment and information responsive to the community's interests and
  lifestyles.

Acquisition Strategy

   Our acquisition strategy includes acquiring and turning around
underperforming radio stations principally in the top 50 African-American
markets. We will also make acquisitions in existing markets where expanded
coverage is desirable and in new markets where we believe it is advantageous
to establish a presence. For strategic reasons, or as a result of an
acquisition of multiple stations in a market, we may also acquire and operate
stations with formats that primarily target non-African-American segments of
the population.

                                       6
<PAGE>

                        RECENT AND PENDING TRANSACTIONS

   We have acquired or agreed to acquire and/or operate 43 radio stations and
one low power television station since January 1, 2000. These acquisitions
diversify our net broadcast revenue, broadcast cash flow and asset bases and
increase the number of top 20 African-American markets in which we operate
from 9 to 14. Since January 1, 2000, we have also divested or agreed to divest
six radio stations that were not core components of our business strategy.

   The table below sets forth information regarding each of the recently
completed or pending acquisitions and divestitures as of March 15, 2001.

<TABLE>
<CAPTION>
                                                      Approximate
                                                       Purchase
                                                         Price
                            No. of       Call             (in            Date
                           Stations     Letters        millions)       Completed
                           --------     -------       -----------      ---------
<S>                        <C>          <C>           <C>              <C>
Completed Acquisitions
 Philadelphia............       1       WPLY-FM        $    80.0          2/00
 Charlotte...............       1       WCCJ-FM             24.2(/1/)     6/00
 Augusta.................       5       WTHB-AM
                                        WAEG-FM
                                        WAKB-FM
                                        WAEJ-FM
                                        WFXA-FM
 Indianapolis I(/2/).....       3       WYJZ-FM             40.0(/3/)     6/00
                                        WHHH-FM
                                        WTLC-FM(/4/)
 Los Angeles.............       1       KKBT-FM          1,302.5(/5/)     8/00
 Houston.................       2       KMJQ-FM
                                        KBXX-FM
 Miami...................       1       WVCG-AM
 Dallas I................       1       KBFB-FM
 Cleveland...............       2       WZAK-FM
                                        WJMO-AM
 Raleigh-Durham..........       4       WFXC-FM
                                        WFXK-FM
                                        WNNL-FM
                                        WQOK-FM
 Greenville..............       1       WJMZ-FM(/6/)
 Dallas II...............       1       KJOI-AM(/7/)        16.0          9/00
 Greenville II...........       1       WPEK-FM(/8/)         7.5         11/00
 Dallas III..............       1       KTXQ-FM             52.5          2/01
 Boston..................       1       WILD-AM              5.0(/9/)     2/01
                             ----                      ---------
 Subtotal................      26                       $1,527.7
                             ----                      ---------
Pending Acquisitions
 Richmond III(/10/)......       4       WPLZ-FM(/11/)  $    34.0            --
                                        WCDX-FM
                                        WPZE-FM(/11/)
                                        WGCV-AM
 Cincinnati..............       2       WIZF-FM            190.0(/12/)      --
                                        WDBZ-AM(/13/)
 Columbus................       3       WCKX-FM
                                        WXMG-FM
                                        WJYD-FM
 Dayton..................       4       WGTZ-FM
                                        WING-FM
                                        WING-AM
                                        WKSW-FM
 Louisville..............       6       WDJX-FM
                                        WBLO-FM(/14/)
                                        WGZB-FM
                                        WULV-FM
                                        WMJM-FM
                                        WLRS-FM
 Minneapolis.............       1       KTTB-FM
 Indianapolis II.........       1       WTLC-AM              8.5(/15/)      --
                             ----                      ---------
 Subtotal................      21                          232.5
                             ----                      ---------
 Total...................      47(/16/)                $1,760.20
                             ====                      =========
</TABLE>

                                       7
<PAGE>

<TABLE>
<CAPTION>
                                                           Approximate
                                                           Sales Price
                                     No. of   Call             (in       Date
                                    Stations Letters        millions)  Completed
                                    -------- -------       ----------- ---------
<S>                                 <C>      <C>           <C>         <C>
Completed Divestitures
 Richmond I.......................      1    WDYL-FM          $ 9.0      2/01
 Richmond II......................      1    WARV-FM            1.0      2/01
 Greenville.......................      2    WJMZ-FM           43.5      2/01
                                             WPEK-FM
                                      ---                     -----
 Subtotal.........................      4                     $53.5
                                      ---                     -----
Pending Divestitures
 Kingsley, MI.....................      1    WJZZ-AM(/17/)    $ 0.2        --
 Dallas, TX.......................      1    KJOI-AM(/18/)     16.0
                                      ---                     -----
 Subtotal.........................      2                     $16.2
                                      ---                     -----
 Total............................      6                     $69.7
                                      ===                     =====
</TABLE>
--------
(/1/)  We paid approximately $20.7 million in cash and issued approximately
       57,000 shares of our class A common stock, valued as of the March 11,
       2000 definitive agreement date at $20.63 per share (after giving effect
       to the June 6, 2000 stock split), and approximately 115,000 shares of
       our class D common stock valued as of the March 11, 2000 definitive
       agreement date at $20.63 per share (after giving effect to the June 6,
       2000 stock split) in this transaction, which included one station in
       Charlotte and five stations in Augusta.
(/2/)  We also acquired low power television station W53AV in this
       transaction.
(/3/)  We paid approximately $30.0 million in cash and issued approximately
       441,000 shares of our class A common stock, valued as of the March 11,
       2000 definitive agreement date at $22.67 per share (after giving effect
       to the June 6, 2000 stock split), in this transaction.
(/4/)  Formerly known as WBKS-FM.
(/5/)  The approximate purchase price of $1.3 billion is for the 12 listed
       stations in Los Angeles, Houston, Miami, Dallas I, Cleveland, Raleigh-
       Durham and Greenville included in the Clear Channel/AMFM acquisitions.
(/6/)  We subsequently sold this station. See Completed Divestitures table.
(/7/)  Formerly known as KLUV-AM. We subsequently agreed to sell this station.
       See Pending Divestitures table.
(/8/)  We subsequently sold this station. See Completed Divestitures table.
(/9/)  We paid approximately $4.5 million in cash and issued approximately
       63,500 shares of our class A common stock, valued as of the October 27,
       2001 definitive agreement date at $7.88 per share, in this transaction.
(/10/) We entered into an agreement to acquire the four listed stations in
       Richmond in 1999. Pending completion of this acquisition, we are
       operating three stations, WPLZ-FM, WCDX-FM, and WPZE-FM, under a time
       brokerage agreement.
(/11/) WPLZ-FM was formerly known as WJRV-FM and WPZE-FM was formerly known as
       WPLZ-FM.
(/12/) The approximate consideration amount of $190.0 million is for the 16
       listed stations in Cincinnati, Columbus, Dayton, Louisville and
       Minneapolis and will be paid through a combination of cash, stock and
       assumption of debt, each in amounts to be determined upon the closing
       of the transaction.
(/13/) Upon completion of the transaction referenced in footnote 11, we will
       operate WDBZ-AM pursuant to a time brokerage arrangement.
(/14/) WBLO-FM is currently being operated by Blue Chip Broadcasting, Inc.
       pursuant to a time brokerage agreement, however Blue Chip has an option
       to purchase the station from its current owner. The option will either
       be exercised by Blue Chip prior to the completion of our acquisition,
       or the unexercised option to purchase the station will be transferred
       to us (and our purchase price will be adjusted accordingly).
(/15/) The approximate purchase price of $8.5 million related to both the
       acquisition of WTLC-AM and the acquisition of all of the intellectual
       property of WTLC-FM (including the call letters). Approximately
       $1.1 million of the purchase price is allocable to the pending
       acquisition of WTLC-AM and the remaining $7.4 million is allocable to
       the completed acquisition of the intellectual property of WTLC-FM.
       Pending completion of the acquisition of WTLC-AM, we are operating the
       station under a time brokerage agreement.
(/16/) We have acquired or agreed to acquire and/or operate 43 radio stations
       since January 1, 2000. Of the 47 stations listed in the table, we
       agreed to acquire four of those in 1999 (see footnote 10), and one of
       those will be operated pursuant to a time brokerage agreement (see
       footnote 12).
(/17/) Pending completion of this divestiture, WJZZ-AM is being operated
       pursuant to a time brokerage agreement by its prospective buyer.
(/18/) Pending completion of this divestiture, KJOI-AM is being operated
       pursuant to a time brokerage agreement by its prospective buyer.

                                       8
<PAGE>

Completed Acquisitions

  Philadelphia--WPLY-FM Acquisition

   On February 28, 2000, Radio One acquired the assets of WPLY-FM, licensed to
Media, Pennsylvania for approximately $80.0 million in cash.

  Augusta--WTHB-AM, WAEG-FM, WAKB-FM, WAEJ-FM and WFXA-FM and Charlotte--WCCJ-
FM Acquisition

   On June 7, 2000, Radio One acquired Davis Broadcasting, Inc., which owned
and operated radio stations WTHB-AM, licensed to Augusta, Georgia, WAEG-FM,
licensed to Evans, Georgia, WAKB-FM, licensed to Wrens, Georgia, WAEJ-FM,
licensed to Waynesboro, Georgia, WFXA-FM, licensed to Augusta, Georgia and
WCCJ-FM, licensed to Harrisburg, North Carolina, for approximately $20.7
million in cash, approximately 57,000 shares of class A common stock and
approximately 115,000 shares of class D common stock.

  Indianapolis I--WHHH-FM, WTLC-FM (formerly WBKS-FM), WYJZ-FM and W53AV
Acquisition

   On June 8, 2000, Radio One acquired the assets of WHHH-FM, licensed to
Indianapolis, Indiana, WTLC-FM (formerly WBKS-FM), licensed to Greenwood,
Indiana, WYJZ-FM, licensed to Lebanon, Indiana and W53AV, a low power
television station licensed to Indianapolis, Indiana, for approximately $30.0
million in cash and approximately 441,000 shares of class A common stock.

  Clear Channel/AMFM Acquisitions--KMJQ-FM, KBXX-FM, WVCG-AM, WZAK-FM,
WJMO-AM, KKBT-FM, KBFB-FM, WJMZ-FM, WFXC-FM, WFXK-FM, WNNL-FM, and WQOK-FM

   On August 25, 2000, Radio One acquired the assets of twelve radio stations
(KMJQ-FM, licensed to Houston, Texas, KBXX-FM, licensed to Houston, Texas,
WVCG-AM, licensed to Coral Gables, Florida, WZAK-FM, licensed to Cleveland,
Ohio, WJMO-AM, licensed to Cleveland Heights, Ohio, KKBT-FM, licensed to Los
Angeles, California, KBFB-FM, licensed to Dallas, Texas, WJMZ-FM, licensed to
Anderson, South Carolina, WFXC-FM, licensed to Durham, North Carolina, WFXK-
FM, licensed to Tarboro, North Carolina, WNNL-FM, licensed to Fuquay-Varina,
North Carolina, and WQOK-FM, licensed to South Boston, Virginia) from Clear
Channel Communications, Inc. and AMFM, Inc. for approximately $1.3 billion in
cash.

  Dallas II--KJOI-AM (formerly KLUV-AM) Acquisition

   On September 25, 2000, Radio One acquired the assets of KJOI-AM (formerly
KLUV-AM), licensed to Dallas, Texas, for approximately $16.0 million in cash.

  Greenville--WPEK-FM Acquisition

   On November 15, 2000, Radio One acquired the assets of WPEK-FM, licensed to
Seneca, South Carolina, from Alpeak Broadcasting Corp, for approximately $7.5
million in cash.

  Dallas III--KTXQ-FM Acquisition

   On February 1, 2001, Radio One acquired the assets of KTXQ-FM (formerly
KDGE-FM), licensed to Gainesville, Texas, for approximately $52.5 million in
cash. Prior to the acquisition, we had been operating KTXQ-FM under a time
brokerage agreement since November 2000.

  Boston--WILD-AM Acquisition

   On February 28, 2001, Radio One acquired Nash Communications Corporation
which owned and operated radio station WILD-AM, licensed to Boston,
Massachusetts, for approximately $4.5 million in cash and approximately 63,500
shares of class A common stock. Prior to the acquisition, we had been
operating WILD-AM under a time brokerage agreement since May 2000.

                                       9
<PAGE>

Pending Acquisitions

  Richmond III--WPLZ-FM (formerly WJRV-FM), WCDX-FM, WPZE-FM (formerly WPLZ-
FM) and WGCV-AM Acquisition

   Pursuant to an asset purchase agreement dated May 6, 1999, Radio One has
agreed to acquire the assets of WCDX-FM, licensed to Mechanicsville, Virginia;
WPZE-FM (formerly WPLZ-FM), licensed to Petersburg, Virginia; WPLZ-FM
(formerly WJRV-FM), licensed to Richmond, Virginia; and WGCV-AM, licensed to
Petersburg, Virginia, for approximately $34.0 million in cash. We have been
operating WCDX-FM, WPZE-FM and WPLZ-FM under a time brokerage agreement since
June 1, 1999, and we expect to complete the acquisition during the second half
of 2001.

  Blue Chip Acquisition--WIZF-FM and WDBZ-AM in Cincinnati; WCKX-FM, WXMG-FM
and WJYD-FM in Columbus; WGTZ-FM, WING-FM, WING-AM and WKSW-FM in Dayton;
WDJX-FM, WBLO-FM, WGZB-FM, WULV-FM, WMJM-FM and WLRS-FM in Louisville; and
KTTB-FM in Minneapolis

   On February 7, 2001, Radio One entered into a definitive agreement to
acquire Blue Chip Broadcasting, Inc. which owns and/or operates 16 radio
stations (WIZF-FM, licensed to Erlanger, Kentucky; WDBZ-AM, licensed to
Cincinnati, Ohio; WCKX-FM, licensed to Columbus, Ohio; WXMG-FM, licensed to
Upper Arlington, Ohio; WJYD-FM, licensed to London, Ohio; WGTZ-FM, licensed to
Eaton, Ohio; WING-FM, licensed to Springfield, Ohio; WING-AM, licensed to
Dayton, Ohio; WKSW-FM, licensed to Urbana, Ohio; WDJX-FM, licensed to
Louisville, Kentucky; WBLO-FM, licensed to Charlestown, Kentucky; WGZB-FM,
licensed to Corydon, Indiana; WULV-FM, licensed to Louisville, Kentucky; WMJM-
FM, licensed to Jeffersontown, Kentucky; WLRS-FM, licensed to Shepherdsville,
Kentucky; and KTTB-FM, Glencoe, Minnesota) for an aggregate purchase price of
$190.0 million in cash, stock and the assumption of outstanding debt. The cash
component of the purchase price will be not less than $25.0 million, and may
be up to $50.0 million, at our election; the assumption of outstanding debt is
expected to be approximately $50.0 million; and the remainder of the purchase
price shall be paid in shares of our class D common stock, with each share
valued at $14.00. Blue Chip Broadcasting, Inc. currently owns 15 of those
stations and has an option to purchase WBLO-FM, which is currently being
operated by Blue Chip Broadcasting, Inc. pursuant to a time brokerage
agreement, from its current owner. The WBLO-FM purchase option will either be
exercised by Blue Chip Broadcasting, Inc. prior to the completion of our
acquisition, or the unexercised option will be transferred to us (and our
purchase price will be adjusted accordingly). Immediately prior to completion
of our acquisition of Blue Chip Broadcasting, Inc., WDBZ-AM will be
transferred to an entity affiliated with a current shareholder of Blue Chip
Broadcasting, Inc., and we will enter into a time brokerage agreement to
operate that station. We expect to complete the acquisition of Blue Chip
Broadcasting, Inc. in the second half of 2001.

  Indianapolis II--WTLC-AM and Intellectual Property of WTLC-FM Acquisition

   On January 30, 2001, Radio One entered into a definitive agreement with
Emmis Communications to acquire all of the intellectual property of WTLC-FM
(including its call letters) and the assets of WTLC-AM, licensed to
Indianapolis, Indiana. The approximate purchase price of $8.5 million relates
to both the acquisition of the intellectual property of WTLC-FM, which
acquisition was completed on February 15, 2001, and the acquisition of the
assets of WTLC-AM, which we expect to complete in the second quarter of 2001.
We have been operating WTLC-AM under a time brokerage agreement since February
16, 2001. Following the acquisition of the WTLC-FM intellectual property, we
have been operating our station formerly known as WBKS-FM under the call
letters WTLC-FM.

Completed Divestitures

  Richmond I--WDYL-FM Divestiture

   On February 1, 2001, Radio One sold WDYL-FM, licensed to Chester, Virginia,
to Cox Radio, Inc. for approximately $9.0 million in cash.

  Richmond II--WARV-FM Divestiture

   On February 1, 2001, Radio One sold WARV-FM, licensed to Petersburg,
Virginia, to Honolulu Broadcasting, Inc. for approximately $1.0 million in
cash.

                                      10
<PAGE>

  Greenville--WJMZ-FM and WPEK-FM Divestiture

   On February 1, 2001, Radio One sold WJMZ-FM, licensed to Anderson, South
Carolina, and WPEK-FM, licensed to Seneca, South Carolina, to Cox Radio, Inc.
for approximately $43.5 million in cash.

Pending Divestitures

  Dallas, Texas--KJOI-AM Divestiture

   On January 30, 2001, Radio One entered into a definitive agreement to sell
KJOI-AM (formerly KLUV-AM) to Clear Channel Communications for approximately
$16.0 million. As part of this agreement, Clear Channel Communications began
operating the station under a time brokerage agreement on February 1, 2001. We
expect to complete the sale in the second quarter of 2001.

  Kingsley, Michigan--WJZZ-AM Divestiture

   On February 7, 2001, Radio One entered into a definitive agreement to sell
the assets of WJZZ-AM, licensed to Kingsley, Michigan, to Fort Bend
Broadcasting, Inc. for approximately $225,000. As part of this agreement, Fort
Bend Broadcasting, Inc. began operating the station under a time brokerage
agreement on February 7, 2001. We expect to complete the sale in the second
quarter of 2001.

Turnaround Expertise

   Historically, we have entered a market by acquiring a station or stations
that have little or negative broadcast cash flow or that, in our opinion, have
been substantially underperforming. By implementing our operating strategies,
we have succeeded in increasing ratings, net broadcast revenue and broadcast
cash flow of most of the FM stations we have owned or managed for at least one
year. In many cases, we have achieved these improvements while operating
against larger competitors. Our turnaround strategy has been especially
successful with respect to our operations in Washington, D.C., Los Angeles,
Atlanta, Philadelphia, Baltimore, Dallas, St. Louis, Cleveland, Boston and
Charlotte.

                                      11
<PAGE>

Top 52 African-American Radio Markets in the United States

   In the table below, boxes and bold text indicate markets where, after we
complete our pending transactions, we will own or operate radio stations.
Markets where we have pending acquisitions but no current stations are denoted
by an asterisk. Population estimates are for 1998 and are based upon BIA 2000
Fourth Edition.

<TABLE>
<CAPTION>
                                                              African-Americans
                                             African American  as a Percentage
                                              Population in    of the Overall
                                                the Market    Population in the
  Rank                Market                  (in thousands)       Market
  ---- -----------------------------------   ---------------- -----------------
  <C>  <S>                                   <C>              <C>
   1.  New York, NY                               3,634             21.4%
   2.  Chicago, IL                                1,690             19.5
   3.  Washington, DC                             1,154             26.6
   4.  Los Angeles, CA                            1,125              9.0
   5.  Detroit, MI                                1,004             21.7
   6.  Atlanta, GA                                  990             26.0
   7.  Philadelphia, PA                             985             20.2
   8.  Houston/Galveston, TX                        813             18.3
   9.  Miami/Ft. Lauderdale/Hollywood, FL           730             19.8
  10.  Baltimore, MD                                693             27.8
  11.  Dallas/Ft. Worth, TX                         675             14.2
  12.  San Francisco, CA                            614              9.0
  13.  Memphis, TN                                  498             42.1
  14.  St. Louis, MO                                456             17.7
  15.  Norfolk/Virginia Beach/Newport
       News, VA                                     456             30.7
  16.  New Orleans, LA                              441             34.9
  17.  Cleveland, OH                                411             19.4
  18.  Boston, MA                                   315              7.2
  19.  Richmond, VA                                 288             30.1
  20.  Charlotte/Gastonia/Rock Hill, NC             287             20.5
  21.  Birmingham, AL                               270             27.4
  22.  Milwaukee/Racine, WI                         264             15.6
  23.  Raleigh/Durham, NC                           262             24.0
  24.  Jacksonville, FL                             253             23.2
  25.  Tampa/St. Petersburg/Clearwater, FL          248             10.8
  26.  Kansas City, MO                              233             13.5
  27.  Nassau/Suffolk Counties, NY                  231              8.6
  28.  Greensboro/Winston Salem/High
       Point, NC                                    230             19.6
  29.  Cincinnati, OH*                              227             11.6
  30.  Orlando, FL                                  201             15.0
  31.  Pittsburgh, PA                               200              8.5
  32.  Columbus, OH*                                199             13.1
  33.  Indianapolis, IN                             199             14.2
  34.  Jackson, MS                                  189             43.4
  35.  Nashville, TN                                183             15.7
  36.  San Diego, CA                                183              6.4
  37.  Baton Rouge, LA                              182             31.4
  38.  Seattle/Tacoma, WA                           181              5.2
  39.  Charleston, SC                               172             31.3
  40.  West Palm Beach/Boca Raton, FL               157             15.1
  41.  Greenville/Spartanburg, SC                   156             17.8
  42.  Columbia, SC                                 155             30.0
  43.  Augusta, GA                                  154             33.4
  44.  Greenville/New Bern/Jacksonville,
       NC                                           153             27.0
  45.  Mobile, AL                                   151             28.2
  46.  Lafayette, LA                                142             28.5
  47.  Dayton, OH*                                  140             14.1
  48.  Shreveport, LA                               138             36.6
  49.  Buffalo/Niagara Falls, NY                    137             11.9
  50.  Las Vegas, NV                                134             10.4
  51.  Louisville, KY*                              133             12.9
  52.  Minneapolis-St. Paul, MN*                    133              4.7
</TABLE>

                                      12
<PAGE>

Operating Strategy

   In order to maximize net broadcast revenue and broadcast cash flow at our
radio stations, we strive to achieve the largest audience share of African-
American listeners in each market, convert these audience share ratings to
advertising revenue, and control operating expenses. Through our newly created
national presence we also provide advertisers with a radio station advertising
platform that is unique and a powerful delivery mechanism to African-
Americans. The success of our strategy relies on the following:

  .  market research, targeted programming and marketing;

  .  strong management and performance-based incentives;

  .  strategic sales efforts;

  .  radio station clustering, programming segmentation and sales bundling;

  .  marketing platform to national advertisers;

  .  advertising partnerships and special events; and

  .  significant community involvement.

Market Research, Targeted Programming and Marketing

   Radio One uses market research to tailor the programming, marketing and
promotions of our radio stations to maximize audience share. To achieve these
goals, we use market research to identify unserved or underserved markets or
segments of the African-American community in current and new markets and to
determine whether to acquire a new radio station or reprogram one of our
existing radio stations to target those markets or segments.

   We also seek to reinforce our targeted programming by creating a distinct
and marketable identity for each of our radio stations. To achieve this
objective, in addition to our significant community involvement discussed
below, we employ and promote distinct, high-profile on-air personalities at
many of our radio stations, many of whom have strong ties to the African-
American community.

Strong Management and Performance-based Incentives

   Radio One focuses on hiring highly motivated and talented individuals in
each functional area of the organization who can effectively help us implement
our growth and operating strategies. Radio One's management team is comprised
of a diverse group of individuals who bring expertise to their respective
functional areas. We seek to hire and promote individuals with significant
potential, the ability to operate with high levels of autonomy and the
appropriate team-orientation that will enable them to pursue their careers
within the organization.

   To enhance the quality of our management in the areas of sales and
programming, general managers, sales managers and program directors have
significant portions of their compensation tied to the achievement of certain
performance goals. General managers' compensation is based partially on
achieving broadcast cash flow benchmarks which create an incentive for
management to focus on both sales growth and expense control. Additionally,
sales managers and sales personnel have incentive packages based on sales
goals, and program directors and on-air talent have incentive packages focused
on maximizing overall ratings as well as ratings in specific target segments.

Strategic Sales Efforts

   Radio One has assembled an effective, highly trained sales staff
responsible for converting audience share into revenue. We operate with a
focused, sales-oriented culture which rewards aggressive selling efforts
through a generous commission and bonus compensation structure. We hire and
deploy large teams of sales professionals

                                      13
<PAGE>

for each of our stations or station clusters, and we provide these teams with
the resources necessary to compete effectively in the markets in which we
operate. We utilize various sales strategies to sell and market our stations
as stand-alones, in combination with other stations within a given market and
across markets, where appropriate.

Radio Station Clustering, Programming Segmentation and Sales Bundling

   Radio One strives to build clusters of radio stations in our markets, with
each radio station targeting different demographic segments of the African-
American population. This clustering and programming segmentation strategy
allows us to achieve greater penetration into each segment of our target
market. We are then able to offer advertisers multiple audiences and to bundle
the radio stations for advertising sales purposes when advantageous.

   We believe there are several potential benefits that result from operating
multiple radio stations in the same market. First, each additional radio
station in a market provides us with a larger percentage of the prime
advertising time available for sale within that market. Second, the more
stations we program, the greater the market share we can achieve in our target
demographic groups through the use of segmented programming. Third, we are
often able to consolidate sales, promotional, technical support and corporate
functions to produce substantial cost savings. Finally, the purchase of
additional radio stations in an existing market allows us to take advantage of
our market expertise and existing relationships with advertisers.

Marketing Platform to National Advertisers.

   Radio One, through its recently completed acquisitions and expected
acquisitions, has created a national platform of radio stations in some of the
largest African-American markets. This platform reaches over 10 million
listeners weekly, more than any other media vehicle targeting African-
Americans. Thus, national advertisers find advertising on all Radio One radio
stations an efficient and cost-effective way to reach this target audience. We
have established a corporate sales department which bundles and sells this
national platform of radio stations to national advertisers thereby enhancing
our revenue generating opportunities, expanding our base of advertisers,
creating greater demand for our advertising time inventory and increasing the
capacity utilization of our inventory and making our sales effort more
efficient. In the short period of time this national platform has been in
place, advertisers such as the banking and financial services provider First
Union(R), the restaurant chain Denny's(R) and the United States Army have
taken advantage of this offering.

Advertising Partnerships and Special Events

   We believe that in order to create advertising loyalty, Radio One must
strive to be the recognized expert in marketing to the African-American
consumer in the markets in which we operate. We believe that Radio One has
achieved this recognition by focusing on serving the African-American consumer
and by creating innovative advertising campaigns and promotional tie-ins with
our advertising clients and sponsoring numerous entertainment events each
year. We sponsor the Stone Soul Picnic, an all-day free outdoor concert which
showcases advertisers, local merchants and other organizations to audiences in
Washington, D.C., Detroit, Atlanta and Baltimore. We also sponsor The People's
Expo every Winter in Washington, D.C, Baltimore and Richmond, which provides
entertainment, shopping and educational seminars to Radio One's listeners and
others from the communities we serve. In these events, advertisers buy
signage, booth space and broadcast promotions to sell a variety of goods and
services to African-American consumers. As we expand our presence in our
existing markets and into new markets, we plan to increase the number of
events and the number of markets in which we host these major events.

Significant Community Involvement

   We believe our active involvement and significant relationships in the
African-American community provides a competitive advantage in targeting
African-American audiences. In this way, we believe our proactive involvement
in the African-American community in each of our markets significantly
improves the marketability of our radio broadcast time to advertisers who are
targeting such communities.

                                      14
<PAGE>

   We believe that a radio station's image should reflect the lifestyle and
viewpoints of the target demographic group it serves. Due to our fundamental
understanding of the African-American community, we believe we are able to
identify music and musical styles, as well as political and social trends and
issues, early in their evolution. This understanding is then integrated into
all aspects of our operations and enables us to create enhanced awareness and
name recognition in the marketplace. In addition, we believe our multi-level
approach to community involvement leads to increased effectiveness in
developing and updating our programming formats. We believe our enhanced
awareness and more effective programming formats lead to greater listenership
and higher ratings over the long-term.

   We have a history of sponsoring events that demonstrate our commitment to
the African-American community, including:

  .  heightening the awareness of diseases which disproportionately impact
     African-Americans, such as sickle-cell anemia, leukemia and AIDS, and
     holding fundraisers to benefit the search for their cure;

  .  developing contests specifically designed to assist African-American
     single mothers with day care expenses; and

  .  organizing seminars designed to educate African-Americans on personal
     issues such as buying a home, starting a business, developing a credit
     history, financial planning and health care.

Management Stock Option Plan

   On March 10, 1999, we adopted the 1999 Stock Option and Restricted Stock
Grant Plan designed to provide incentives relating to equity ownership to
present and future executive, managerial, and other key employees of Radio One
and our subsidiaries, and on June 14, 2000, we amended that option plan to
provide for options of class D common stock to be available for issuance under
the option plan. The option plan affords us latitude in tailoring incentive
compensation for the retention of key personnel, to support corporate and
business objectives, and to anticipate and respond to a changing business
environment and competitive compensation practices.

Our Station Portfolio

   The following table sets forth selected information about our portfolio of
radio stations, giving effect to our pending acquisitions and divestitures.
Market population data and revenue rank data are from BIA 2000 Fourth Edition.
Audience share and audience rank data are based on Arbitron Survey four book
averages ending with the Fall 2000 Arbitron Survey unless otherwise noted.
Except as noted, revenue share and revenue rank data for the Washington, D.C.,
Detroit, Baltimore and Columbus markets are based on the Radio Revenue Reports
of Hungerford Aldrin Nichols & Carter, PC for the twelve-month period ending
December 31, 2000. For the Los Angeles, Atlanta, Philadelphia, Houston,
Dallas, Cleveland, Richmond, Charlotte, Raleigh-Durham, Cincinnati,
Indianapolis, Augusta, Dayton, Louisville and Minneapolis markets, unless
otherwise noted the revenue share and revenue rank data are from revenue
reports for the twelve-month period ending December 31, 2000, as prepared by
Miller, Kaplan, Arase & Co., Certified Public Accountants. As used in this
table, "n/a" means not applicable or not available and "t" means tied with one
or more radio stations.

                                      15
<PAGE>


<TABLE>
<CAPTION>
                       Market Rank                                         Four Book Average       Four Book Average
                    ------------------                                     --------------------    --------------------
                                                                           Audience    Audience    Audience    Audience
                                                                   Target  Share in    Rank in     Share in    Rank in
                       1998     1999                                 Age     12+         12+        Target      Target
                      Metro     Radio    Year                       Demo-   Demo-       Demo-       Demo-       Demo-
   Market(/1/)      Population Revenue Acquired       Format       Graphic Graphic     Graphic     Graphic     Graphic
   -----------      ---------- ------- --------- ----------------- ------- --------    --------    --------    --------
 <S>                <C>        <C>     <C>       <C>               <C>     <C>         <C>         <C>         <C>
 Washington, DC          9         6
 WKYS-FM                                 1995    Urban              18-34     5.4           3        10.9           1
 WMMJ-FM                                 1987    Urban AC           25-54     4.2           8         4.8           5
 WYCB-AM                                 1998    Gospel             35-64     0.7          26         1.0          23
 WOL-AM                                  1980    Urban Talk         25-54     0.8          25         0.6          26
 Los Angeles             2         1
 KKBT-FM                                 2000    Urban              18-34     2.9          11         4.8           7
 Detroit                 7        12
 WDTJ-FM                                 1998    Urban              18-34     3.9          10         7.0           5
 WDMK-FM                                 1998    Urban AC           25-54     0.9          25         1.1          23
 WCHB-AM                                 1998    Urban Talk/Gospel  35-64     0.7          26         0.9          22
 Atlanta                11         7
 WHTA-FM                                 1999    Urban              18-34     4.7           7         8.3           4
 WAMJ-FM                                 1999    Urban AC           25-54     1.9          16         2.6          14
 Philadelphia            5         9
 WPHI-FM                                 1997    Urban              18-34     2.8          17         5.4           7
 WPLY-FM                                 2000    Alternative Rock   18-34     3.1          14         6.8           4
 Houston                10        10
 KMJQ-FM                                 2000    Urban AC           25-54     5.4           5         6.5           3
 KBXX-FM                                 2000    Urban              18-34     7.5           1        12.0           1
 Miami                  12        11
 WVCG-AM                                 2000    Ethnic             35-64     n/a(/3/)    n/a(/3/)    n/a(/3/)    n/a(/3/)
 Baltimore              20        20
 WERQ-FM                                 1993    Urban              18-34     9.7           1        17.7           1
 WWIN-FM                                 1992    Urban AC           25-54     6.3           3         8.0           2
 WOLB-AM                                 1992    Urban Talk         25-54     0.4          29         0.3          32
 WWIN-AM                                 1993    Gospel             35-64     0.8          25         1.1          21
 Dallas                  6         5
 KBFB-FM                                 2000    Urban              18-34     2.2        18(t)        2.7          17
 KTXQ-FM                                 2001    R&B/Oldies         25-54     2.1          22         2.7        14(t)
 St. Louis              19        18
 WFUN-FM                                 1999    Urban              18-34     1.4          21         2.3          16
 Cleveland              24        25
 WENZ-FM                                 1999    Urban              18-34     5.9           5        12.0           2
 WERE-AM                                 1999    News/Talk          25-54     0.3          24         0.1          23
 WZAK-FM                                 2000    Urban AC           25-54     4.7           9         5.3          10
 WJMO-AM                                 2000    Gospel             35-64     1.7          17         2.1          15
 Boston                  8         8
 WBOT-FM                                 1999    Urban              18-34     1.7          18         3.3           9
 WILD-AM                                 2001    Urban AC           25-54     1.2          22         1.5          18
 Richmond               57        48
 WCDX-FM(/5/)                          (pending) Urban              18-34    11.1           1        20.7           1
 WKJS-FM                                 1999    Urban AC           25-54     6.3           4         7.8           3
 WPZE-FM(/5/)                          (pending) R&B/Oldies         25-54     4.1           9         4.8           9
 WPLZ-FM(/5/)                          (pending) R&B                25-54     1.6          15         1.7          15
 WGCV-AM                               (pending) Gospel             35-64     1.4          18         1.9          16
 Charlotte              37        23
 WCCJ-FM                                 2000    R&B/Oldies         25-54     3.5          12         4.9          10
 Raleigh-Durham         48        36
 WQOK-FM                                 2000    Urban              18-34     7.6           1        12.0           2
 WFXK-FM                                 2000    Urban AC           25-54     2.3          11         3.0          11
 WFXC-FM                                 2000    Urban AC           25-54     2.8          12         3.4          10
 WNNL-FM                                 2000    Gospel             25-54     6.9           4         7.4           2
 Cincinnati             26        19
 WIZF-FM                               (pending) Urban              18-34     5.6           5         8.2           3
 WDBZ-AM(/7/)                          (pending) Urban Talk         25-54     0.5(/8/)     20(/8/)    0.7(/8/)   17(t)(/8/)
 Columbus               34        30
 WCKX-FM                               (pending) Urban              18-34     7.8           2        13.3           1
 WXMG-FM                               (pending) R&B/Oldies         25-54     3.1          10         3.9           9
 WJYD-FM                               (pending) Gospel             25-54     1.0          21         1.3        18(t)
 Indianapolis(/9/)      38        31
 WHHH-FM                                 2000    Top 40             18-34     4.8           9         7.1           6
 WTLC-FM(/10/)                           2000    Rhythm/Blues       25-54     2.6          13         3.4          10
 WYJZ-FM                                 2000    Smooth Jazz        35-64     1.9          16         2.8          11
 WTLC-AM(/5/)                          (pending) Young Gospel       25-54     1.8          17         1.4          17
<CAPTION>
                     January-
                     December
                       2000
                    Radio One
                      Market
                     Revenue
                    --------------------
   Market(/1/)      Share      Rank
   -----------      ---------- ---------
 <S>                <C>        <C>
 Washington, DC
 WKYS-FM             5.6         8
 WMMJ-FM             3.5        15
 WYCB-AM             n/a(/2/)  n/a(/2/)
 WOL-AM              0.4        21
 Los Angeles
 KKBT-FM             4.3        10
 Detroit
 WDTJ-FM             3.1        14
 WDMK-FM             0.5        20
 WCHB-AM             n/a(/2/)  n/a(/2/)
 Atlanta
 WHTA-FM             3.7        12
 WAMJ-FM             1.3        15
 Philadelphia
 WPHI-FM             2.1        17
 WPLY-FM             3.9        13
 Houston
 KMJQ-FM             6.6         5
 KBXX-FM             6.6         6
 Miami
 WVCG-AM             n/a(/2/)  n/a(/2/)
 Baltimore
 WERQ-FM            13.4       n/a(/4/)
 WWIN-FM             9.1       n/a(/4/)
 WOLB-AM             0.4       n/a(/4/)
 WWIN-AM             0.3       n/a(/4/)
 Dallas
 KBFB-FM             0.7        29
 KTXQ-FM             2.7        15
 St. Louis
 WFUN-FM             0.2        20
 Cleveland
 WENZ-FM             3.7        11
 WERE-AM             0.9        17
 WZAK-FM             7.8         6
 WJMO-AM             0.7        18
 Boston
 WBOT-FM             n/a(/2/)  n/a(/2/)
 WILD-AM             n/a(/2/)  n/a(/2/)
 Richmond
 WCDX-FM(/5/)       11.6         2
 WKJS-FM             6.8         9
 WPZE-FM(/5/)        1.5        13
 WPLZ-FM(/5/)        1.3        14
 WGCV-AM             n/a(/2/)  n/a(/2/)
 Charlotte
 WCCJ-FM             2.1        14
 Raleigh-Durham
 WQOK-FM             8.7         6
 WFXK-FM             4.2(/6/)   10(/6/)
 WFXC-FM             n/a(/6/)  n/a(/6/)
 WNNL-FM             3.8        11
 Cincinnati
 WIZF-FM             4.7        10
 WDBZ-AM(/7/)        0.0        18
 Columbus
 WCKX-FM             7.5         6
 WXMG-FM             1.7        13
 WJYD-FM             0.2        19
 Indianapolis(/9/)
 WHHH-FM             3.9       n/a(/4/)
 WTLC-FM(/10/)       1.3       n/a(/4/)
 WYJZ-FM             0.8       n/a(/4/)
 WTLC-AM(/5/)        n/a(/2/)  n/a(/2/)
</TABLE>

                                       16
<PAGE>


<TABLE>
<CAPTION>
                  1999 Market Rank                                     Four Book Average       Four Book Average
                 ------------------                                    --------------------    --------------------
                                                                       Audience    Audience    Audience    Audience
                                                               Target  Share in    Rank in     Share in    Rank in
                                                                 Age     12+         12+        Target      Target
                   Metro     Radio    Year                      Demo-   Demo-       Demo-       Demo-       Demo-
  Market(/1/)    Population Revenue Acquired       Format      Graphic Graphic     Graphic     Graphic     Graphic
  -----------    ---------- ------- --------- ---------------- ------- --------    --------    --------    --------
 <S>             <C>        <C>     <C>       <C>              <C>     <C>         <C>         <C>         <C>
 Augusta(/11/)      114       115
 WAEG-FM                              2000    R&B/Oldies        25-54    0.7          19          0.6         18(t)
 WAEJ-FM                              2000    R&B/Oldies        25-54    0.4          21(t)       0.3         20(t)
 WAKB-FM                              2000    Urban AC          25-54    4.1           8(t)       5.8          7
 WFXA-FM                              2000    Urban             18-34    7.6           3         12.7          1(t)
 WTHB-AM                              2000    Gospel            35-64    3.0          14          3.3         11(t)
 Dayton              56        56
 WGTZ-FM                            (pending) CHR               18-34    4.5           7          7.0          6
 WING-FM                            (pending) Classic Rock      25-54    4.6           8          6.7          6
 WING-AM                            (pending) News/Sports/Talk  25-54    0.6          21          0.7         19
 WKSW-FM                            (pending) Country           25-54    1.4          16(t)       1.1         16(t)
 Louisville          53        46
 WDJX-FM                            (pending) Top 40            18-34    8.6           3         12.4          1
 WBLO-FM(/13/)                      (pending) Urban             18-34    3.0          10          5.6          6(t)
 WGZB-FM                            (pending) Urban             18-34    5.4           5          7.9          4
 WULV-FM                            (pending) Soft AC           25-54    2.4          12(t)       3.0         12
 WMJM-FM                            (pending) R&B/Oldies        25-54    2.8          11          3.5         10
 WLRS-FM                            (pending) Alternative       18-34    2.4          12(t)       5.7          5
 Minneapolis         17        15
 KTTB-FM                            (pending) Urban Pop         18-34    2.8(/8/)     12(/8/)     4.9(/8/)     6(t)(/8/)
<CAPTION>
                  January-
                  December
                    2000
                 Radio One
                   Market
                  Revenue
                 ----------------------
  Market(/1/)    Share       Rank
  -----------    ----------- ----------
 <S>             <C>         <C>
 Augusta(/11/)
 WAEG-FM          0.2         15
 WAEJ-FM          n/a(/12/)  n/a(/12/)
 WAKB-FM          3.2         11
 WFXA-FM         10.3          5
 WTHB-AM          n/a(/2/)   n/a(/2/)
 Dayton
 WGTZ-FM          6.5          5
 WING-FM          6.3          7
 WING-AM          1.2         13
 WKSW-FM          2.7         10
 Louisville
 WDJX-FM         11.5          3
 WBLO-FM(/13/)    1.0         16
 WGZB-FM          5.0          7
 WULV-FM          1.2         13
 WMJM-FM          1.0         15
 WLRS-FM          0.7         19
 Minneapolis
 KTTB-FM          0.4         16
</TABLE>
--------
(/1/WJZZ-AM)in Kingsley, MI and KJOI-AM in Dallas, TX are not included in the
    table because there are pending sale agreements for those stations and
    each is being operated by its prospective purchaser pursuant to a time
    brokerage agreement pending completion of the sale.
(/2/Station)did not report revenue to Miller Kaplan or Hungerford during
    calendar year 2000.
(/3/Arbitron)does not publish ratings information for this station.
(/4/In)the Baltimore market, WERQ-FM and WOLB-AM jointly report revenue to
    Hungerford, as do WWIN-FM and WWIN-AM. WHHH-FM, WTLC-FM and WYJZ-FM in the
    Indianapolis market jointly report revenue to Miller Kaplan. In each case,
    the January-December 2000 Radio One Market Revenue Share percentages for
    these stations reflect the proportional contribution by such station to
    the joint revenue reported to Hungerford or Miller Kaplan.
(/5/Station)is being operated by us pursuant to a time brokerage agreement
    while our acquisition of the station is pending.
(/6/WFXK-FM)and WXFC-FM in the Raleigh-Durham market simulcast all of their
    programming and jointly report revenue to Miller Kaplan. Because the joint
    revenue is not allocable among the stations, for purposes of this table,
    all of the WFXK-FM /WXFC-FM jointly reported revenue has been attributed
    to WFXK-FM.
(/7/We)will operate WDBZ-AM pursuant to a time brokerage agreement upon
    completion of the pending Blue Chip Broadcasting, Inc. acquisition.
(/8/Arbitron)4-Book Survey information is not available for this station; the
    chart reflects rating share and rank information from the Arbitron Fall
    2000 Survey.
(/9/W53AV,)the low power television station that we acquired in Indianapolis
    in June 2000, is not included in this table.
(/10/Formerly)WBKS-FM.
(/11/For)the Augusta market, Arbitron issues its radio market survey reports
     on a semi-annual basis, rather than a quarterly basis as in our other
     markets. Accordingly, the four book average ratings data for the Augusta
     stations is based on the four most recent semi-annual surveys ending with
     the Fall 2000 survey.
(/12/WAEG-FM)and WAEJ-FM in the Augusta market simulcast all of their
     programming and jointly report revenue to Miller Kaplan. Because the
     joint revenue is not allocable among the stations, for purposes of this
     table, all of the WAEG-FM /WAEJ-FM jointly reported revenue has been
     attributed to WAEG-FM.
(/13/Upon)completion of the Blue Chip Broadcasting, Inc. transaction, we will
     either acquire WBLO-FM or acquire an option to purchase it.

Advertising Revenue

   Substantially all of our net broadcast revenue is generated from the sale
of local and national advertising for broadcast on our radio stations.
Additional net broadcast revenue is generated from network compensation
payments and other miscellaneous transactions. Local sales are made by the
sales staffs located in our markets. National sales are made by firms
specializing in radio advertising sales on the national level, in exchange for
a commission from Radio One that is based on a percentage of our net broadcast
revenue from the advertising obtained. Approximately 72% of our net broadcast
revenue for the year ended December 31, 2000, was generated from the sale of
local advertising and 28% from sales to national advertisers. The balance of
net broadcast

                                      17
<PAGE>

revenue is derived from network advertising, tower rental income and ticket
and other revenue related to special events hosted by Radio One.

   We believe that advertisers can reach the African-American community more
cost effectively through radio broadcasting than through newspapers or
television. Advertising rates charged by radio stations are based primarily
on:

  .  a radio station's audience share within the demographic groups targeted
     by the advertisers,

  .  the number of radio stations in the market competing for the same
     demographic groups, and

  .  the supply and demand for radio advertising time.

   Advertising rates are generally highest during the morning and afternoon
commuting hours.

   A radio station's listenership is reflected in ratings surveys that
estimate the number of listeners tuned to a radio station and the time they
spend listening to that radio station. Each radio station's ratings are used
by its advertisers to consider advertising with the radio station, and are
used by us to chart audience growth, set advertising rates and adjust
programming.

Strategic Diversification

   We will continue to evaluate potential radio acquisitions in African-
American markets. We are also exploring opportunities in other forms of media
to apply our expertise in marketing to African-Americans. Such opportunities
could include outdoor advertising in urban environments, an urban-oriented
Internet strategy, an urban-oriented radio network, cable networks, music
production, publishing and other related businesses.

   We have entered into an exclusive programming agreement with XM Satellite
Radio, Inc. to provide African-American oriented programming to be broadcast
on XM Satellite's digital audio radio service, which is expected to be
available in 2001.

   We have also invested, together with most other publicly-traded radio
companies, in a private placement for iBiquity Digital Corporation (formerly
USA Digital Radio, Inc.), a leading developer of in-band on-channel digital
audio broadcast technology. This technology could enable radio broadcasters to
convert from analog to digital broadcasting within the existing frequency
allocation of their AM and FM stations. In conjunction with this investment,
Alfred C. Liggins, III, the Chief Executive Officer and President of Radio
One, became a board member of iBiquity Digital Corporation.

   Additionally, we have invested in PNE Media Holdings, LLC, a privately-held
outdoor advertising company with a presence in several of the markets in which
we own radio stations.

   In 1999, we invested a combination of cash and advertising time in aka.com,
LLC, an aggregator of web sites devoted to hip hop culture. In conjunction
with this investment, our Chief Financial Officer, Scott R. Royster, became a
director of aka.com, LLC.

   In 1999 and 2000, we invested a combination of cash and advertising time in
NetNoir, Inc., the owner and operator of an Internet web site targeting
African-Americans.

   In 2000, we invested a combination of cash and advertising time in New
Urban Entertainment Television, an urban-oriented cable television programmer.

   In 2000, we committed to invest cash in Quetzal/J.P. Morgan Partners, L.P.,
which is an entity formed for the purpose of investing in minority-owned
telecommunications entities. Many other major radio broadcasters have also
committed to invest in Quetzal/J.P. Morgan Partners, L.P.

   We recently invested cash in SMR Acquisition Corp., a company that provides
program research services to radio stations. In conjunction with the
investment, we received the right to appoint one member of SMR Acquisition
Corp.'s board of directors. We have not yet exercised our director appointment
right.

                                      18
<PAGE>

Competition

   The radio broadcasting industry is highly competitive. Radio One's stations
compete for audiences and advertising revenue with other radio stations and
with other media such as television, newspapers, direct mail and outdoor
advertising, some of which may be controlled by horizontally-integrated
companies. Audience ratings and advertising revenue are subject to change and
any adverse change in a market could adversely affect our net broadcast
revenue in that market. If a competing station converts to a format similar to
that of one of our stations, or if one of our competitors strengthens its
operations, our stations could suffer a reduction in ratings and advertising
revenue. Other radio companies which are larger and have more resources may
also enter markets where we operate. Although we believe our stations are well
positioned to compete, we cannot assure you that our stations will maintain or
increase their current ratings or advertising revenue.

   The radio broadcasting industry is also subject to rapid technological
change, evolving industry standards and the emergence of new media
technologies. Several new media technologies are being developed, including
the following:

  .  audio programming by cable television systems, direct broadcast
     satellite systems, Internet content providers (both landline and
     wireless) and other digital audio broadcast formats;

  .  satellite digital audio radio service, which could result in the near-
     term introduction of several new subscriber-based satellite radio
     services with numerous channels and sound quality equivalent to that of
     compact discs;

  .  in-band on-channel digital radio, which could provide multi-channel,
     multi-format digital radio services in the same bandwidth currently
     occupied by traditional AM and FM radio services; and

  .  low power FM radio, which could result in additional FM radio broadcast
     outlets that are designed to serve localized areas.

   We are party to a programming agreement with a satellite digital audio
radio service and have also invested in a developer of digital audio broadcast
technology. However, we cannot assure you that these arrangements will be
successful or enable us to adapt effectively to these new media technologies.
We also cannot assure you that we will continue to have the resources to
acquire other new technologies or to introduce new services that could compete
with other new technologies.

Antitrust

   An important part of our growth strategy is the acquisition of additional
radio stations. The agencies responsible for enforcing the federal antitrust
laws, the Federal Trade Commission or the Department of Justice, may
investigate certain acquisitions. After the passage of the Telecommunications
Act of 1996, the Department of Justice became more aggressive in reviewing
proposed acquisitions of radio stations. The Justice Department is
particularly aggressive when the proposed buyer already owns one or more radio
stations in the market of the station it is seeking to buy. The Justice
Department has challenged a number of radio broadcasting transactions. Some of
those challenges ultimately resulted in consent decrees requiring, among other
things, divestitures of certain stations. In general, the Justice Department
has more closely scrutinized radio broadcasting acquisitions that result in
local market shares in excess of 40% of radio advertising revenue.

   We cannot predict the outcome of any specific Department of Justice or FTC
investigation. Any decision by the Department of Justice or FTC to challenge a
proposed acquisition could affect our ability to consummate an acquisition or
to consummate it on the proposed terms. For an acquisition meeting certain
size thresholds, the Hart-Scott-Rodino Act requires the parties to file
Notification and Report Forms concerning antitrust issues with the Department
of Justice and the FTC and to observe specified waiting period requirements
before consummating the acquisition. If the investigating agency raises
substantive issues in connection with a proposed transaction, then the parties
frequently engage in lengthy discussions or negotiations with the
investigating agency concerning possible means of addressing those issues,
including restructuring the proposed acquisition or

                                      19
<PAGE>

divesting assets. In addition, the investigating agency could file suit in
federal court to enjoin the acquisition or to require the divestiture of
assets, among other remedies. Acquisitions that are not required to be
reported under the Hart-Scott-Rodino Act may be investigated by the Department
of Justice or the FTC under the antitrust laws before or after consummation.
In addition, private parties may under certain circumstances bring legal
action to challenge an acquisition under the antitrust laws. As part of its
increased scrutiny of radio station acquisitions, the Department of Justice
has stated publicly that it believes that local marketing agreements, joint
sales agreements, time brokerage agreements and other similar agreements
customarily entered into in connection with radio station transfers could
violate the Hart-Scott-Rodino Act if such agreements take effect prior to the
expiration of the waiting period under the Hart-Scott-Rodino Act. Furthermore,
the Department of Justice has noted that joint sales agreements may raise
antitrust concerns under Section 1 of the Sherman Act and has challenged joint
sales agreements in certain locations. As indicated above, the Department of
Justice also has stated publicly that it has established certain revenue and
audience share concentration benchmarks with respect to radio station
acquisitions, above which a transaction may receive additional antitrust
scrutiny. However, to date, the Department of Justice has also investigated
transactions that do not meet or exceed these benchmarks and has cleared
transactions that do exceed these benchmarks.

   Similarly, the FCC staff has adopted procedures to review proposed radio
broadcasting transactions even if the proposed acquisition otherwise complies
with the FCC's ownership limitations. In particular, the FCC may invite public
comment on proposed radio transactions that the FCC believes, based on its
initial analysis, may present ownership concentration concerns in a particular
local radio market. In March 2001, however, the FCC Commissioners expressed
their intent to eliminate delays in the staff's review of transactions that
might involve concentration of market share but are otherwise consistent with
the radio ownership limits set forth in the Communications Act.

Federal Regulation of Radio Broadcasting

   The radio broadcasting industry is subject to extensive and changing
regulation by the FCC of programming, technical operations, employment and
other business practices. The FCC regulates radio broadcast stations pursuant
to the Communications Act. The Communications Act permits the operation of
radio broadcast stations only in accordance with a license issued by the FCC
upon a finding that the grant of a license would serve the public interest,
convenience and necessity. The Communications Act provides for the FCC to
exercise its licensing authority to provide a fair, efficient and equitable
distribution of broadcast service throughout the United States. Among other
things, the FCC:

  .  assigns frequency bands for radio broadcasting;

  .  determines the particular frequencies, locations, operating power, and
     other technical parameters of radio broadcast stations;

  .  issues, renews, revokes and modifies radio broadcast station licenses;

  .  establishes technical requirements for certain transmitting equipment
     used by radio broadcast stations;

  .  adopts and implements regulations and policies that directly or
     indirectly affect the ownership, operation, program content and
     employment and business practices of radio broadcast stations; and

  .  has the power to impose penalties, including monetary forfeitures, for
     violations of its rules and the Communications Act.

   The Communications Act prohibits the assignment of an FCC license, or other
transfer of control of an FCC licensee, without the prior approval of the FCC.
In determining whether to grant requests for consents to assignments or
transfers, and in determining whether to grant or renew a radio broadcast
license, the FCC considers a number of factors pertaining to the licensee (and
any proposed licensee), including restrictions on foreign ownership,
compliance with FCC media ownership limits and other FCC rules, the character
of the licensee and those persons holding attributable interests in the
licensee, and compliance with the Anti-Drug Abuse Act of 1988.

                                      20
<PAGE>

   The following is a brief summary of certain provisions of the
Communications Act and specific FCC rules and policies. This summary does not
purport to be a complete listing of all of the regulations and policies
affecting radio stations and is qualified in its entirety by the text of the
Communications Act, the FCC's rules and regulations, and the rulings and
public notices of the FCC. You should refer to the Communications Act and
these FCC notices, rules and rulings for further information concerning the
nature and extent of federal regulation of radio broadcast stations.

   A licensee's failure to observe the requirements of the Communications Act
or FCC rules and policies may result in the imposition of various sanctions,
including admonishment, fines, the grant of renewal terms of less than eight
years, the grant of a license with conditions or, for particularly egregious
violations, the denial of a license renewal application, the revocation of an
FCC license or the denial of FCC consent to acquire additional broadcast
properties.

   Congress and the FCC have had under consideration or reconsideration, and
may in the future consider and adopt, new laws, regulations and policies
regarding a wide variety of matters that could, directly or indirectly, affect
the operation, ownership and profitability of our radio stations, result in
the loss of audience share and advertising revenue for our radio broadcast
stations or affect our ability to acquire additional radio broadcast stations
or finance such acquisitions. Such matters may include:

  .  changes to the license authorization and renewal process;

  .  proposals to impose spectrum use or other fees on FCC licensees;

  .  fees for radio stations streaming audio over the Internet;

  .  restatement in revised form of the FCC's equal employment opportunity
     rules;

  .  proposals to change rules relating to political broadcasting including
     proposals to grant free air time to candidates, and other changes
     regarding program content;

  .  proposals to restrict or prohibit the advertising of beer, wine and
     other alcoholic beverages;

  .  technical and frequency allocation matters;

  .  the implementation of digital audio broadcasting on both a satellite and
     terrestrial basis;

  .  changes in broadcast multiple ownership, foreign ownership, cross-
     ownership and ownership attribution policies, including the definition
     of the local market for multiple ownership purposes;

  .  proposals to allow telephone companies to deliver audio and video
     programming to homes in their service areas; and

  .  proposals to alter provisions of the tax laws affecting broadcast
     operations and acquisitions.

   Finally, the FCC has adopted procedures for the auction of broadcast
spectrum in circumstances where two or more parties have filed applications
for new stations or for major changes in existing stations that are mutually
exclusive. Such procedures may limit our efforts to modify or expand the
broadcast signals of our stations.

   We cannot predict what changes, if any, might be adopted, nor can we
predict what other matters might be considered in the future, nor can we judge
in advance what impact, if any, the implementation of any particular proposals
or changes might have on our business.

FCC Licenses

   The Communications Act provides that a broadcast station license may be
granted to any applicant if the public interest, convenience and necessity
will be served thereby, subject to certain limitations. In making licensing
determinations, the FCC considers an applicant's legal, technical, financial
and other qualifications. The

                                      21
<PAGE>

FCC grants radio broadcast station licenses for specific periods of time and,
upon application, may renew them for additional terms. A station may continue
to operate beyond the expiration date of its license if a timely filed license
renewal application is pending. Under the Communications Act, radio broadcast
station licenses may be granted for a maximum term of eight years.

   Generally, the FCC renews radio broadcast licenses without a hearing upon a
finding that:

  .  the radio station has served the public interest, convenience and
     necessity;

  .  there have been no serious violations by the licensee of the
     Communications Act or FCC rules and regulations; and

  .  there have been no other violations by the licensee of the
     Communications Act or FCC rules and regulations which, taken together,
     indicate a pattern of abuse.

   After considering these factors, the FCC may grant the license renewal
application with or without conditions, including renewal for a term less than
the maximum otherwise permitted, or hold an evidentiary hearing.

   In addition, the Communications Act authorizes the filing of petitions to
deny a license renewal application during specific periods of time after a
renewal application has been filed. Interested parties, including members of
the public, may use such petitions to raise issues concerning a renewal
applicant's qualifications. If a substantial and material question of fact
concerning a renewal application is raised by the FCC or other interested
parties, or if for any reason the FCC cannot determine that grant of the
renewal application would serve the public interest, convenience and
necessity, the FCC will hold an evidentiary hearing on the application. If as
a result of an evidentiary hearing the FCC determines that the licensee has
failed to meet the requirements specified above and that no mitigating factors
justify the imposition of a lesser sanction, then the FCC may deny a license
renewal application. Only after a license renewal application is denied will
the FCC accept and consider competing applications for the vacated frequency.
Also, during certain periods when a renewal application is pending, the
transferability of the applicant's license may be restricted. Historically,
our licenses have been renewed without any conditions or sanctions imposed.
However, there can be no assurance that the licenses of each of our stations
will be renewed or will be renewed without conditions or sanctions.

   The FCC classifies each AM and FM radio station. An AM radio station
operates on either a clear channel, regional channel or local channel. A clear
channel is one on which AM radio stations are assigned to serve wide areas,
particularly at night. Clear channel AM radio stations are classified as
either: (1) Class A radio stations, which operate unlimited time and are
designed to render primary and secondary service over an extended area, or (2)
Class B radio stations, which operate unlimited time and are designed to
render service only over a primary service area. Class D radio stations, which
operate either daytime, during limited times only, or unlimited time with low
nighttime power, may operate on the same frequencies as clear channel radio
stations. A regional channel is one on which Class B and Class D AM radio
stations may operate and serve primarily a principal center of population and
the rural areas contiguous to it. A local channel is one on which AM radio
stations operate unlimited time and serve primarily a community and the
suburban and rural areas immediately contiguous to it. A Class C AM radio
station operates on a local channel and is designed to render service only
over a primary service area that may be reduced as a consequence of
interference.

   The minimum and maximum facilities requirements for an FM radio station are
determined by its class. FM class designations depend upon the geographic zone
in which the transmitter of the FM radio station is located. In general,
commercial FM radio stations are classified as follows, in order of increasing
power and antenna height: Class A, B1, C3, B, C2, C1, C0 and C. The FCC
recently adopted a new rule that subjects Class C FM stations that do not
satisfy a certain antenna height requirement to an involuntary downgrade in
class to Class C0 under certain circumstances.

                                      22
<PAGE>

   The following table sets forth information with respect to each of our
radio stations, including the additional radio stations we have agreed to
purchase in Richmond, three of which are currently operated pursuant to a
local marketing agreement, and the radio stations to be acquired from Blue
Chip. A broadcast station's market may be different from its community of
license. "ERP" refers to the effective radiated power of an FM radio station.
"HAAT" refers to the antenna height above average terrain of an FM radio
station. The coverage of an AM radio station is chiefly a function of the
power of the radio station's transmitter, less dissipative power losses and
any directional antenna adjustments. For FM radio stations, signal coverage
area is chiefly a function of the ERP of the radio station's antenna and the
HAAT of the radio station's antenna. The height of an AM radio station's
antenna is measured in meters and the height of an FM radio station's antenna
is measured by reference to HAAT.

                                      23
<PAGE>

<TABLE>
<CAPTION>
                                             ERP (FM)       Antenna
                                               Power      Height (AM)           Expiration
              Station Call   Year of    FCC   (AM) in      HAAT (FM)  Operating Date of FCC
Market          Letters    Acquisition Class Kilowatts     in Meters  Frequency   License
------        ------------ ----------- ----- ---------    ----------- --------- -----------
<S>           <C>          <C>         <C>   <C>          <C>         <C>       <C>
Washington,
 DC             WOL-AM        1980       C       1.0          90.8     1450 kHz 10/01/2003
                WMMJ-FM       1987       A       2.9         146.0    102.3 MHz 10/01/2003
                WKYS-FM       1995       B      24.0         215.0     93.9 MHz 10/01/2003
                WYCB-AM       1998       C       1.0          81.9     1340 kHz 10/01/2003
Los Angeles     KKBT-FM       2000       B       5.3         916.0    100.3 MHz 12/01/2005
Detroit         WDTJ-FM       1998       B      20.0         221.0    105.9 MHz 10/01/2004
                WCHB-AM       1998       B      50.0          71.1     1200 kHz 10/01/2004
                WJZZ-AM       1998       D      50.0         177.2     1210 kHz 10/01/2004
                WDMK-FM       1998       B      50.0         152.0    102.7 MHz 10/01/2004
Atlanta         WHTA-FM       1999      C3       7.9         175.0     97.5 MHz 04/01/2004
                WAMJ-FM       1999      C3      25.0          98.0    107.5 MHz 04/01/2004
Philadelphia    WPHI-FM       1997       A       0.3(/1/)    305.0    103.9 MHz 08/01/2006
                WPLY-FM       2000       B      35.0         183.0    100.3 MHz 08/01/2006
Houston         KMJQ-FM       2000       C     100.0         524.0    102.1 MHz 08/01/2005
                KBXX-FM       2000       C     100.0         585.0     97.9 MHz 08/01/2005
Miami           WVCG-AM       2000       B       1.0          90.0     1080 kHz 02/01/2004
Baltimore       WWIN-AM       1992       C       1.0         102.5     1400 kHz 10/01/2003
                WWIN-FM       1992       A       3.0          91.0     95.9 MHz 10/01/2003
                WOLB-AM       1993       D       1.0         103.5     1010 kHz 10/01/2003
                WERQ-FM       1993       B      37.0         174.0     92.3 MHz 10/01/2003
Dallas          KBFB-FM       2000       C     100.0         491.0     97.9 MHz 08/01/2005
                KTXQ-FM       2001       C     100.0         578.0     94.5 MHz 08/01/2005
                KJOI-AM       2000       B      50.0          96.0     1190 kHz 08/01/2005
St. Louis       WFUN-FM       1999       A       6.0         100.0     95.5 MHz 12/01/2004
Cleveland       WERE-AM       1999       B       5.0         200.0     1300 kHz 10/01/2004
                WENZ-FM       1999       B      16.0         272.0    107.9 MHz 10/01/2004
                WZAK-FM       2000       B      27.5         189.0         93.1 10/01/2004
                WJMO-AM       2000       C       1.0         190.9     1490 kHz 10/01/2004
Boston          WBOT-FM       1999       A       2.7         150.0     97.7 MHz 04/01/2006
                WILD-AM       2001       D       1.0         101.3     1090 kHz 04/01/2006
Richmond        WKJS-FM       1999      C1     100.0         299.0    104.7 MHz 10/01/2003
                WCDX-FM     (pending)   B1       4.5         235.0     92.1 MHz 10/01/2003
                WPZE-FM     (pending)    A       6.0         100.0     99.3 MHz 10/01/2003
                WPLZ-FM     (pending)    A       2.3         162.0    105.7 MHz 10/01/2003
                WGCV-AM     (pending)    C       1.0         181.5     1240 kHz 10/01/2003
Charlotte       WCCJ-FM       2000       A       6.0         100.0     92.7 MHz 12/01/2003
Raleigh-
 Durham         WQOK-FM       2000      C1     100.0         299.0     97.5 MHz 12/01/2003
                WFXK-FM       2000      C1     100.0         299.0    107.1 MHz 12/01/2003
                WFXC-FM       2000       A      2.59         153.0    104.3 MHz 12/01/2003
                WNNL-FM       2000      C3       7.9         176.0    103.9 MHz 12/01/2003
Cincinnati      WIZF-FM     (pending)    A      1.25         155.0    100.9 MHz 10/01/2004
                WDBZ-AM     (pending)    C       1.0          89.6     1230 kHz 10/01/2004
Columbus        WCKX-FM     (pending)    A       1.9         126.0    107.5 MHz 10/01/2004
                WXMG-FM     (pending)    A      2.59         154.0     98.9 MHz 10/01/2004
                WJYD-FM     (pending)    A       6.0         100.0    106.3 MHz 10/01/2004
Indianapolis    WHHH-FM       2000       A       3.3          87.0     96.3 MHz 08/01/2004
                WTLC-FM       2000       A       6.0          85.0    106.7 MHz 08/01/2004
                WYJZ-FM       2000       A       6.0         100.0    100.9 MHz 08/01/2004
                WTLC-AM     (pending)    B       5.0         221.0     1310 kHz 08/01/2004
Augusta         WAEG-FM       2000       A       3.0         100.0     92.3 MHz 04/01/2004
                WAEJ-FM       2000       A       6.0         100.0    100.9 MHz 04/01/2004
                WAKB-FM       2000      C3      0.75         416.0     96.7 MHz 04/01/2004
                WFXA-FM       2000       A       6.0          92.0    103.1 MHz 04/01/2004
                WTHB-AM       2000       D       5.0         154.9     1550 kHz 04/01/2004
Dayton          WGTZ-FM     (pending)    B      40.0         168.0     92.9 MHz 10/01/2004
                WING-FM     (pending)    B      50.0         150.0    102.9 MHz 10/01/2004
                WING-AM     (pending)    B       5.0         200.0     1410 kHz 10/01/2004
                WKSW-FM     (pending)    A       3.2         124.0    101.7 MHz 10/01/2004
</TABLE>

                                       24
<PAGE>

<TABLE>
<CAPTION>
                                            ERP (FM)    Antenna
                                              Power   Height (AM)           Expiration
             Station Call   Year of    FCC   (AM) in   HAAT (FM)  Operating Date of FCC
Market         Letters    Acquisition Class Kilowatts  in Meters  Frequency   License
------       ------------ ----------- ----- --------- ----------- --------- -----------
<S>          <C>          <C>         <C>   <C>       <C>         <C>       <C>
Louisville     WDJX-FM     (pending)    B      24.0      218.0     99.7 MHz 08/01/2004
               WBLO-FM     (pending)    A       3.0      100.0    104.3 MHz 08/01/2004
               WGZB-FM     (pending)    A       3.0      100.0     96.5 MHz 08/01/2004
               WULV-FM     (pending)    A       4.3       87.0    102.3 MHz 08/01/2004
               WMJM-FM     (pending)    A       2.0       59.0    101.3 MHz 08/01/2004
               WLRS-FM     (pending)    A      1.55      136.0    105.1 MHz 08/01/2004
Minneapolis    KTTB-FM     (pending)   C1     100.0      176.0     96.3 MHz 04/01/2005
</TABLE>
--------
(/1/WPHI-FM)operates with facilities equivalent to 3 kW at 100 meters.

   Ownership Matters. The Communications Act requires prior approval of the
FCC for the assignment of a broadcast license or the transfer of control of a
corporation or other entity holding a license. In determining whether to
approve an assignment of a radio broadcast license or a transfer of control of
a broadcast licensee, the FCC considers, among other things:

  .  the financial and legal qualifications of the prospective assignee or
     transferee, including compliance with FCC restrictions on non-U.S.
     citizen or entity ownership and control;

  .  compliance with FCC rules, regulations and policies, including rules
     limiting the common ownership of media properties in a given market;

  .  the history of compliance with FCC operating rules; and

  .  the "character" qualifications of the transferee or assignee and the
     individuals or entities holding "attributable" interests in them.

   To obtain the FCC's prior consent to assign or transfer a broadcast
license, appropriate applications must be filed with the FCC. If the
application to assign or transfer the license involves a substantial change in
ownership or control of the licensee, for example, the transfer or acquisition
of more than 50% of the voting stock, the application must be placed on public
notice for a period of 30 days during which petitions to deny the application
may be filed by interested parties, including members of the public. Informal
objections may be filed any time until the FCC acts upon the application. If
an assignment application does not involve new parties, or if a transfer of
control application does not involve a "substantial change" in ownership or
control, it is a pro forma application, which is not subject to the public
notice and 30-day petition to deny procedure. The pro forma application is
nevertheless subject to informal objections that may be filed any time until
the FCC acts on the application. If the FCC grants an assignment or transfer
application, interested parties have 30 days from public notice of the grant
to seek reconsideration of that grant. The FCC usually has an additional ten
days to set aside such grant on its own motion. When ruling on an assignment
or transfer application, the FCC is prohibited from considering whether the
public interest might be served by an assignment or transfer to any party
other than the assignee or transferee specified in the application.

   Under the Communications Act, a broadcast license may not be granted to or
held by any persons who are not U.S. citizens, whom the Communications Act and
FCC rules refer to as "aliens," including any corporation that has more than
20% of its capital stock owned or voted by non-U.S. citizens or entities or
their representatives, by foreign governments or their representatives, or by
non-U.S. corporations. Furthermore, the Communications Act provides that no
FCC broadcast license may be granted to or held by any corporation directly or
indirectly controlled by any other corporation of which more than 25% of its
capital stock is owned of record or voted by non-U.S. citizens or entities or
their representatives, or foreign governments or their representatives or by
non-U.S. corporations, if the FCC finds the public interest will be served by
the refusal or revocation of such license. These restrictions apply in
modified form to other forms of business organizations, including partnerships
and limited liability companies. Thus, the licenses for our stations could be
revoked if more than 25% of our outstanding capital stock is issued to or for
the benefit of non-U.S. citizens.

                                      25
<PAGE>

   The FCC generally applies its other broadcast ownership limits to
"attributable" interests held by an individual, corporation, partnership or
other association or entity, including limited liability companies. In the
case of a corporation holding broadcast licenses, the interests of officers,
directors and those who, directly or indirectly have the right to vote five
percent or more of the stock of a licensee corporation are generally deemed
attributable interests, as are positions as an officer or director of a
corporate parent of a broadcast licensee. The FCC treats all partnership
interests as attributable, except for those limited partnership interests that
under FCC policies are considered "insulated" from "material involvement" in
the management or operation of the media-related activities of the
partnership. The FCC currently treats limited liability companies like limited
partnerships for purposes of attribution. Stock interests held by insurance
companies, mutual funds, bank trust departments and certain other passive
investors that hold stock for investment purposes only become attributable
with the ownership of 20% or more of the voting stock of the corporation
holding broadcast licenses. The FCC recently revoked a rule that formerly
provided that interests of minority shareholders in a corporation were not
attributable if a single entity or individual held 50% or more of that
corporation's voting stock. In revoking the rule, the FCC has, however,
grandfathered as nonattributable those minority stock interests that were held
as of the date of the FCC's order.

   To assess whether a voting stock interest in a direct or an indirect parent
corporation of a broadcast licensee is attributable, the FCC uses a
"multiplier" analysis in which non-controlling voting stock interests are
deemed proportionally reduced at each non-controlling link in a multi-
corporation ownership chain. A time brokerage agreement with another radio
station in the same market creates an attributable interest in the brokered
radio station as well for purposes of the FCC's local radio station ownership
rules, if the agreement affects more than 15% of the brokered radio station's
weekly broadcast hours.

   Debt instruments, non-voting stock, options and warrants for voting stock
that have not yet been exercised, and insulated limited partnership interests
where the limited partner is not "materially involved" in the media-related
activities of the partnership generally do not subject their holders to
attribution.

   The FCC has adopted a rule, known as the equity-debt-plus or EDP rule, that
causes certain creditors or investors to be attributable owners of a station,
regardless of whether there is a single majority shareholder or other
applicable exception to the FCC's attribution rules. Under this new rule, a
major programming supplier or a same-market media entity will be an
attributable owner of a station if the supplier or same-market media entity
holds debt or equity, or both, in the station that is greater than 33% of the
value of the station's total debt plus equity. For purposes of the EDP rule,
equity includes all stock, whether voting or nonvoting, and equity held by
insulated limited partners in limited partnerships. Debt includes all
liabilities, whether long-term or short-term. A major programming supplier
includes any programming supplier that provides more than 15% of the station's
weekly programming hours. A same-market media entity includes any holder of an
attributable interest in a media company, including broadcast stations, cable
television and newspapers, located in the same market as the station, but only
if the holder's interest is attributable under an FCC attribution rule other
than the EDP rule.

   The FCC's rules also specify other exceptions to these general principles
for attribution.

   The Communications Act and FCC rules generally restrict ownership,
operation or control of, or the common holding of attributable interests in:

  .  radio broadcast stations above certain numerical limits serving the same
     local market;

  .  radio broadcast stations and television broadcast stations serving the
     same local market; and

  .  radio broadcast station and a daily newspaper serving the same local
     market.

   These rules include specific signal contour overlap standards to determine
compliance, and the FCC defined market will not necessarily be the same market
used by Arbitron, Neilsen or other surveys, or for purposes of the HSR Act.

                                      26
<PAGE>

   Under these "cross-ownership" rules, we, absent waivers, would not be
permitted to own a radio broadcast station and acquire an attributable
interest in any daily newspaper in the same market where we then owned any
radio broadcast station. Our stockholders, officers or directors, absent a
waiver, may not hold an attributable interest in a daily newspaper in those
same markets.

   Under the revised radio/television cross-ownership rule, a single owner may
own up to two television stations, consistent with the FCC's rules on common
ownership of television stations, together with one radio station in all
markets. In addition, an owner will be permitted to own additional radio
stations, not to exceed the local ownership limits for the market, as follows:

  .  In markets where 20 media voices will remain after the consummation of
     the proposed transaction, an owner may own an additional five radio
     stations, or, if the owner only has one television station, an
     additional six radio stations; and

  .  In markets where 10 media voices will remain after the consummation of
     the proposed transaction, an owner may own an additional three radio
     stations.

   A "media voice" includes each independently-owned and operating full power
television and radio station and each daily newspaper that has a circulation
exceeding 5% of the households in the market, plus one voice for all cable
television systems operating in the market.

   Although current FCC nationwide radio broadcast ownership rules allow one
entity to own, control or hold attributable interests in an unlimited number
of FM radio stations and AM radio stations nationwide, the Communications Act
and the FCC's rules limit the number of radio broadcast stations in local
markets in which a single entity may own an attributable interest as follows:

  .  In a radio market with 45 or more commercial radio stations, a party may
     own, operate or control up to eight commercial radio stations, not more
     than five of which are in the same service (AM or FM).

  .  In a radio market with 30 to 44 commercial radio stations, a party may
     own, operate or control up to seven commercial radio stations, not more
     than four of which are in the same service (AM or FM).

  .  In a radio market with 15 to 29 commercial radio stations, a party may
     own, operate or control up to six commercial radio stations, not more
     than four of which are in the same service (AM or FM).

  .  In a radio market with 14 or fewer commercial radio stations, a party
     may own, operate or control up to five commercial radio stations, not
     more than three of which are in the same service (AM or FM), except that
     a party may not own, operate, or control more than 50 percent of the
     radio stations in such market.

   The FCC staff has notified the public of its intention to review
transactions that comply with these numerical ownership limits but that might
involve undue concentration of market share. In connection with this, the FCC
has invited comment on the impact of concentration in public notices
concerning proposed transactions, and has delayed or refused its consent in
some cases because of revenue concentration. In March 2001, the FCC
Commissioners expressed their intent to eliminate delays in the FCC's review
of transactions that might involve concentration of market share but are
otherwise consistent with the radio ownership limits set forth in the
Communications Act.

   The FCC has also retained discretion to review individual cases that
present unusual cross-interest relationships on a case-by-case basis.

   Because of these multiple and cross-ownership rules, if a stockholder,
officer or director of Radio One holds an "attributable" interest in Radio
One, such stockholder, officer or director may violate the FCC's rules if such
person or entity also holds or acquires an attributable interest in other
television, radio stations or daily newspapers, depending on their number and
location. If an attributable stockholder, officer or director of Radio One
violates any of these ownership rules, we may be unable to obtain from the FCC
one or more authorizations needed to conduct our radio station business and
may be unable to obtain FCC consents for certain future acquisitions.

                                      27
<PAGE>

   Programming and Operations. The Communications Act requires broadcasters to
serve the "public interest." The FCC gradually has relaxed or eliminated many
of the more formalized procedures it developed to promote the broadcast of
certain types of programming responsive to the needs of a radio station's
community of license. Nevertheless, a broadcast licensee continues to be
required to present programming in response to community problems, needs and
interests and to maintain certain records demonstrating its responsiveness.
The FCC will consider complaints from listeners about a broadcast station's
programming when it evaluates the licensee's renewal application, but
listeners' complaints also may be filed and considered at any time. Such
complaints are required to be placed in a station's public file. Stations also
must pay regulatory and application fees, and follow various FCC rules that
regulate, among other things, political advertising, the broadcast of obscene
or indecent programming, sponsorship identification, the broadcast of contests
and lotteries and technical operation, including limits on human exposure to
radio frequency radiation.

   In December 2000, the United States Copyright Office ruled that
broadcasters that simulcast (by a process known as streaming) their over-the-
air signals on the Internet would incur copyright liability for the use of
copyrighted materials, including music programming, with such liability
perhaps extending retroactively to 1998. The Copyright Office intends to hold
arbitration hearings, scheduled to begin in July 2001, to determine copyright
royalty fees for Internet streaming. In response to the Copyright Office's
December 2000 ruling, the National Association of Broadcasters filed suit in
federal court seeking to overturn the ruling. We cannot predict the outcome of
the proceeding, which does not affect our over-the-air broadcasting
operations, or the amount of copyright liability we might incur as a result of
the streaming activity that we engaged in prior to the December 2000 ruling,
or such ruling's affect on our future streaming activity. Internet streaming
is not currently and has not been a material part of our operations.

   The FCC requires that licensees not discriminate in hiring practices,
develop and implement programs designed to promote equal employment
opportunities and submit reports to the FCC on these matters annually and in
connection with each license renewal application. The FCC's employment rules,
as they related to outreach efforts for recruitment of minorities and the
reporting of such outreach efforts, however, were struck down as
unconstitutional by the U.S. Court of Appeals for the D.C. Circuit. Therefore,
on January 20, 2000, the FCC adopted new rules prohibiting employment
discrimination by broadcast stations on the basis of race, religion, color,
national origin, and gender; and requiring broadcasters to implement programs
to promote equal employment opportunities at their stations. The rules
generally require broadcast stations to disseminate information about job
openings widely so that all qualified applicants, including minorities and
women, have an adequate opportunity to compete for the job. Broadcasters may
fulfill this requirement by sending the station's job vacancy information to
organizations that request it, participating in community outreach programs,
or designing an alternative recruitment program. Broadcasters with five or
more full-time employees must place in their public files annually a report
detailing their recruitment efforts and must file a statement with the FCC
certifying compliance with the rules every two years. Broadcasters with ten or
more full-time employees must file their annual reports with the FCC midway
through their license term. Broadcasters also must file employment information
with the FCC annually for statistical purposes. The FCC recently suspended the
effectiveness of its EEO rules in response to a January 16, 2001, decision of
the Court of Appeals for the District of Columbia Circuit, which vacated the
FCC's employment rules. The FCC has sought partial rehearing of the Court of
Appeals ruling and other parties have sought rehearing of the entire ruling.

   The FCC rules also prohibit a broadcast licensee from simulcasting more
than 25% of its programming on another radio station in the same broadcast
service (that is, AM/AM or FM/FM). The simulcasting restriction applies if the
licensee owns both radio broadcast stations or owns one and programs the other
through a local marketing agreement, and only if the contours of the radio
stations overlap in a certain manner.

   From time to time, complaints may be filed against Radio One's radio
stations alleging violations of these or other rules. In addition, the FCC
recently has proposed to establish a system of random audits to ensure and
verify licensee compliance with FCC rules and regulations. Failure to observe
these or other rules and policies

                                      28
<PAGE>

can result in the imposition of various sanctions, including fines or
conditions, the grant of "short" (less than the maximum eight year) renewal
terms or, for particularly egregious violations, the denial of a license
renewal application or the revocation of a license.

   Local Marketing Agreements. Often radio stations enter into local marketing
agreements or time brokerage agreements. These agreements take various forms.
Separately owned and licensed radio stations may agree to function
cooperatively in programming, advertising sales and other matters, subject to
compliance with the antitrust laws and the FCC's rules and policies, including
the requirement that the licensee of each radio station maintain independent
control over the programming and other operations of its own radio station.
One type of time brokerage agreement is a programming agreement between two
separately owned radio stations that serve a common service area whereby the
licensee of one radio station programs substantial portions of the broadcast
day of the other licensee's radio station, subject to ultimate editorial and
other controls being exercised by the radio station licensee, and sells
advertising time during these program segments. The FCC has held that such
agreements do not violate the Communications Act as long as the licensee of
the radio broadcast station that is being substantially programmed by another
entity (1) remains ultimately responsible for, and maintains control over, the
operation of its radio station, and (2) otherwise ensures the radio station's
compliance with applicable FCC rules and policies.

   A radio broadcast station that brokers time on another radio broadcast
station or enters into a time brokerage agreement with a radio broadcast
station in the same market will be considered to have an attributable
ownership interest in the brokered radio station for purposes of the FCC's
local ownership rules if the time brokerage arrangement covers more than 15%
of the brokered station's weekly broadcast hours. As a result, a radio
broadcast station may not enter into a time brokerage agreement that allows it
to program more than 15% of the broadcast time, on a weekly basis, of another
local radio broadcast station that it could not own under the FCC's local
multiple ownership rules. Attribution for radio time brokerage agreements
applies to all of the FCC's multiple ownership rules applicable to radio
stations (daily newspaper/radio cross-ownership and radio/television cross-
ownership) and not only the local radio ownership rules. Also, FCC rules
prohibit a radio broadcast station from simulcasting more than 25% of its
programming on another radio broadcast station in the same broadcast service
(that is, AM/AM or FM/FM) where the two radio stations serve substantially the
same geographic area, whether the licensee owns both radio stations or owns
one radio station and programs the other through a time brokerage agreement.
Thus far, the FCC has not considered what relevance, if any, a time brokerage
agreement may have upon its evaluation of a licensee's performance at renewal
time.

   Joint Sales Agreements. Over the past few years, a number of radio stations
have entered into cooperative arrangements commonly known as joint sales
agreements. While these agreements may take varying forms, under the typical
joint sales agreement, a station licensee obtains, for a fee, the right to
sell substantially all of the commercial advertising on a separately-owned and
licensed station in the same market. The typical joint sales agreement also
customarily involves the provision by the selling party of certain sales,
accounting and services to the station whose advertising is being sold. The
typical joint sales agreement is distinct from a local marketing agreement in
that a joint sales agreement normally does not involve programming other than
advertisement content.

   The FCC has determined that issues of joint advertising sales should be
left to enforcement by antitrust authorities, and therefore does not generally
regulate joint sales practices between stations. Currently, stations for which
another licensee sells time under a joint sales agreement are not deemed by
the FCC to be an attributable interest of that licensee.

   RF Radiation. In 1985, the FCC adopted rules based on a 1982 American
National Standards Institute ("ANSI") standard regarding human exposure to
levels of radio frequency ("RF") radiation. These rules require applicants for
renewal of broadcast licenses or modification of existing licenses to inform
the FCC at the time of filing such applications whether an existing broadcast
facility would expose people to RF radiation in excess of certain limits. In
1992, ANSI adopted a new standard for RF exposure that, in some respects, was
more restrictive

                                      29
<PAGE>

in the amount of environmental RF exposure permitted. The FCC has since
adopted more restrictive radiation limits which became effective October 15,
1997, based in part on the revised ANSI standard, and which were to be fully
complied with by September 1, 2000.

   Digital Audio Radio Service. The FCC allocated spectrum to a new
technology, digital audio radio service ("DARS"), to deliver satellite-based
audio programming to a national or regional audience and issued regulations
for a DARS service in early 1997. DARS may provide a medium for the delivery
by satellite or terrestrial means of multiple new audio programming formats
with compact disc quality sound to local and national audiences. The
nationwide reach of satellite DARS could allow niche programming aimed at
diverse communities that Radio One is targeting. It is not known at this time
whether this technology also may be used in the future by existing radio
broadcast stations either on existing or alternate broadcasting frequencies.
Two companies that hold licenses for authority to offer multiple channels of
digital, satellite-delivered S-Band aural services could compete with
conventional terrestrial radio broadcasting. The licensees will be permitted
to sell advertising and lease channels in these media. The FCC's rules require
that these licensees launch and begin operating at least one space station by
2001 and be fully operational by 2003.

   The FCC has established a Wireless Communications Service ("WCS") in the
2305-2320 and 2345-2360 MHZ bands (the "WCS Spectrum") and awarded licenses.
Licensees are generally permitted to provide any fixed, mobile, radio location
services, or digital satellite radio service using the WCS Spectrum.

   These satellite radio services use technology that may permit higher sound
quality than is possible with conventional AM and FM terrestrial radio
broadcasting.

   Implementation of DARS would provide an additional audio programming
service that could compete with Radio One's radio stations for listeners, but
the effect upon Radio One cannot be predicted.

   Low Power Radio Broadcast Service. In January 2000, the FCC voted to create
a class of radio stations designed to serve very localized communities or
underrepresented groups within communities by authorizing two new classes of
noncommercial low power FM radio stations which will be permitted to operate
on commercial FM frequencies. As adopted by the FCC, there would be two types
of LPFM stations, LP100 stations with power from 50 to 100 watts and a service
radius of approximately 3.5 miles and LP10 stations with power from one to 10
watts and a service radius of approximately 1-2 miles. New LPFM stations would
have to protect the signals of all other authorized FM stations and may be
authorized on any FM frequency. Eligible licensees would be limited to
noncommercial government or private educational organizations, associations or
entities; non-profit entities with educational purposes; or government or non-
profit entities providing local public safety or transportation services. No
existing broadcasters or other media entities could own an LPFM station. For
the first two years of the LPFM service, licensees would be limited to local
entities headquartered within 10 miles of the LPFM station transmitter. During
the first two years, no entity would be permitted to operate more than one
LPFM station. After two years, the ownership limit would be five LPFM stations
nationwide and after three years, the ownership limit would be 10 LPFM
stations nationwide. On December 21, 2000, the President signed an
appropriations bill including provisions that limited the scope of the FCC's
LPFM order. The legislation included provisions affecting LPFM that, among
other things, restored certain interference protection to full power FM
stations in a manner that reduced the potential number of LPFM stations by
approximately 75%, required the FCC to hire an independent consultant to
conduct technical tests in various rural, suburban and urban areas and solicit
public comment on the tests, required the FCC to submit a report to Congress
on LPFM, and precluded the FCC from altering interference protection standards
or expanding LPFM eligibility without additional Congressional legislation.
Additional legislation has been introduced in Congress in 2001 that would have
the effect of increasing the number of LPFM stations beyond those permitted by
the 2000 legislation. However, the proposed legislation faces uncertain
prospects. At this time, it is difficult to assess the competitive impact of
any new LPFM stations. The new LPFM stations must comply with certain
technical requirements aimed at protecting existing FM radio stations from
interference, although the level of interference that low

                                      30
<PAGE>

power stations will cause after they begin operating is uncertain. Moreover,
if low power FM stations are licensed in the markets in which we operate our
stations, the low power stations may compete for listeners. The low power
stations may also limit our ability to obtain new licenses or to modify
existing facilities. Nevertheless, the effect of this untested newly created
low power radio service on Radio One cannot be predicted.

Subsidiaries And Related Entities

   Radio One has title to most of the assets used in the operations of our
radio stations. The FCC licenses for the radio stations in all cases are held
by direct or indirect wholly-owned restricted subsidiaries of Radio One. A
restricted subsidiary is a subsidiary which is subject to the restrictions
imposed by agreements governing our indebtedness. In the case of three of the
Washington, D.C. stations, the Los Angeles station, the Philadelphia stations,
the Houston stations, the Miami station, the Baltimore stations, the Dallas
stations, the St. Louis station, the Cleveland stations, one of the Boston
stations, the Richmond station, the Raleigh stations and the Indianapolis
stations, the FCC licenses are held by Radio One Licenses, Inc., a Delaware
corporation and a wholly-owned restricted subsidiary of Radio One. Radio One
Licenses, Inc. holds no other material assets.

   WYCB Acquisition Corporation, a Delaware corporation and a wholly-owned
restricted subsidiary, holds the assets used in the operation of WYCB-AM and
title to all of the outstanding capital stock of Broadcast Holdings, Inc., a
District of Columbia corporation and a restricted subsidiary. The FCC licenses
for WYCB-AM are held by Broadcast Holdings, Inc.

   Bell Broadcasting Company, a Michigan corporation and a wholly-owned
restricted subsidiary, holds the assets used in the operation of WCHB-AM,
WDTJ-FM and WJZZ-AM. Bell Broadcasting Company holds title to all of the
outstanding capital stock of Radio One of Detroit, Inc., a Delaware
corporation and a restricted subsidiary. The FCC licenses for WCHB-AM, WDTJ-FM
and WJZZ-AM are held by Radio One of Detroit, Inc. Radio One of Detroit, Inc.
holds no other material assets. Allur-Detroit, Inc., a Delaware corporation
and a wholly-owned restricted subsidiary, holds the assets used in the
operation of station WDMK-FM. Allur-Detroit, Inc. holds title to all of the
outstanding capital stock of Allur Licenses, Inc., a Delaware corporation and
a restricted subsidiary. The FCC licenses for WDMK-FM are held by Allur
Licenses, Inc. Allur Licenses, Inc. holds no other material assets.

   Radio One of Atlanta, Inc., a Delaware corporation and a wholly-owned
restricted subsidiary, holds the assets used in the operation of station WHTA-
FM and some assets used in the operation of station WAMJ-FM. Radio One of
Atlanta, Inc. holds title to all of the outstanding capital stock of ROA
Licenses, Inc., a Delaware corporation and a restricted subsidiary. The FCC
licenses for WHTA-FM are held by ROA Licenses, Inc. ROA Licenses, Inc. holds
no other material assets. Dogwood Communications, Inc., a Delaware corporation
and a wholly-owned restricted subsidiary, owns some of the assets used in the
operation of station WAMJ-FM and all of the outstanding capital stock of
Dogwood Licenses, Inc., a Delaware corporation and a restricted subsidiary.
The FCC licenses for WAMJ-FM are held by Dogwood Licenses, Inc. Dogwood
Licenses, Inc., holds no other material assets.

   Radio One of Charlotte, LLC, a Delaware limited liability company of which
Radio One is the sole member, holds the assets used in the operation of WAEG-
FM, WAEJ-FM, WAKB-FM, WFXA-FM and WTHB-AM. Radio One of Charlotte, LLC holds
title to all of the outstanding capital stock of Radio One of Augusta, Inc., a
Delaware corporation. The FCC licenses for WAEG-FM, WAEJ-FM, WAKB-FM, WFXA-FM
and WTHB-AM are held by Radio One of Augusta, Inc.

   Davis Broadcasting of Charlotte, Inc., a Delaware corporation and a wholly-
owned subsidiary of Radio One of Charlotte, LLC, holds the assets used in the
operation of WCCJ-FM. Davis Broadcasting of Charlotte, Inc. holds title to all
of the outstanding capital stock of Radio One of North Carolina, Inc. The FCC
licenses for WCCJ-FM are held by Radio One of North Carolina, Inc.

                                      31
<PAGE>

   Radio One of Boston, Inc., a Delaware corporation and a wholly-owned
restricted subsidiary, holds the assets used in the operation of WILD-AM.
Radio One of Boston holds title to all of the outstanding capital stock of
Radio One of Boston Licenses, Inc., a Delaware corporation. The FCC licenses
for WILD-AM held by Radio One of Boston Licenses, Inc.

   The FCC licenses for radio stations included in pending acquisitions will
be held by existing or to be formed subsidiaries.

Employees

   As of March 31, 2001, we employed approximately 1,123 people. Our employees
are not unionized except for approximately 30 employees who are covered by
collective bargaining agreements that we assumed in connection with certain of
our station acquisitions. We have not experienced any work stoppages and
believe relations with our employees are satisfactory. Each radio station has
its own on-air personalities and clerical staff. However, in an effort to
control broadcast and corporate expenses, we centralize certain radio station
functions by market location. For example, in each of our markets we typically
employ one General Manager who is responsible for all of our radio stations
located in such market.

Industry Segments

   We consider radio broadcasting to be our only business segment.

Cautionary Note Regarding Forward-Looking Statements

   This document contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements are not historical facts, but
rather are based on our current expectations, estimates and projections about
Radio One's industry, our beliefs and assumptions. Words such as
"anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates"
and similar expressions are intended to identify forward-looking statements.
Because these statements apply to future events, they are subject to risks and
uncertainties that could cause actual results to differ materially, including
the absence of a combined operating history with an acquired company or radio
station and the potential inability to integrate acquired businesses, need for
additional financing, high degree of leverage, seasonality of the business,
market ratings, variable economic conditions and consumer tastes, as well as
restrictions imposed by existing debt and future payment obligations.
Important factors that could cause actual results to differ materially are
described in our reports on Forms 8-K, Forms 10-Q and other filings with the
Securities and Exchange Commission.

ITEM 2. PROPERTIES AND FACILITIES

Properties

   The types of properties required to support each of our radio stations
include offices, studios and transmitter/antenna sites. We typically lease our
studio and office space with lease terms from five to ten years in length. A
station's studios are generally housed with its offices in downtown or
business districts. We generally consider our facilities to be suitable and of
adequate size for our current and intended purposes. We lease a majority of
our main transmitter/antenna sites and when negotiating a lease for such sites
we try to obtain a lengthy lease term with options to renew. In general, we do
not anticipate difficulties in renewing facility or transmitter/antenna site
leases or in leasing additional space or sites if required.

   We own substantially all of our equipment, consisting principally of
transmitting antennae, transmitters, studio equipment and general office
equipment. The towers, antennae and other transmission equipment used by Radio
One's stations are generally in good condition, although opportunities to
upgrade facilities are periodically reviewed.

                                      32
<PAGE>

   The tangible personal property owned by Radio One and the real property
owned or leased by Radio One is the subject of a security interest held
pursuant to the terms of our amended and restated credit agreement, dated as
of July 17, 2000, under which we have borrowed $500.0 million in term loans
and may borrow up to $250.0 million on a revolving basis, $62.5 million of
which we had borrowed as of December 31, 2000.

ITEM 3. LEGAL PROCEEDINGS

   We are involved from time to time in various routine legal and
administrative proceedings and threatened legal and administrative proceedings
incidental to the ordinary course of our business. We believe the resolution
of such matters will not have a material adverse effect on our business,
financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

   No matters were submitted to our stockholders for vote during the fourth
quarter of 2000.

                                      33
<PAGE>

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Recent Sales of Unregistered Securities

   On June 7, 2000, Radio One issued approximately 57,000 shares of class A
common stock, valued as of the March 11, 2000 definitive agreement date at
$20.63 per share (after giving effect to the June 6, 2000 stock split), and
115,000 shares of class D common stock, valued as of the March 11, 2000
definitive agreement date at $20.63 per share (after giving effect to the June
6, 2000 stock split), to Gregory A. Davis as partial purchase price
consideration in connection with Radio One's acquisition of Davis
Broadcasting, Inc. These shares were issued pursuant to the exemption from
registration provided by Section 4(2) of the Securities Act.

   On June 8, 2000, Radio One issued approximately 441,000 shares of class A
common stock, valued as of the March 11, 2000 definitive agreement date at
$22.67 per share (after giving effect to the June 6, 2000 stock split), to
Shirk, Inc. as partial purchase price consideration in connection with Radio
One's acquisition of three radio stations and one low power television station
in Indianapolis, Indiana. These shares were issued pursuant to the exemption
from registration provided by Section 4(2) of the Securities Act.

   On July 14, 2000, we issued 310,000 shares of our unregistered 6 1/2%
Convertible Preferred Remarketable Term Income Deferrable Equity Securities
(HIGH TIDES) to Credit Suisse First Boston Corporation, Deutsche Bank
Securities Inc., Morgan Stanley & Co. Incorporated, Banc of America Securities
LLC, and First Union Securities, Inc. and certain other initial purchasers
under that certain Purchase Agreement dated July 10, 2000. We realized
aggregate net proceeds of $300.7 million from the HIGH TIDES issuance, after
deducting the initial purchasers' commission of $30 per share, or $9.3 million
in the aggregate. These shares were issued pursuant to the exemption from
registration provided by Section 4(2) of the Securities Act. Pursuant to our
obligation under the Purchase Agreement, on October 11, 2000, we filed with
the SEC a Registration Statement on Form S-3 to register the HIGH TIDES and
shares of class D common stock into which the HIGH TIDES are convertible. The
Registration Statement on Form S-3 registering the HIGH TIDES was declared
effective by the SEC on October 26, 2000.

   On October 18, 2000, Radio One sold to Scott R. Royster, our Chief
Financial Officer and Executive Vice President, 333,334 unregistered shares of
class A common stock and 666,666 unregistered shares of class D common stock,
each for a purchase price of $7.00 per share. These shares were issued
pursuant to the exemption from registration provided by Section 4(2) of the
Securities Act.

   On October 31, 2000, Radio One sold to Linda J. Eckard Vilardo, our General
Counsel, Assistant Secretary and Vice President, 250,000 unregistered shares
of class D common stock for a purchase price of $8.02 per share. These shares
were issued pursuant to the exemption from registration provided by Section
4(2) of the Securities Act.

   On February 28, 2001, Radio One issued approximately 63,500 shares of class
A common stock, valued as of the October 27, 2000 definitive agreement date at
$7.88 per share, to the Estate of H. Kendell Nash as partial purchase price
consideration in connection with Radio One's acquisition of Nash
Communications Corporation. These shares were issued pursuant to the exemption
from registration provided by Section 4(2) of the Securities Act.

Price Range of Our Class A and Class D Common Stock

   Our class A common stock is traded on The Nasdaq Stock Market's National
Market under the symbol "ROIA." The tables below show, for the quarters
indicated, the reported high and low bid quotes for our class A common stock
on the Nasdaq Stock Market's National Market (as adjusted for our three-for-
one stock split in

                                      34
<PAGE>

the form of a June 6, 2000 dividend of two shares of class D common stock for
each share of class A common stock outstanding on May 30, 2000 (the "Stock
Split")).

<TABLE>
<CAPTION>
                                                                   High   Low
                                                                  ------ ------
      <S>                                                         <C>    <C>
      Fiscal Year 1999
        Second Quarter (beginning May 6)......................... $15.67 $ 9.33
        Third Quarter............................................ $15.50 $13.21
        Fourth Quarter........................................... $32.50 $13.83
</TABLE>

   The initial public offering of our class A common stock was priced on May
5, 1999 at $8.00 per share (as adjusted for the Stock Split).

<TABLE>
<CAPTION>
                                                                    High   Low
                                                                   ------ ------
      <S>                                                          <C>    <C>
      Fiscal Year 2000
        First Quarter............................................. $33.77 $19.90
        Second Quarter............................................ $32.00 $15.05
        Third Quarter............................................. $29.88 $ 7.50
        Fourth Quarter............................................ $13.81 $ 5.56
</TABLE>

   Our class D common stock is traded on The Nasdaq Stock Market's National
Market under the symbol "ROIAK." The table below shows, for the quarters
indicated, the reported high and low bid quotes for our class D common stock
on the Nasdaq Stock Market's National Market.

<TABLE>
<CAPTION>
                                                                   High   Low
                                                                  ------ ------
      <S>                                                         <C>    <C>
      Fiscal Year 2000
        Second Quarter (beginning June 7)........................ $28.00 $16.31
        Third Quarter............................................ $24.50 $ 5.63
        Fourth Quarter........................................... $13.75 $ 5.56
</TABLE>

Dividends

   Since becoming a public company in May 1999, we have not declared any
dividends on our common stock. We intend to retain future earnings for use in
our business and do not anticipate declaring or paying any cash or stock
dividends on shares of our common stock in the foreseeable future. In
addition, any determination to declare and pay dividends will be made by our
board of directors in light of our earnings, financial position, capital
requirements, our bank credit facility, and the indenture governing our 12%
Notes due 2004, and such other factors as the board of directors deems
relevant. See Note 4 to the Consolidated Financial Statements of Radio One
included elsewhere in this Form 10-K.

Number of Stockholders

   Based upon a survey of record holders and a review of our stock transfer
records, as of March 23, 2001, there were approximately 7,900 holders of Radio
One's class A common stock, three holders of Radio One's class B common stock,
two holders of Radio One's class C common stock, and approximately 5,500
holders of Radio One's class D common stock.

                                      35
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

   The following table contains selected historical consolidated financial
data with respect to Radio One. The selected historical consolidated financial
data have been derived from the Consolidated Financial Statements of Radio One
for each of the fiscal years for the five year period ended December 31, 2000,
which have been audited by Arthur Andersen LLP, independent public
accountants. The selected historical consolidated financial data should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Consolidated Financial Statements
of Radio One included elsewhere in this report.

Non-GAAP Measures

   The following table includes information regarding broadcast cash flow,
EBITDA, and after-tax cash flow. Broadcast cash flow consists of operating
income before depreciation, amortization, local marketing agreement fees and
corporate expenses. EBITDA consists of operating income before depreciation,
amortization, and local marketing agreement fees. After-tax cash flow consists
of income before income tax expense (benefit) and extraordinary items, minus
net gain on sale of assets (net of tax) and the current income tax provision,
plus depreciation and amortization expense. Although broadcast cash flow,
EBITDA, and after-tax cash flow are not measures of performance or liquidity
calculated in accordance with GAAP, we believe that these measures are useful
to an investor in evaluating Radio One because these measures are widely used
in the broadcast industry as a measure of a radio broadcasting company's
performance. Nevertheless, broadcast cash flow, EBITDA and after-tax cash flow
should not be considered in isolation from or as a substitute for net income,
cash flows from operating activities and other income or cash flow statement
data prepared in accordance with GAAP, or as a measure of profitability or
liquidity. Moreover, because broadcast cash flow, EBITDA and after-tax cash
flow are not measures calculated in accordance with GAAP, these performance
measures are not necessarily comparable to similarly titled measures employed
by other companies.

                                      36
<PAGE>

<TABLE>
<CAPTION>
                              Fiscal Years Ended(/1/) December 31,
                         ---------------------------------------------------
                          1996      1997      1998      1999        2000
                         -------  --------  --------  ---------  -----------
                                         (In Thousands)
<S>                      <C>      <C>       <C>       <C>        <C>
Statement of
 Operations:
Net broadcast revenue..  $23,702  $ 32,367  $ 46,109  $  81,703  $   155,666
Station operating
 expenses..............   13,927    18,848    24,501     44,259       77,280
Corporate expenses.....    1,793     2,155     2,800      4,380        6,303
Depreciation and
 amortization..........    4,262     5,828     8,445     17,073       63,207
                         -------  --------  --------  ---------  -----------
  Operating income.....    3,720     5,536    10,363     15,991        8,876
Interest expense(/2/)..    7,252     8,910    11,455     15,279       32,407
Other income (expense),
 net...................      (77)      415       358      2,149       20,084
Income tax (benefit)
 expense(/3/)                 --        --    (1,575)     2,728          804
                         -------  --------  --------  ---------  -----------
  (Loss) income before
   extraordinary item..   (3,609)   (2,959)      841        133       (4,251)
Extraordinary loss.....       --     1,985        --         --           --
                         -------  --------  --------  ---------  -----------
  Net (loss) income....  $(3,609) $ (4,944) $    841  $     133  $    (4,251)
                         =======  ========  ========  =========  ===========
  Net loss applicable
   to common
   stockholders........  $(3,609) $ (6,981) $ (2,875) $  (1,343) $   (13,487)
                         =======  ========  ========  =========  ===========

Statement of Cash
 Flows:
Cash Flows From--
  Operating
   activities..........  $ 2,614  $  4,937  $  9,299  $  18,221  $    55,686
  Investing
   activities..........   (1,252)  (23,199)  (61,171)  (346,571)  (1,220,023)
  Financing
   activities..........   (2,357)   25,054    47,827    330,116    1,178,995

Other Data:
Broadcast cash flow....  $ 9,775  $ 13,519  $ 21,608  $  37,444  $    78,386
Broadcast cash flow
 margin(/4/)...........      41%       42%       47%        46%          50%
EBITDA (before non-cash
 compensation).........  $ 7,982  $ 11,364  $ 18,808  $  33,289  $    72,271
After-tax cash flow....      806     2,869     7,248     16,303       48,712
Cash interest
 expense(/5/)..........    4,815     4,413     7,192     10,762       28,581
Capital expenditures...      252     2,035     2,236      3,252        3,665
Balance Sheet Data (at
 period end):
Cash and cash equivalents..................................      $    20,879
Intangible assets, net.....................................        1,637,180
Total assets...............................................        1,765,218
Total debt (including current portion and deferred
 interest).................................................          646,956
Preferred stock............................................               --
Total stockholders' equity.................................        1,057,069
</TABLE>
--------
(/1/Year-to-year)comparisons are significantly affected by Radio One's
    acquisition of various radio stations during the periods covered.
(/2/)Interest expense includes non-cash interest, such as the accretion of
     principal, the amortization of discounts on debt and the amortization of
     deferred financing costs.
(/3/)From January 1, 1996 to May 19, 1997, Radio One elected to be treated as
     an S corporation for U.S. federal and state income tax purposes and,
     therefore, generally was not subject to income tax at the corporate level
     during that period.
(/4/)Broadcast cash flow margin is defined as broadcast cash flow divided by
     net broadcast revenue.
(/5/)Cash interest expense is calculated as interest expense less non-cash
     interest, including the accretion of principal, the amortization of
     discounts on debt and the amortization of deferred financing costs, for
     the indicated period.

                                      37
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

   The following information should be read in conjunction with "Selected
Financial Data" and the Consolidated Financial Statements and Notes thereto
included elsewhere in this Form 10-K.

Introduction

   The net broadcast revenue of Radio One is derived from local and national
advertisers and, to a much lesser extent, ticket and other revenue related to
special events sponsored by Radio One throughout the year. Our significant
broadcast expenses are employee salaries and commissions, programming
expenses, advertising and promotion expenses, rental of premises for studios
and rental of transmission tower space and music license royalty fees. We
strive to control these expenses by centralizing certain functions such as
finance, accounting, legal, human resources and management information systems
and the overall programming management function, as well as using our multiple
stations, market presence and purchasing power to negotiate favorable rates
with certain vendors and national representative selling agencies.
Depreciation and amortization of costs associated with the acquisition of the
stations and interest carrying charges are significant factors in determining
Radio One's overall profitability.

   Radio One's net broadcast revenue is affected primarily by the advertising
rates our radio stations are able to charge as well as the overall demand for
radio advertising time in a market. Advertising rates are based primarily on
(1) a radio station's audience share in the demographic groups targeted by
advertisers, as measured principally by quarterly reports developed by
Arbitron, (2) the number of radio stations in the market competing for the
same demographic groups, and (3) the supply of and demand for radio
advertising time. Advertising rates are generally highest during morning and
afternoon commuting hours. In 2000, approximately 71% of Radio One's revenue
was generated from local advertising and 29% was generated from national spot
advertising. The balance of 2000 revenue was generated primarily from network
advertising, tower rental income and ticket and other revenue related to Radio
One sponsored events.

   The performance of an individual radio station or group of radio stations
in a particular market is customarily measured by its ability to generate net
broadcast revenue, broadcast cash flow and EBITDA, although broadcast cash
flow and EBITDA are not measures utilized under generally accepted accounting
principles ("GAAP") (See "Selected Financial Data--Non-GAAP Measures").
Broadcast cash flow and EBITDA should not be considered in isolation from, nor
as substitutes for, operating income, net income, cash flow, or other
consolidated income or cash flow statement data computed in accordance with
GAAP, nor as a measure of Radio One's profitability or liquidity. Despite
their limitations, broadcast cash flow and EBITDA are widely used in the
broadcasting industry to measure a company's operating performance without
regard to items such as depreciation and amortization, which can vary
depending upon accounting methods and the book value of assets, particulary in
the case of acquisitions. By eliminating such effects, broadcast cash flow
provides a meaningful measure of comparative radio station performance, and
EBITDA provides a meaningful measure of overall company performance after
taking into account corporate operating expenses related to the employment of
the senior management team and other overhead costs associated with running a
large, publicly-traded broadcasting company.

   Radio One's operating results in any period may be affected by advertising
and promotion expenses that do not produce commensurate net broadcast revenue
in the period in which such expenses are incurred. We generally incur
advertising and promotion expenses in order to increase listenership and
Arbitron ratings. Increased advertising revenue may wholly or partially lag
behind the incurrence of such advertising and promotion expenses because
Arbitron only reports complete ratings information on a quarterly basis.

   In the broadcasting industry, radio stations often utilize trade or barter
agreements to reduce expenses by exchanging advertising time for goods or
services. In order to maximize cash revenue from our spot inventory, we
minimize the use of trade agreements and have reduced trade revenue to
approximately 2% of our gross revenue in 2000, down from approximately 4% in
1996.

                                      38
<PAGE>

   Radio One calculates same station growth over a particular period by
comparing performance of stations owned or operated under a local marketing
agreement during the current period with the performance of the same stations
for the corresponding period in the prior year. However, no station will be
included in such a comparison unless it has been owned or operated under a
local marketing agreement for at least one month of every quarter included in
each of the current and corresponding prior-year periods.

                       RADIO ONE, INC. AND SUBSIDIARIES
                             RESULTS OF OPERATIONS

   The following table summarizes Radio One's historical consolidated results
of operations:

<TABLE>
<CAPTION>
                                                        Fiscal Years Ended
                                                           December 31,
                                                     --------------------------
                                                      1998     1999      2000
                                                     -------  -------  --------
                                                          (In Thousands)
<S>                                                  <C>      <C>      <C>
Statement of Operations:
Net broadcast revenue..............................  $46,109  $81,703  $155,666
Station operating expenses.........................   24,501   44,259    77,280
Corporate expenses.................................    2,800    4,155     6,115
Stock-based compensation...........................       --      225       188
Depreciation and amortization......................    8,445   17,073    63,207
                                                     -------  -------  --------
  Operating income.................................   10,363   15,991     8,876
Interest expense...................................   11,455   15,279    32,407
Other income, net..................................      358    2,149    20,084
                                                     -------  -------  --------
(Loss) income before (benefit) provision for income
 taxes
 and extraordinary item............................     (734)   2,861    (3,447)
Income tax (benefit) provision.....................   (1,575)   2,728       804
                                                     -------  -------  --------
  (Loss) income before extraordinary item..........      841      133    (4,251)
Extraordinary loss.................................       --       --        --
                                                     -------  -------  --------
  Net (loss) income................................  $   841     $133  $ (4,251)
                                                     =======  =======  ========
  Net loss applicable to common stockholders.......  $(2,875) $(1,343) $(13,487)
                                                     =======  =======  ========
Broadcast cash flow(/1/)...........................  $21,608  $37,444    78,386
Broadcast cash flow margin(/1/)....................      47%      46%       50%
EBITDA(/1/)........................................  $18,808  $33,289  $ 72,271
After-tax cash flow(/1/)...........................    7,248   16,303    48,712
</TABLE>
--------
(/1/See)"Selected Financial Data--Non-GAAP Measures".

Fiscal Year Ended December 31, 2000 Compared to Fiscal Year Ended December 31,
1999

   Net Broadcast Revenue. Net broadcast revenue increased to approximately
$155.7 million for the fiscal year ended December 31, 2000 from approximately
$81.7 million for the fiscal year ended December 31, 1999, or 91%. This
increase in net broadcast revenue was the result of continuing broadcast
revenue growth in the markets in which we have operated for at least one year,
as well as from revenue contributed from radio stations acquired within the
last year, particularly the stations acquired from Clear Channel
Communications and AMFM, which accounted for approximately $34.1 million.

   Operating Expenses. Operating expenses increased to approximately $77.3
million for the fiscal year ended December 31, 2000 from approximately $44.3
million for the fiscal year ended December 31, 1999, or 75%. This increase in
expenses was related to our rapid expansion within all of the markets in which
we operate, including increased variable costs associated with increased
revenue, as well as start-up, expansion and operating

                                      39
<PAGE>

expenses of approximately $14.3 million associated with the stations acquired
from Clear Channel Communications and AMFM.

   Corporate Expenses. Corporate expenses (including stock-based compensation)
increased to approximately $6.3 million for the fiscal year ended December 31,
2000, from approximately $4.4 million for the fiscal year ended December 31,
1999, or 43%. This increase was due primarily to growth in the corporate staff
consistent with our overall expansion.

   Depreciation and Amortization. Depreciation and amortization increased to
approximately $63.2 million for the fiscal year ended December 31, 2000, from
approximately $17.1 million for the fiscal year ended December 31, 1999, or
270%. This increase was due primarily to our asset growth as well as our
acquisitions in 1999 and 2000.

   Operating Income. Operating income decreased to approximately $8.9 million
for the fiscal year ended December 31, 2000 from approximately $16.0 million
for the fiscal year ended December 31, 1999, or by 44%. This decrease was
attributable to higher operating and corporate expenses as described above, as
well as higher depreciation and amortization expenses associated with several
of our acquisitions made within the last year.

   Interest Expense. Interest expense increased to approximately $32.4 million
for the fiscal year ended December 31, 2000 from approximately $15.3 million
for the fiscal year ended December 31, 1999, or 112%. This increase relates
primarily to additional borrowings made in the third quarter of 2000 in
conjunction with the acquisition of radio stations from Clear Channel
Communications and AMFM.

   Other Income. Other income (almost exclusively interest income) increased
to approximately $20.1 million for the fiscal year ended December 31, 2000
from approximately $2.1 million for the fiscal year ended December 31, 1999 or
857%. This increase was due to our high cash and investment balances following
our equity offerings in November 1999, March 2000 and July 2000, as well as
cash generated from operations.

   (Loss) Income before (Benefit) Provision for Income Taxes. Loss before
benefit for income taxes was approximately $3.4 million for the fiscal year
ended December 31, 2000 compared to income before provision for income taxes
of approximately $2.9 million for the fiscal year ended December 31, 1999.
This loss before benefit for income taxes was due primarily to the acquisition
of radio stations from Clear Channel Communications and AMFM as mentioned
above.

   Net (Loss) Income. Net loss was approximately $4.3 million for the twelve
months ended December 31, 2000 compared to net income of approximately
$133,000 for the twelve months ended December 31, 1999. This decrease in net
income was due to a loss before provision for income taxes partially offset by
a 71% lower provision for income taxes than in the previous year.

   Broadcast Cash Flow. Broadcast cash flow (See "Selected Financial Data--
Non-GAAP Measures") increased to approximately $78.4 million for the twelve
months ended December 31, 2000 from approximately $37.4 million for the twelve
months ended December 31, 1999 or 110%. This increase was attributable to the
increases in broadcast revenue partially offset by higher operating expenses
as described above.

   Our broadcast cash flow margin increased to approximately 50% for the
fiscal year ended December 31, 2000, from 46% for the fiscal year ended
December 31, 1999. This overall increase for the year was the result of our
growth in revenue exceeding our expense growth and the acquisition of certain
radio stations with higher broadcast cash flow margins. On a same station
basis, broadcast cash flow margin for the period increased to approximately
51% in 2000, from approximately 46% in 1999. The increase in those stations we
have owned or operated for more than one year was the result of strong revenue
gains in these more mature markets partially offset by slower expense growth
in those markets.

   EBITDA. Earnings before interest, taxes, depreciation, and amortization
(EBITDA) (See "Selected Financial Data--Non-GAAP Measures"), and excluding
non-cash compensation expense, increased to

                                      40
<PAGE>

approximately $72.3 million for the twelve months ended December 31, 2000 from
approximately $33.3 million for the twelve months ended December 31, 1999, or
117%. This increase was attributable to the increase in broadcast revenue
partially offset by higher operating expenses and higher corporate expenses
associated with our growth.

Fiscal Year Ended December 31, 1999 Compared to Fiscal Year Ended December 31,
1998

   Net Broadcast Revenue. Net broadcast revenue increased to approximately
$81.7 million for the fiscal year ended December 31, 1999 from approximately
$46.1 million for the fiscal year ended December 31, 1998 or 77%. This
increase in net broadcast revenue was the result of continuing broadcast
revenue growth in all of the markets in which we have operated for at least
one year as we benefitted from historical ratings increases at certain of our
radio stations, improved power ratios at these stations, as well as from
industry growth in each of these markets. Additional revenue gains of
approximately $18.6 million were derived from our mid-1999 acquisitions in
Cleveland and Richmond (where we also operate stations under a time brokerage
agreement) as well as the March 30, 1999 acquisition of Radio One of Atlanta,
Inc.

   Operating Expenses. Operating expenses increased to approximately $44.3
million for the fiscal year ended December 31, 1999 from approximately $24.5
million for the fiscal year ended December 31, 1998 or 81%. This increase in
expenses was related to our rapid expansion within all of the markets in which
we operate including higher costs in Washington associated with improved
programming on our morning shows as well as start-up, expansion and operating
expenses of approximately $10.7 million in our newer markets of Cleveland and
Richmond, in particular, as well as the March 30, 1999 acquisition of Radio
One of Atlanta, Inc.

   Corporate Expenses. Corporate expenses (including stock-based compensation)
increased to approximately $4.4 million for the fiscal year ended December 31,
1999, from approximately $2.8 million for the fiscal year ended December 31,
1998, or 57%. This increase was due primarily to growth in the corporate staff
consistent with our overall expansion and costs associated with operating as a
public company.

   Depreciation and Amortization. Depreciation and amortization increased to
approximately $17.1 million for the fiscal year ended December 31, 1999, from
approximately $8.4 million for the fiscal year ended December 31, 1998, or
104%. This increase was due primarily to our asset growth as well as our
acquisitions in 1998 and 1999.

   Operating Income. Operating income increased to approximately $16.0 million
for the fiscal year ended December 31, 1999 from approximately $10.4 million
for the fiscal year ended December 31, 1998 or 54%. This increase was
attributable to higher revenue as described above offset by higher
depreciation and amortization expenses associated with several of our
acquisitions made within the last year.

   Interest Expense. Interest expense increased to approximately $15.3 million
for the fiscal year ended December 31, 1999 from approximately $11.5 million
for the fiscal year ended December 31, 1998 or 33%. This increase relates
primarily to interest incurred on higher average borrowings outstanding under
our bank credit facility as a result of borrowings to fund certain
acquisitions.

   Other Income. Other income increased to approximately $2.1 million for the
fiscal year ended December 31, 1999 from approximately $0.4 million for the
fiscal year ended December 31, 1998 or 425%. This increase was due to our
higher cash balances following our two equity offerings during the year.

   Income (loss) before Provision (Benefit) for Income Taxes. Income before
provision (benefit) for income taxes increased to approximately $2.9 million
for the fiscal year ended December 31, 1999 from a loss of approximately $0.7
million for the fiscal year ended December 31, 1998. This increase was due to
higher operating and interest income partially offset by higher depreciation,
amortization and interest expense, as described above.

                                      41
<PAGE>

   Net Income. Net income decreased to approximately $0.1 million for the
fiscal year ended December 31, 1999 from approximately $0.8 million for the
fiscal year ended December 31, 1998 or 88%. The decrease in net income for the
fiscal year was due to higher income before provision for income taxes in 1999
offset by an income tax provision in 1999 versus a tax benefit in 1998 related
to an elimination of a deferred income tax asset valuation reserve.

   Broadcast Cash Flow. Broadcast cash flow (See "Selected Financial Data--
Non-GAAP Measures") increased to approximately $37.4 million for the fiscal
year ended December 31, 1999 from approximately $21.6 million for the fiscal
year ended December 31, 1998 or 73%. This increase was attributable to the
increases in broadcast revenue partially offset by higher operating expenses
as described above.

   Our broadcast cash flow margin decreased to approximately 46% for the
fiscal year ended December 31, 1999, from 47% for the fiscal year ended
December 31, 1998. This overall decrease for the year was the result of the
acquisition of radio stations with considerably lower profit margins than
those operated by us for periods longer than one year. On a same station
basis, broadcast cash flow margin for the period increased to approximately
51% in 1999 from approximately 48% in 1998. The increase in those stations we
have owned or operated for more than one year was the result of strong revenue
gains in these more mature markets partially offset by slower expense growth
in those markets.

   EBITDA. Earnings before interest, taxes, depreciation, and amortization
(EBITDA) (See "Selected Financial Data--Non-GAAP Measures"), and excluding
stock-based compensation expense, increased to approximately $33.3 million for
the fiscal year ended December 31, 1999 from approximately $18.8 million for
the fiscal year ended December 31, 1998 or 77%. This increase was attributable
to the increase in broadcast revenue partially offset by higher operating
expenses and higher corporate expenses, as described above.

Liquidity and Capital Resources

   Our primary source of liquidity is cash provided by operations and, to the
extent necessary, undrawn commitments available under our bank credit
facility. Our ability to borrow in excess of the commitments set forth in our
credit agreement is limited by the terms of the indenture governing our 12%
Notes due 2004. Additionally, such terms place restrictions on Radio One with
respect to the sale of assets, liens, investments, dividends, debt repayments,
capital expenditures, transactions with affiliates, consolidation and mergers,
and the issuance of equity interests among other things.

   We have used, and will continue to use, a significant portion of our
capital resources to consummate acquisitions. These acquisitions were or will
be funded from (i) our bank credit facility, (ii) the proceeds of the
historical offerings of our common stock and preferred stock, (iii) the
proceeds of future common and/or preferred stock, and/or debt offerings, and
(iv) internally generated cash flow.

   Radio One's balance of cash and cash equivalents was approximately $20.9
million as of December 31, 2000, and approximately $6.2 million as of December
31, 1999. This increase in cash resulted primarily from our equity offerings
in March 2000 and July 2000, as well as higher cash from operations. We have
entered into a bank credit facility under which we have borrowed $500.0
million in term loans and may borrow up to $250.0 million on a revolving
basis, and which we have historically drawn down as capital was required,
primarily for acquisitions. On December 31, 2000, $187.5 million was available
to be drawn down from our bank credit facility (subject to covenant
compliance), of which we had drawn down $62.5 million.

   Net cash flow from operating activities increased to approximately $55.7
million for the fiscal year ended December 31, 2000, from approximately $18.2
million for the fiscal year ended December 31, 1999, or 206%. This increase
was primarily due to lower net income and an increase in trade account
receivables more than offset by higher non-cash expenses and an increase in
payables. Non-cash expenses of depreciation and amortization increased to
approximately $63.2 million for fiscal year ended December 31, 2000, from
approximately $17.1 million for the fiscal year ended December 31, 1999, or
270%, due primarily to our

                                      42
<PAGE>

acquisitions in 2000, particularly the Clear Channel and AMFM acquisitions.
Non-cash expenses of amortization of debt financing costs, unamortized
discount and deferred interest decreased to approximately $2.8 million for the
fiscal year ended December 31, 2000, from approximately $4.6 million for the
fiscal year ended December 31, 1999, or 39%, due primarily to the terms of the
12% Notes due 2004.

   Net cash flow used in investing activities increased to approximately
$1,220.0 million for the fiscal year ended December 31, 2000, compared to
approximately $346.6 million for the fiscal year ended December 31, 1999, or
252%. During the fiscal year ended December 31, 2000, we used $1,469.6 million
of cash to acquire radio stations or make deposits on radio stations we have
agreed to acquire. Additionally, we sold $256.4 million worth of short-term
investment securities, made purchases of capital equipment totaling
approximately $3.7 million and made approximately $1.2 million worth of
investments in other companies. During the fiscal year ended December 31,
1999, we used $85.4 million of cash to acquire radio stations or make deposits
on radio stations we had agreed to acquire and made net purchases of capital
equipment totaling approximately $3.3 million.

   Net cash flow from financing activities was approximately $1,179.0 million
for the fiscal year ended December 31, 2000. During the fiscal year ended
December 31, 2000, we completed a common stock offering and a convertible
preferred stock offering and raised approximately $635.9 million net of
offering costs. Also during the fiscal year ended December 31, 2000, we
borrowed approximately $570.0 million to fund various acquisitions and repaid
$7.6 million worth of debt with cash from operations and from our two equity
offerings. In conjunction with these borrowings and our 12% Notes due 2004, we
incurred approximately $6.2 million in deferred debt financing costs. During
the fiscal year ended December 31, 1999 we completed our initial public stock
offering and a follow-on stock offering and raised approximately $412.0
million net of offering costs. Also during the fiscal year ended December 31,
1999 we borrowed approximately $75.7 million to fund various acquisitions and
repaid $128.8 million worth of debt with cash from operations and from our two
equity offerings. In conjunction with these borrowings and our 12% Notes due
2004, we incurred approximately $0.6 million in deferred debt financing costs.
Additionally, during the fiscal year ended December 31, 1999, we repaid
approximately $28.2 million of Cumulative Redeemable Preferred Stock with
proceeds from our initial public offering. As a result, cash and cash
equivalents increased by approximately $14.7 million during the fiscal year
ended December 31, 2000, compared to an increase of approximately $1.8 million
during the fiscal year ended December 31, 1999.

   We continuously review, and are currently reviewing, opportunities to
acquire additional radio stations, primarily in the top 50 African-American
markets. As of the date of this report, other than the pending transactions
with Blue Chip Broadcasting, Inc., EMMIS Communications and Sinclair
Telecable, Inc., we have no written or oral understandings, letters of intent
or contracts to acquire radio stations. We anticipate that any future radio
station acquisitions would be financed through funds generated from
operations, equity financings, permitted debt financings, debt financings
through unrestricted subsidiaries or a combination of these sources. However,
there can be no assurance that financing from any of these sources, if
available, will be available on favorable terms.

   Management believes that, based on current levels of operations and
anticipated internal growth, cash flow from operations together with other
available sources of funds will be adequate for the foreseeable future to
consummate the acquisitions of radio stations we have agreed to acquire, to
make required payments of interest on Radio One's indebtedness, to fund
anticipated capital expenditures and working capital requirements and to
enable us to comply with the terms of our debt agreements. Our ability to meet
our debt service obligations and reduce our total debt, and our ability to
refinance the 12% Notes due 2004 at or prior to their scheduled maturity date
in 2004, will depend upon our future performance which, in turn, will be
subject to general economic conditions and to financial, business and other
factors, including factors beyond our control. We estimate that the amount
required to fund our debt coverage and the obligations related to our
preferred stock in 2001 will be approximately $80 million after giving pro
forma effect to the Blue Chip acquisition and the refinancing of our senior
subordinated notes. For 2001, we anticipate maintenance capital expenditures
to be between $4.0 million

                                      43
<PAGE>

and $5.0 million and total capital expenditures to be between $6.0 million and
$7.0 million. The 12% Notes due 2004 are redeemable on or after May 15, 2001.
The Company may redeem these notes during 2001 through the issuance of new
debt at a lower interest rate.

Recent Accounting Pronouncements

   The Financial Accounting Standards Board (FASB) has issued an Exposure
Draft, Proposed Statement of Financial Accounting Standards, Business
Combinations and Intangible Assets--Accounting for Goodwill. The Exposure
Draft contains the FASB's tentative decisions about requiring the use of a
non-amortization approach to account for certain purchased intangible assets.
Under the non-amortization approach, certain intangible assets would be tested
for impairment, rather than being amortized to earnings.

2001 Outlook

   The following table contains our revenue, cash flow and earnings guidance,
as of February 8, 2001, for the twelve month period ending December 31, 2001.
These estimates are based on current Generally Accepted Accounting Principles
(GAAP) for the treatment of goodwill and other intangibles and do not consider
any impact of the current Financial Accounting Standards Board (FASB) project
on Business Combinations that may change the accounting treatment of goodwill
and other intangibles, effectively increasing reported earnings per share for
companies such as ours. We anticipate recording approximately $110.0 million
of annual amortization of goodwill and FCC licenses in 2001. These estimates
include expected results for only those stations owned and/or operated by us
on the date of this report and only take into account our current capital
structure and assume current interest rate levels in order to compute expected
interest expense for the periods in question.

                         Radio One, Inc. 2001 Guidance
                     (in millions, except per share data)

<TABLE>
<CAPTION>
                                          Q1      Q2      Q3      Q4      FY
                                        ------  ------  ------  ------  ------
<S>                                     <C>     <C>     <C>     <C>     <C>
Net revenue............................ $ 49.5  $ 67.4  $ 71.0  $ 70.4  $258.1
Operating expenses.....................   28.0    31.0    31.4    30.9   121.1
Broadcast cash flow(/1/)(/4/)..........   21.5    36.4    39.7    39.5   137.0
Corporate Overhead.....................    1.8     1.8     2.0     2.0     7.5
EBITDA(/2/)(/4/).......................   19.7    34.6    37.7    37.5   129.5
Interest...............................   15.0    14.2    13.9    13.6    56.9
Depreciation and amortization..........   30.0    30.0    30.0    30.0   120.0
Tax benefit............................    8.3     3.3     2.2     2.2    16.0
Net loss...............................  (17.7)   (7.0)   (4.7)   (4.6)  (34.0)
                                        ======  ======  ======  ======  ======
Preferred Dividends.................... $  5.0  $  5.0  $  5.0  $  5.0  $ 20.2
After-tax cash flow(/3/)(/4/)..........    1.2    16.6    19.3    19.3    56.4
Avg. shares outstanding (basic)........   86.5    86.7    87.0    87.2    87.0
Avg. shares outstanding (diluted)......   87.0    87.0    87.5    87.5    87.5
Per Share Amounts Diluted:
Net loss............................... $(0.20) $(0.08) $(0.05) $(0.05) $(0.39)
</TABLE>
--------
(/1/Operating)income excluding depreciation, amortization, corporate overhead,
    non-recurring items and other non-cash charges.
(/2/Broadcast)cash flow less corporate overhead.
(/3/Income)before income taxes and extraordinary items plus depreciation,
    amortization and non-cash compensation, less the current income tax
    liability (or plus benefit) and less preferred stock dividends.
(/4/See)"Selected Financial Data--Non-GAAP Measures".

                                      44
<PAGE>

   We estimate that Blue Chip Broadcasting, Inc. will have $11.5 million in
broadcast cash flow for all of 2001 and that the broadcast cash flow margins
in 2001 for the stations we will own and/or operate as a result of our
acquisition of Blue Chip will be in the low 30% range.

Impact of Inflation

   We believe that inflation has not had a material impact on our results of
operations for each of our fiscal years in the three-year period ended
December 31, 2000. However, there can be no assurance that future inflation
would not have an adverse impact on our operating results and financial
condition.

Seasonality

   Seasonal net broadcast revenue fluctuations are common in the radio
broadcasting industry and are due primarily to fluctuations in advertising
expenditures by local and national advertisers. Radio One's first fiscal
quarter generally produces the lowest net broadcast revenue for the year.

Overview of Risks

   Our future operating results could be adversely affected by a number of
risks and uncertainties, certain of which are described below. The risks and
uncertainties described below are not the only risks we face. Additional risks
and uncertainties not currently known to us or that we currently deem
immaterial may impair our business operations. If any of the risks described
below actually occur, our business, results of operations and financial
condition could be materially and adversely affected.

  .  We may have difficulty integrating the operations, systems and
     management of the stations that we have recently acquired or agreed to
     acquire.

  .  We may not successfully identify and consummate future acquisitions.

  .  Acquired stations may not increase our broadcast cash flow or yield
     other anticipated benefits.

  .  Required regulatory approvals may result in unanticipated delays in
     completing acquisitions.

  .  The loss of key personnel could disrupt the management of our business,
     including impairing our ability to execute our acquisition and operating
     strategies and lowering our standing in the radio broadcast industry.

  .  We compete for advertising revenue against radio stations and other
     media, many of which have greater resources than we do.

  .  Our bank credit facility and the agreements governing our other
     outstanding debt contain covenants that restrict, among other things,
     our ability to incur additional debt, pay cash dividends, purchase our
     capital stock, make capital expenditures, make investments or other
     restricted payments, swap or sell assets, engage in transactions with
     related parties, secure non-senior debt with our assets, or merge,
     consolidate or sell all or substantially all of our assets.

  .  Our bank credit facility requires that we obtain our banks' consent for
     acquisitions that do not meet specific criteria. These restrictions may
     make it more difficult to pursue our acquisition strategy. Our bank
     credit facility also requires that we maintain specific financial
     ratios. Events beyond our control could affect our ability to meet those
     financial ratios, and we cannot assure you that we will meet them.

  .  A portion of the loans under our bank credit facility in the amount of
     $150.0 million will be due in February 2002, and the remainder of the
     loans under our bank credit facility will be due in August 2007. A
     breach of any of the covenants contained in our bank credit facility
     could allow our lenders to declare all amounts outstanding under our
     bank credit facility to be immediately due and payable. In addition, our
     banks could proceed against the collateral granted to them to secure
     that indebtedness. If the amounts outstanding under our bank credit
     facility are accelerated, we cannot assure you that our assets will be
     sufficient to repay in full the money owed to the banks or to our other
     debt holders.

                                      45
<PAGE>

  .  Our substantial level of indebtedness could adversely affect us for
     various reasons, including limiting our ability to:

    .  obtain additional financing for working capital, capital
       expenditures, acquisitions, debt payments or other corporate
       purposes;

    .  have sufficient funds available for operations, future business
       opportunities or other purposes;

    .  compete with competitors that have less debt than we do; and

    .  react to changing market conditions, changes in our industry and
       economic downturns.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

   We do not have significant interest rate risk related to our Notes due
2004, which have an interest rate of 12%. We do not have foreign currency risk
as we have no foreign operations. We do not have any derivative commodity
instruments or other financial instruments such as foreign currency forwards,
futures and options, and foreign currency denominated debt. The Company has
entered into swap agreements to reduce exposure to interest rate fluctuations
on certain commitments. We do not have commodity price risk or other relevant
market risks.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

   The consolidated financial statements of Radio One required by this item
are filed with this report on Pages F-1 to F-21.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

   None.

                                      46
<PAGE>

                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

   The information with respect to directors and executive officers required
by this Item 10 is incorporated in this report by reference to the information
set forth under the caption "Nominees for Class A Director," "Nominees for
Other Director," and "Executive Officers" in our proxy statement for the 2001
Annual Meeting of Stockholders to be held during June 2001, which is expected
to be filed with the Commission within 120 days after the close of our fiscal
year.

ITEM 11. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

   The information required by this Item 11 is incorporated in this report by
reference to the information set forth under the caption "Compensation of
Directors and Executive Officers" in the 2001 proxy statement. The sections
entitled "Report of the Compensation Committee of the Board on Executive
Compensation" and "Stockholder Return and Performance Presentation" in the
2001 proxy statement are not incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   The information required by this Item 12 is incorporated in this report by
reference to the information set forth under the caption "Principal
Stockholders" in the 2001 proxy statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   The information required by this Item 13 is incorporated in this report by
reference to the information set forth under the caption "Certain
Relationships and Related Transactions" in the 2001 proxy statement.

                                      47
<PAGE>

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

   (a)(1) Financial Statements

   The following financial statements required by this item are submitted in a
separate section beginning on page F-1 of this report:

    Index to Financial Statements
    Report of Independent Public Accountants
    Consolidated Balance Sheets as of December 31, 1999 and 2000
    Consolidated Statements of Operations for the years ended December 31,
     1998, 1999 and 2000
    Consolidated Statements of Changes in Stockholders' Equity for the
     years ended December 31, 1998, 1999 and 2000
    Consolidated Statements of Cash Flows for the years ended December 31,
     1998, 1999 and 2000
    Notes to Consolidated Financial Statements

   (a)(2) EXHIBITS: The following exhibits are filed as part of this annual
statement.

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
 3.1     Amended and Restated Certificate of Incorporation of Radio One, Inc.
         (dated as of May 4, 2000),
         as filed with the State of Delaware on May 9, 2000 (incorporated by
         reference to Radio One's Quarterly Report on Form 10-Q for the period
         ended March 31, 2000 (File No. 000-25969; Film No. 631638)).
 3.1.1   Certificate of Amendment (dated as of September 21, 2000) of the
         Amended and Restated Certificate of Incorporation of Radio One, Inc.
         (dated as of May 4, 2000), as filed with the State of Delaware on
         September 21, 2000 (incorporated by reference to Radio One's Current
         Report on Form 8-K filed October 6, 2000 (File No. 000-25969; Film No.
         736375)).
 3.2     Amended and Restated By-laws of Radio One, Inc., amended as of
         September 15, 2000 (incorporated by reference to Radio One's Current
         Report on Form 8-K filed October 6, 2000 (File No. 000-25969; Film No.
         736375)).
 3.3     Certificate Of Designations, Rights and Preferences of the 6 1/2%
         Convertible Preferred Securities Remarketable Term Income Deferrable
         Equity Securities (HIGH TIDES) of Radio One, Inc., as filed with the
         State of Delaware on July 13, 2000 (incorporated by reference to Radio
         One's Quarterly Report on Form 10-Q for the period ended June 30, 2000
         (File No. 000-25969; Film No. 698190)).
 4.1     Indenture dated as of May 15, 1997 among Radio One, Inc., Radio One
         Licenses, Inc. and United States Trust Company of New York
         (incorporated by reference to Radio One's Annual Report on Form 10-K
         for the period ended December 31, 1997 (File No. 333-30795; Film No.
         98581327)).
 4.2     First Supplemental Indenture dated as of June 30, 1998, to Indenture
         dated as of May 15, 1997, by and among Radio One, Inc., as Issuer and
         United States Trust Company of New York, as Trustee, by and among
         Radio One, Inc., Bell Broadcasting Company, Radio One of Detroit,
         Inc., and United States Trust Company of New York, as Trustee
         (incorporated by reference to Radio One's Current Report on Form 8-K
         filed July 13, 1998 (File No. 333-30795; Film No. 98665139)).
 4.3     Second Supplemental Indenture dated as of December 23, 1998, to
         Indenture dated as of May 15, 1997, by and among Radio One, Inc., as
         Issuer and United States Trust Company of New York, as Trustee, by and
         among Radio One, Inc., Allur-Detroit, Allur Licenses, Inc., and United
         States Trust Company of New York, as Trustee (incorporated by
         reference to Radio One's Current Report on Form 8-K filed January 12,
         1999 (File No. 333-30795; Film No. 99504706)).
 4.7     Standstill Agreement dated as of June 30, 1998 among Radio One, Inc.,
         the subsidiaries of Radio One, Inc., United States Trust Company of
         New York and the other parties thereto (incorporated by reference to
         Radio One's Quarterly Report on Form 10-Q for the period ended
         June 30, 1998 (File No. 333-30795; Film No. 98688998)).
</TABLE>

                                      48
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
  Number                               Description
 -------                               -----------
 <C>      <S>
  4.9     Stockholders Agreement dated as of March 2, 1999 among Catherine L.
          Hughes and Alfred C. Liggins, III (incorporated by reference to Radio
          One's Quarterly Report on Form 10-Q for the period ended June 30,
          1999 (File No. 000-25969; Film No. 99686684)).
  4.10    Registration Rights Agreement, dated as of July 14, 2000, by and
          among Radio One, Inc., and Credit Suisse First Boston Corporation,
          Deutsche Bank Securities Inc., Morgan Stanley & Co. Incorporated,
          Bank of America Securities LLC, and First Union Securities, Inc., as
          the Initial Purchases of Radio One, Inc.'s 6 1/2% Convertible
          Preferred Securities Remarketable Term Income Deferrable Equity
          Securities (HIGH TIDES) (incorporated by reference to Radio One's
          Quarterly Report on Form 10-Q for the period ended June 30, 2000
          (File No. 000-25969; Film No. 698190)).
  4.11    Remarketing Agreement, dated as of July 14, 2000, by and among Radio
          One, Inc., American Stock Transfer & Trust Co., as Tender Agent and
          Credit Suisse First Boston Corporation, as Remarketing Agent, for
          Radio One, Inc.'s 6 1/2% Convertible Preferred Securities
          Remarketable Term Income Deferrable Equity Securities (HIGH TIDES)
          (incorporated by reference to Radio One's Quarterly Report on Form
          10-Q for the period ended June 30, 2000 (File No. 000-25969; Film No.
          698190)).
  4.12    Global Security Certificate for Radio One, Inc.'s 6 1/2% Convertible
          Preferred Securities Remarketable Term Income Deferrable Equity
          Securities (HIGH TIDES) (incorporated by reference to Radio One's
          Quarterly Report on Form 10-Q for the period ended June 30, 2000
          (File No. 000-25969; Film No. 698190)).
  4.13    Registration Rights Agreement, dated February 7, 2001, by and between
          Radio One, Inc. and certain stockholders of Blue Chip Broadcasting,
          Inc. listed therein (incorporated by reference to Exhibit 4.1 of
          Radio One's Current Report on Form 8-K filed February 8, 2001 (File
          No. 000-25969; Film No. 1528282)).
 10.1     Office Lease dated February 3, 1997 between National Life Insurance
          Company and Radio One, Inc. for premises located at 5900 Princess
          Garden Parkway, Lanham, Maryland, as amended on the period ended
          December 31, 1997 (File No. 333-30795; Film No. 98581327)).
 10.1(a)  Amendment to Office Lease dated January 22, 1999 between National
          Life Insurance Company and Radio One, Inc. for premises located at
          5900 Princess Garden Parkway, Lanham, Maryland (incorporated by
          reference to Radio One's Quarterly Report on Form 10-Q for the period
          ended June 30, 1999 (File No. 000-25969; Film No. 99686684)).
 10.3     Office Lease commencing November 1, 1993 between Chalrep Limited
          Partnership and Radio One, Inc., with respect to the property located
          at 100 St. Paul Street, Baltimore, Maryland (incorporated by
          reference to Radio One's Annual Report on Form 10-K for the period
          ended December 31, 1997 (File No. 333-30795; Film No. 98581327)).
 10.6     Warrantholders' Agreement dated as of June 6, 1995, as amended by the
          First Amendment to Warrantholders' Agreement dated as of May 19,
          1997, among Radio One, Inc., Radio One Licenses, Inc. and the other
          parties thereto (incorporated by reference to Radio One's Annual
          Report on Form 10-K for the period ended December 31, 1997 (File No.
          333-30795; Film No. 98581327)).
 10.7(a)  Second Amendment to the Warrantholders' Agreement dated as of May 3,
          1999, among Radio One, Inc., Radio One Licenses, Inc. and the other
          parties thereto (incorporated by reference to Radio One's Quarterly
          Report on Form 10-Q for the period ended June 30, 1999 (File No. 000-
          25969; Film No. 99686684)).
 10.45    Asset Purchase Agreement dated as of May 6, 1999 relating to the
          acquisition of WCDX-FM, licensed to Mechanicsville, Virginia, WPLZ-
          FM, licensed to Petersburg, Virginia, WJRV-FM licensed to Richmond,
          Virginia, and WGCV-AM licensed to Petersburg, Virginia (incorporated
          by reference to Radio One's Registration Statement on Form S-1 filed
          on October 25, 1999 (File No. 333-89607; Film No. 99732728)).
 10.45(a) Time Brokerage Agreement dated May 5, 1999 among Radio One, Inc. and
          Sinclair Telecable, Inc. Commonwealth Broadcasting, L.L.C. and Radio
          One, Inc. (incorporated by reference to Radio One's Quarterly Report
          on Form 10-Q for the period ended June 30, 1999 (File No. 000-25969;
          Film No. 99686684)).
</TABLE>

                                       49
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
 10.52   Asset Purchase Agreement dated as of May 24, 1999 relating to the
         acquisition of WBOT-FM, licensed to Brockton, Massachusetts
         (incorporated by reference to Radio One's Quarterly Report on Form 10-
         Q for the period ended June 30, 1999 (File No. 000-25969; Film No.
         99686684)).
 10.53   Time Brokerage Agreement dated May 24, 1999 among Radio One, Inc. and
         Radio Station WBOT-FM, Brockton, Massachusetts (incorporated by
         reference to Radio One's Quarterly Report on Form 10-Q for the period
         ended June 30, 1999 (File No. 000-25969; Film No. 99686684)).
 10.55   Amended and Restated Employment Agreement between Radio One, Inc. and
         Scott R. Royster dated effective as of October 18, 2000 (previously
         filed).
 10.56   Amended and Restated Employment Agreement between Radio One, Inc. and
         Linda J. Eckard Vilardo dated effective as of October 31, 2000
         (previously filed).
 10.57   Asset Purchase Agreement dated as of December 1, 1999 relating to the
         acquisition of WPLY-FM, licensed to Philadelphia, Pennsylvania
         (incorporated by reference to Radio One's Registration Statement on
         Form S-1 on February 14, 2000(File No. 333-30285; Film No. 537846)).
 10.58   Asset Purchase Agreement dated as of March 11, 2000 relating to the
         acquisition of KMJQ-FM and KBXX-FM, licensed to Houston, Texas,
         WVCG(AM), licensed to Coral Gables, Florida, WZAK-FM, licensed to
         Cleveland, Ohio, WJMO (AM), licensed to Cleveland Heights, Ohio, KKBT-
         FM, licensed to Los Angeles, California, KBFB-FM, licensed to Dallas,
         Texas, WJMZ-FM, licensed to Anderson, South Carolina, WFXC-FM,
         licensed to Durham, North Carolina, WFXK-FM, licensed to Tarboro,
         North Carolina, WNNL-FM, licensed to Fuquay-Varina, North Carolina and
         WQOK-FM, licensed to South Boston, Virginia (incorporated by reference
         to Radio One's Quarterly Report on Form 10-Q for the period ended
         March 31, 2000 (File No. 000-25969; Film No. 631638)).
 10.59   Agreement and Plan of Merger dated as of March 11, 2000 relating to
         the acquisition of WCCJ-FM, licensed to Harrisburg, North Carolina,
         WFXA-FM and WTHB (AM), licensed to Augusta, Georgia, WAKB-FM, licensed
         to Wrens, Georgia, WAEG-FM, licensed to Evans, Georgia and WAEJ-FM,
         licensed to Waynesboro, Georgia (incorporated by reference to Radio
         One's Quarterly Report on Form 10-Q for the period ended March 31,
         2000 (File No. 000-25969; Film No. 631638)).
 10.60   Asset Purchase Agreement dated as of March 11, 2000 relating to the
         acquisition of WHHH-FM, licensed to Indianapolis, Indiana, WBKS-FM,
         licensed to Greenwood, Indiana, WYJZ-FM, licensed to Lebanon, Indiana
         and W53AV, licensed to Indianapolis, Indiana (incorporated by
         reference to Radio One's Quarterly Report on Form 10-Q for the period
         ended March 31, 2000 (File No. 000-25969; Film No. 631638)).
 10.61   Purchase Agreement, dated as of July 10, 2000, by and among Radio One,
         Inc., and Credit Suisse First Boston Corporation, Deutsche Bank
         Securities Inc., Morgan Stanley & Co. Incorporated, Bank of America
         Securities LLC, and First Union Securities, Inc., as the Initial
         Purchases of Radio One, Inc.'s 6 1/2% Convertible Preferred Securities
         Remarketable Term Income Deferrable Equity Securities (HIGH TIDES)
         (incorporated by reference to Radio One's Quarterly Report on
         Form 10-Q for the period ended June 30, 2000 (File No. 000-25969; Film
         No. 698190)).
 10.62   Second Amended and Restated Credit Agreement, dated as of July 17,
         2000, by and among Radio One, Inc., Bank of America, N.A., Credit
         Suisse First Boston, First Union National Bank, Toronto Dominion
         (Texas), Inc., Bankers Trust Company, and the Several Lenders From
         Time to Time Parties thereto (incorporated by reference to Radio One's
         Quarterly Report on Form 10-Q for the period ended September 30, 2000
         (File No. 000-25969; Film No. 764960)).
 10.63   Merger Agreement, dated February 7, 2001, by and among Radio One,
         Inc., Blue Chip Merger Subsidiary, Inc., Blue Chip Broadcasting, Inc.,
         and certain stockholders of Blue Chip Broadcasting, Inc. listed
         therein (incorporated by reference to Exhibit 2.1 of Radio One's
         Current Report on Form 8-K filed February 8, 2001 (File No. 000-25969;
         Film No. 1528282)).
 21.1    Subsidiaries of Radio One, Inc (previously filed).
 23.1    Consent of Arthur Andersen L.L.P.
</TABLE>

                                       50
<PAGE>

                                  SIGNATURES

   Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized on August 6, 2001.

                                          Radio One, Inc.

                                          By: /s/ Scott R. Royster____________
                                          Name: Scott R. Royster
                                          Title:  Executive Vice President,
                                                  Chief Financial Officer and
                                                  Principal Accounting Officer

   Pursuant to the requirements of the Securities Act of 1934, this amendment
has been signed below by the following persons on behalf of the registrant in
the capacities indicated on August 6, 2001.

                                          By: /s/ Catherine L. Hughes_________
                                          Name: Catherine L. Hughes
                                          Title: Chairperson, Director and
                                           Secretary

                                          By: /s/ Alfred C. Liggins, III______
                                          Name: Alfred C. Liggins, III
                                          Title:  Chief Executive Officer,
                                                  President and Director

                                          By: /s/ Terry L. Jones______________
                                          Name: Terry L. Jones
                                          Title: Director

                                          By: /s/ Brian W. McNeill____________
                                          Name: Brian W. McNeill
                                          Title: Director

                                          By: /s/ Larry D. Marcus_____________
                                          Name: Larry D. Marcus
                                          Title: Director

                                          By: /s/ L. Ross Love________________
                                          Name: L. Ross Love
                                          Title: Director

                                          By: /s/ D. Geoffrey Armstrong_______
                                          Name: D. Geoffrey Armstrong
                                          Title: Director

                                      51
<PAGE>

                   Report of Independent Public Accountants

To the Board of Directors and Stockholders of Radio One, Inc.:

   We have audited the accompanying consolidated balance sheets of Radio One,
Inc. (a Delaware corporation) and subsidiaries (the Company) as of December
31, 1999 and 2000, and the related consolidated statements of operations,
changes in stockholders' equity and cash flows for each of the years in the
three years ended December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

   In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Radio One,
Inc. and subsidiaries as of December 31, 1999 and 2000, and the results of
their operations and their cash flows for each of the years in the three years
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States.

Baltimore, Maryland February 7, 2001

                                      F-1
<PAGE>

                        RADIO ONE, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                      As of December 31,
                                                  ----------------------------
                                                      1999           2000
                                                  ------------  --------------
<S>                                               <C>           <C>
                     ASSETS
CURRENT ASSETS:
 Cash and cash equivalents....................... $  6,221,000  $   20,879,000
 Investments, available for sale.................  256,390,000             --
 Trade accounts receivable, net of allowance for
  doubtful accounts of $2,429,000 and $5,506,000,
  respectively...................................   19,833,000      46,883,000
 Prepaid expenses and other......................    1,035,000       6,557,000
 Income tax receivable...........................          --        2,476,000
 Deferred tax asset..............................      984,000       2,187,000
                                                  ------------  --------------
    Total current assets.........................  284,463,000      78,982,000
PROPERTY AND EQUIPMENT, net......................   15,512,000      33,376,000
INTANGIBLE ASSETS, net...........................  218,460,000   1,637,180,000
OTHER ASSETS.....................................    9,101,000      15,680,000
                                                  ------------  --------------
    Total assets................................. $527,536,000  $1,765,218,000
                                                  ============  ==============
      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable................................ $  1,663,000  $   17,683,000
 Accrued expenses................................    6,941,000      14,127,000
 Income taxes payable............................    1,532,000             --
 Other current liabilities.......................          --        4,696,000
                                                  ------------  --------------
    Total current liabilities....................   10,136,000      36,506,000
LONG-TERM DEBT AND DEFERRED INTEREST, net of
 current portion.................................   82,626,000     646,956,000
DEFERRED INCOME TAX LIABILITY....................   14,518,000      24,687,000
                                                  ------------  --------------
    Total liabilities............................  107,280,000     708,149,000
                                                  ------------  --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
 Convertible preferred stock, $.001 par value,
  1,000,000 shares authorized and 310,000 shares
  issued and outstanding; liquidation preference
  of $1,000 per share, plus cumulative dividends
  at 6.5% per year, which were $9,236,0000 as of
  December 31, 2000..............................          --              --
 Common stock--Class A, $.001 par value,
  30,000,000 shares authorized, 17,221,000 and
  22,789,000 shares issued and outstanding.......       17,000          23,000
 Common stock--Class B, $.001 par value,
  30,000,000 shares authorized, 2,867,000 shares
  issued and outstanding.........................        3,000           3,000
 Common stock--Class C, $.001 par value,
  30,000,000 shares authorized, 3,184,000 and
  3,132,000 shares issued and outstanding........        3,000           3,000
 Common stock--Class D, $.001 par value,
  150,000,000 shares authorized, 46,546,000 and
  58,246,000 shares issued and outstanding.......       46,000          58,000
 Accumulated comprehensive income adjustments....       40,000             --
 Stock subscriptions receivable..................          --       (9,005,000)
 Additional paid-in capital......................  446,354,000   1,105,681,000
 Accumulated deficit.............................  (26,207,000)    (39,694,000)
                                                  ------------  --------------
    Total stockholders' equity...................  420,256,000   1,057,069,000
                                                  ------------  --------------
    Total liabilities and stockholders' equity... $527,536,000  $1,765,218,000
                                                  ============  ==============
</TABLE>

   The accompanying notes are an integral part of these consolidated balance
                                    sheets.

                                      F-2
<PAGE>

                        RADIO ONE, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                          For the Years Ended December 31,
                                        --------------------------------------
                                           1998         1999          2000
                                        -----------  -----------  ------------
<S>                                     <C>          <C>          <C>
REVENUE:
 Broadcast revenue, including barter
  revenue of $644,000, $1,821,000 and
  $2,690,000, respectively............. $52,696,000  $93,260,000  $177,219,000
 Less: Agency commissions..............   6,587,000   11,557,000    21,553,000
                                        -----------  -----------  ------------
   Net broadcast revenue...............  46,109,000   81,703,000   155,666,000
                                        -----------  -----------  ------------
OPERATING EXPENSES:
 Program and technical, exclusive of
  depreciation and amortization shown
  separately below.....................   8,015,000   13,576,000    23,971,000
 Selling, general and administrative...  16,486,000   30,683,000    53,309,000
 Corporate expenses....................   2,800,000    4,155,000     6,303,000
 Stock-based compensation..............         --       225,000           --
 Depreciation and amortization.........   8,445,000   17,073,000    63,207,000
                                        -----------  -----------  ------------
    Total operating expenses...........  35,746,000   65,712,000   146,790,000
                                        -----------  -----------  ------------
    Operating income...................  10,363,000   15,991,000     8,876,000
INTEREST EXPENSE, including
 amortization of deferred financing
 costs.................................  11,455,000   15,279,000    32,407,000
OTHER INCOME, net......................     358,000    2,149,000    20,084,000
                                        -----------  -----------  ------------
    (Loss) income before (benefit)
     provision for income taxes........    (734,000)   2,861,000    (3,447,000)
(BENEFIT) PROVISION FOR INCOME TAXES...  (1,575,000)   2,728,000       804,000
                                        -----------  -----------  ------------
    Net income (loss).................. $   841,000  $   133,000  $ (4,251,000)
                                        ===========  ===========  ============
NET LOSS APPLICABLE TO COMMON
 STOCKHOLDERS.......................... $(2,875,000) $(1,343,000) $(13,487,000)
                                        ===========  ===========  ============
BASIC AND DILUTED LOSS PER COMMON
 SHARE:
 Net loss.............................. $      (.31) $      (.08) $       (.16)
                                        ===========  ===========  ============
WEIGHTED AVERAGE SHARES OUTSTANDING:
 Basic and diluted.....................   9,392,000   48,411,000    84,540,000
                                        ===========  ===========  ============
</TABLE>


 The accompanying notes are an integral part of these consolidated statements.

                                      F-3
<PAGE>

                        RADIO ONE, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                            Common Common                                    Accumulated
                    Common  Stock  Stock  Common  Convertible               Comprehensive     Stock       Additional
                     Stock  Class  Class   Stock   Preferred  Comprehensive    Income     Subscriptions    Paid-In
                    Class A   B      C    Class D    Stock       Income      Adjustments   Receivables     Capital
                    ------- ------ ------ ------- ----------- ------------- ------------- ------------- --------------
 <S>                <C>     <C>    <C>    <C>     <C>         <C>           <C>           <C>           <C>
 BALANCE, as of
  December 31,
  1997...........   $   --  $2,000 $3,000 $10,000    $--                      $    --      $       --   $      (10,000)
 Net income......       --     --     --      --      --                           --              --              --
 Preferred stock
  dividends......       --     --     --      --      --                           --              --              --
                    ------- ------ ------ -------    ----                     --------     -----------  --------------
 BALANCE, as of
  December 31,
  1998...........       --   2,000  3,000  10,000     --                           --              --          (10,000)
 Comprehensive
  income:
 Net income......       --     --     --      --      --       $   133,000         --              --              --
 Unrealized gain
  on securities..       --     --     --      --      --            40,000      40,000             --              --
                                                               -----------
 Comprehensive
  income.........                                              $   173,000
                                                               ===========
 Preferred stock
  dividends......       --     --     --      --      --                           --              --              --
 Issuance of
  stock for
  acquisition....     2,000  1,000    --    6,000     --                           --              --       34,185,000
 Stock issued to
  an officer.....       --     --     --      --      --                           --              --          225,000
 Conversion of
  warrants.......     5,000    --     --   10,000     --                           --              --          (15,000)
 Issuance of
  common stock...    10,000    --     --   20,000     --                           --              --      411,969,000
                    ------- ------ ------ -------    ----                     --------     -----------  --------------
 BALANCE, as of
  December 31,
  1999...........    17,000  3,000  3,000  46,000     --                        40,000             --      446,354,000
 Comprehensive
  income:
 Net loss........       --     --     --      --      --       $(4,251,000)        --              --              --
 Unrealized loss
  on securities..       --     --     --      --      --           (40,000)    (40,000)            --              --
                                                               -----------
 Comprehensive
  income.........                                              $(4,291,000)
                                                               ===========
 Preferred stock
  dividends......       --     --     --      --      --                           --              --              --
 Issuance of
  stock for
  acquisition....     1,000    --     --    1,000     --                           --              --       13,543,000
 Stock sold to
  officers.......       --     --     --    1,000     --                           --       (9,005,000)      9,004,000
 Issuance of
  common stock...     5,000    --     --   10,000     --                           --              --      335,967,000
 Employee
  exercise of
  options........       --     --     --      --      --                           --              --          878,000
 Issuance of
  preferred
  stock..........       --     --     --      --      --                           --              --      299,935,000
                    ------- ------ ------ -------    ----                     --------     -----------  --------------
 BALANCE, as of
  December 31,
  2000...........   $23,000 $3,000 $3,000 $58,000    $--                      $    --      $(9,005,000) $1,105,681,000
                    ======= ====== ====== =======    ====                     ========     ===========  ==============
<CAPTION>
                                      Total
                    Accumulated   Stockholders'
                      Deficit         Equity
                    ------------- ---------------
 <S>                <C>           <C>
 BALANCE, as of
  December 31,
  1997...........   $(21,989,000) $  (21,984,000)
 Net income......        841,000         841,000
 Preferred stock
  dividends......     (3,716,000)     (3,716,000)
                    ------------- ---------------
 BALANCE, as of
  December 31,
  1998...........    (24,864,000)    (24,859,000)
 Comprehensive
  income:
 Net income......        133,000         133,000
 Unrealized gain
  on securities..            --           40,000
 Comprehensive
  income.........
 Preferred stock
  dividends......     (1,476,000)     (1,476,000)
 Issuance of
  stock for
  acquisition....            --       34,194,000
 Stock issued to
  an officer.....            --          225,000
 Conversion of
  warrants.......            --              --
 Issuance of
  common stock...            --      411,999,000
                    ------------- ---------------
 BALANCE, as of
  December 31,
  1999...........    (26,207,000)    420,256,000
 Comprehensive
  income:
 Net loss........     (4,251,000)     (4,251,000)
 Unrealized loss
  on securities..            --          (40,000)
 Comprehensive
  income.........
 Preferred stock
  dividends......     (9,236,000)     (9,236,000)
 Issuance of
  stock for
  acquisition....            --       13,545,000
 Stock sold to
  officers.......            --              --
 Issuance of
  common stock...            --      335,982,000
 Employee
  exercise of
  options........            --          878,000
 Issuance of
  preferred
  stock..........            --      299,935,000
                    ------------- ---------------
 BALANCE, as of
  December 31,
  2000...........   $(39,694,000) $1,057,069,000
                    ============= ===============
</TABLE>

 The accompanying notes are an integral part of these consolidated statements.

                                      F-4
<PAGE>

                        RADIO ONE, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                        For the Years Ended December 31,
                                   --------------------------------------------
                                       1998          1999            2000
                                   ------------  -------------  ---------------
<S>                                <C>           <C>            <C>
CASH FLOWS FROM OPERATING
 ACTIVITIES:
 Net income (loss)...............  $    841,000  $     133,000  $    (4,251,000)
 Adjustments to reconcile net
  income (loss) to net cash from
  operating activities:
 Depreciation and amortization...     8,445,000     17,073,000       63,207,000
 Amortization of debt financing
  costs, unamortized discount
  and deferred interest..........     4,110,000      4,597,000        2,839,000
 Deferred income taxes and
  reduction in valuation reserve
  on deferred income taxes.......    (2,038,000)    (1,043,000)       8,966,000
 Non-cash compensation to
  officer........................           --         225,000              --
 Non-cash advertising revenue in
  exchange for equity
  investments....................           --        (448,000)        (683,000)
 Effect of change in operating
  assets and liabilities-
  Trade accounts receivable,
   net...........................    (1,933,000)    (5,419,000)     (25,511,000)
  Prepaid expenses and other.....        (4,000)      (593,000)       2,586,000
  Other assets...................    (1,391,000)      (627,000)        (281,000)
  Accounts payable...............       830,000        369,000       11,588,000
  Accrued expenses and other.....       439,000      3,954,000       (2,774,000)
                                   ------------  -------------  ---------------
   Net cash flows from operating
    activities...................     9,299,000     18,221,000       55,686,000
                                   ------------  -------------  ---------------
CASH FLOWS FROM INVESTING
 ACTIVITIES:
 Purchase of property and
  equipment......................    (2,236,000)    (3,252,000)      (3,665,000)
 Purchase of intangible asset....           --             --        (2,000,000)
 Proceeds from disposal of
  property and equipment.........       150,000            --               --
 Equity investments..............           --      (1,275,000)      (1,185,000)
 (Purchase) proceeds from sale of
  available for sale
  investments....................           --    (256,321,000)     256,430,000
 Deposits and payments for
  station purchases..............   (59,085,000)   (85,723,000)  (1,469,603,000)
                                   ------------  -------------  ---------------
   Net cash flows from investing
    activities...................   (61,171,000)  (346,571,000)  (1,220,023,000)
                                   ------------  -------------  ---------------
CASH FLOWS FROM FINANCING
 ACTIVITIES:
 Repayment of debt...............  $   (485,000) $(128,804,000) $    (7,599,000)
 Proceeds from debt issuances....    49,350,000     75,650,000      570,000,000
 Deferred financing costs........    (1,038,000)      (569,000)      (6,158,000)
 Repayment of senior cumulative
  redeemable preferred stock.....           --     (28,160,000)             --
 Proceeds from issuance of common
  stock, net of issuance costs...           --     411,999,000      335,982,000
 Proceeds from issuance of
  preferred stock, net of
  issuance costs.................           --             --       299,935,000
 Payment of preferred stock
  dividends......................           --             --        (5,038,000)
 Loans to officers...............           --             --        (9,005,000)
 Proceeds from exercise of stock
  options........................           --             --           878,000
                                   ------------  -------------  ---------------
   Net cash flows from financing
    activities...................    47,827,000    330,116,000    1,178,995,000
                                   ------------  -------------  ---------------
(DECREASE) INCREASE IN CASH AND
 CASH EQUIVALENTS................    (4,045,000)     1,766,000       14,658,000
CASH AND CASH EQUIVALENTS,
 beginning of year...............     8,500,000      4,455,000        6,221,000
                                   ------------  -------------  ---------------
CASH AND CASH EQUIVALENTS, end of
 year............................  $  4,455,000  $   6,221,000  $    20,879,000
                                   ============  =============  ===============
SUPPLEMENTAL DISCLOSURE OF CASH
 FLOW INFORMATION:
 Cash paid for-
  Interest.......................  $  7,192,000  $  10,762,000  $    28,581,000
                                   ============  =============  ===============
  Income taxes...................  $    338,000  $   2,252,000  $     5,938,000
                                   ============  =============  ===============
</TABLE>

 The accompanying notes are an integral part of these consolidated statements.

                                      F-5
<PAGE>

                        RADIO ONE, INC. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       December 31, 1998, 1999 and 2000

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

 Organization and Business

   Radio One, Inc. (a Delaware corporation referred to as Radio One) and
subsidiaries (collectively referred to as the Company) were organized to
acquire, operate and maintain radio broadcasting stations. The Company owns
and/or operates radio stations in the Washington, D.C.; Baltimore, Maryland;
Philadelphia, Pennsylvania; Detroit and Kingsley, Michigan; Atlanta and
Augusta, Georgia; Cleveland, Ohio; St. Louis, Missouri; Richmond, Virginia;
Boston, Massachusetts, Charlotte and Raleigh, North Carolina; Greenville,
South Carolina; Indianapolis, Indiana; Houston and Dallas, Texas; Miami,
Florida; and Los Angeles, California markets.

   The Company has been making and may continue to make significant
acquisitions of radio stations, which may require it to incur new debt. The
service of this debt could require the Company to make significant debt
service payments. The Company's operating results are significantly affected
by its share of the audience in markets where it has stations.

 Basis of Presentation

   The accompanying consolidated financial statements include the accounts of
Radio One, Inc. and its wholly owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in consolidation.
The accompanying consolidated financial statements are presented on the
accrual basis of accounting in accordance with accounting principles generally
accepted in the United States. The preparation of financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities as of the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates. The significant estimates in these
accompanying financial statements are the estimated useful lives on fixed and
intangible assets and the reserve for uncollectible receivables.

 Issuance of Stock

   The Company effected an initial public offering (IPO) of common stock
during May 1999, in which it sold approximately 5.4 million shares of Class A
common stock. The Company completed additional offerings of common stock
during November 1999 and March 2000, in which it sold approximately 5.2
million and 5.0 million shares of Class A common stock, respectively. The
Company received net proceeds of approximately $748.0 million from these
offerings, after deducting offerings costs, and used a portion of the proceeds
to repay debt, redeem preferred stock, fund acquisitions and for other general
corporate purposes.

   In July 2000, the Company completed a private placement of $310.0 million
of 6 1/2% Convertible Preferred Securities, at $1,000 per security, with a par
value of $.001 per share. Each of these preferred securities is convertible to
53.3832 shares of Class D common stock. Issuance costs were approximately
$10.1 million, including underwriting commissions.

 Stock Split and Conversion

   On May 22, 2000, the Company's Board of Directors declared a three-for-one
stock split of Class A Common Stock in the form of a stock dividend of Class D
common stock payable to shareholders of record as of May 30, 2000. All per
share data in the accompanying consolidated financial statements and notes
thereto have been restated to reflect this stock dividend.


                                      F-6
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000

   The Company effected a 34,061-for-one stock split, effective May 6, 1999,
in conjunction with its IPO. All share data included in the accompanying
consolidated financial statements and notes thereto have been restated to
reflect the stock split.

   Effective February 25, 1999, the Company converted certain Class A common
stock held by the principal stockholders to Class B common stock which has ten
votes per share, as compared to Class A common stock which has one vote per
share, and certain of their Class A common stock to Class C common stock.
Class C and D common stock have no voting rights except as required by
Delaware law. All share data included in the accompanying consolidated
financial statements and notes thereto have been restated to reflect the stock
conversion.

 Cash and Cash Equivalents

   Cash and cash equivalents consist of cash and money market accounts at
various commercial banks. All cash equivalents have original maturities of 90
days or less. For cash and cash equivalents, cost approximates market value.

 Investments

   Investments as of December 31, 1999, consist of U.S. government, tax-exempt
municipal and commercial securities that mature within eighteen months.
Investments are classified as available for sale and are recorded at market
value. The change in market value is recorded as a component of other
comprehensive income in stockholders' equity.

 Other Assets

   As of December 31, 2000, the Company had invested $3.3 million in Net Noir,
Inc., an internet portal service provider. The investment consisted of
$250,000 in cash and $3.0 million in advertising on the Company's radio
stations in exchange for an equity investment. The advertising provided by the
Company is valued based on the valuation of the internet portal service using
what other investors have paid for equity of internet portal service. This
basis for the value of the advertising is not more than the Company's normal
rates for this advertising.

   During 2000, the Company invested approximately $500,000 in cash and $2.0
million in advertising on the Company's radio stations in exchange for an
equity investment in New Urban Entertainment Television, Inc. The advertising
provided by the Company is valued based on the valuation of that company,
using what other investors have paid for equity in that company. This basis
for the value of advertising is not more than the Company's normal rates for
this advertising.

   During 2000, the Company made a $1.0 million subscriber commitment in
exchange for a limited partnership interest in Quetzal/Chase Communications
Partners, L.P. The Company funded approximately $525,000 in cash of that
commitment during the year.

   As of December 31, 2000, the Company had an investment of approximately
$214,000 in Ibiquity (formerly USA Digital Radio, Inc.).

   During 1999, the Company made a $1.0 million investment in PNE Media
Holdings, LLC., a privately-held outdoor advertising company.


                                      F-7
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000

   The Company accounts for equity investments of less than 20% of a Company
at market value. The Company reviews the carrying values of its investments in
privately held companies whenever events indicate that an impairment may have
occurred or at least annually. In the opinion of management, the investments
as of December 31, 2000 and 1999, are stated at their estimated fair market
value.

 Financial Instruments

   Financial instruments as of December 31, 1999 and 2000, consist of cash and
cash equivalents, investments, trade accounts receivable, notes receivable
(which are included in other current assets), accounts payable, accrued
expenses, long-term debt and subscriptions receivable, all of which the
carrying amounts approximate fair value except for the Senior Subordinated
Notes as of December 31, 1999 and 2000, which have a fair value of
approximately $87.7 million and $84.0 million, respectively, as compared to a
carrying value of $82.5 million and $84.4 million, respectively.

 Derivative Financial Instruments

   During 2000, the Company entered into swap agreements to reduce exposure to
interest rate fluctuations on certain debt commitments (see Note 4). Costs
incurred to execute the swap agreements are deferred and amortized over the
term of the swap agreements. The amounts incurred by the Company, representing
the effective difference between the fixed rate under the swap agreements and
the variable rate on the underlying term of the debt, are included in interest
expense in the accompanying consolidated statements of operations. In the
event of early termination of these swap agreements, any gains or losses would
be amortized over the respective lives of the underlying debt or recognized
currently if the debt is terminated earlier than initially anticipated.

 Revenue Recognition

   In accordance with industry practice, revenue for broadcast advertising is
recognized when the commercial is broadcast.

 Barter Arrangements

   The Company broadcasts certain customers' advertising in exchange for
equipment, merchandise and services. The estimated fair value of the
equipment, merchandise or services received is recorded as deferred barter
costs and the corresponding obligation to broadcast advertising is recorded as
deferred barter revenue. The deferred barter costs are expensed or capitalized
as they are used, consumed or received. Deferred barter revenue is recognized
as the related advertising is aired.

 Comprehensive Income

   The Company reports comprehensive income on the statement of changes in
stockholders' equity. Comprehensive income is defined as the change in equity
of a business enterprise during a period from transactions and other events
and circumstances from nonowner sources.

 Segment Reporting

   The Company believes it has only one segment, radio broadcasting. The
Company came to this conclusion because the Company has one product or
service, has the same type of customer and operating strategy in each market,
operates in one regulatory environment, has only one management group that
manages the entire

                                      F-8
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000

Company and provides information on the Company's results as one segment to
the key decision-makers. All of the Company's revenue is derived from stations
located in the United States.

 Earnings Available for Common Stockholders

   In July 2000, the Company completed a private placement of $310.0 million
of 6.5% Convertible Preferred Securities (the Securities), at $1,000 per
security. Dividends accrue on the Securities at 6.5% per annum from the date
of original issuance. Dividends are paid quarterly in arrears, commencing
October 15, 2000. The earnings available for common stockholders for the year
ended December 31, 2000, is the net loss less the dividends of $9,236,000
accrued during 2000 on the Securities.

   Additionally, the Company had certain senior cumulative redeemable
preferred stock outstanding during 1998 and 1999 which paid dividends at 15%
per annum (see Note 4) and was retired during 1999. The Company accreted
dividends on this preferred stock, which was paid when the preferred stock was
redeemed. The earnings available for common stockholders for the years ended
December 31, 1998 and 1999, is the net loss or income for the year, less the
accreted dividend of $3,716,000 and $1,476,000 during 1998 and 1999,
respectively, on the preferred stock.

 Earnings Per Share

   Earnings per share are based on the weighted average number of common and
diluted common equivalent shares for stock options and warrants outstanding
during the period the calculation is made, divided into the earnings available
for common stockholders. Diluted common equivalent shares consist of shares
issuable upon the exercise of stock options and warrants, using the treasury
stock method. All warrants outstanding to acquire common stock as of December
31, 1998, which were exercised concurrent with the closing of the IPO and the
stock issued to an employee in January 1999 have been reflected in the
calculation of earnings per share as if the stock issued was outstanding for
all periods presented. As of December 31, 2000, there were approximately
1,268,000 stock options outstanding from options granted since May 1999 (see
Note 6), however, the common stock equivalents of these options are not
included in the diluted earnings per share as the stock options are
antidilutive. The weighted average shares outstanding is calculated as
follows:

<TABLE>
<CAPTION>
                                                        December 31,
                                               -------------------------------
                                                 1998       1999       2000
                                               --------- ---------- ----------
<S>                                            <C>       <C>        <C>
Common stock outstanding...................... 4,716,000 16,137,000 84,540,000
Common stock issued from exercise of
 warrants..................................... 4,625,000        --         --
Stock issued subsequent to year-end...........    51,000        --         --
                                               --------- ---------- ----------
Weighted average shares outstanding for both
 basis and diluted earnings per share......... 9,392,000 16,137,000 84,540,000
                                               ========= ========== ==========
</TABLE>

Recent Accounting Pronouncements

   The Company will adopt Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133),
as amended by SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities--Deferral of the Effective Date of FASB Statement No. 133" and SFAS
138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities" on January 1, 2001. This standard requires the Company to
recognize all derivatives, as defined in the Statement, on the balance sheet
at fair value. Derivatives, or any portion thereof, that are not effective
hedges must be adjusted to

                                      F-9
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000

fair value through income. If derivatives are effective hedges, depending on
the nature of the hedges, changes in the fair value of derivatives either will
offset the change in fair value of the hedged assets, liabilities or firm
commitments through earnings, or will be recognized in other comprehensive
income until the hedged items are recognized in earnings. The Company
estimates that the transition adjustment to implement this new standard will
be an adjustment of approximately $3.9 million to other comprehensive income,
a component of stockholders' equity. This transition adjustment, which related
to hedges of interest rate, will be recognized as of January 1, 2001, as a
cumulative effect of a change in accounting principle.

   Staff Accounting Bulletin No. 101--"Revenue Recognition in Financial
Statements", was introduced in 2000. This bulletin provides views on applying
generally accepted accounting principles to selected revenue recognition
issues. The views in this bulletin have not significantly affected the
Company's revenue recognition policy.

 Reclassifications

   Certain reclassifications have been made to 1999 to conform to the 2000
presentation.

2. ACQUISITIONS:

   On November 15, 2000, the Company completed the acquisition of WPEK-FM
licensed to Seneca, South Carolina, for approximately $7.5 million. The
acquisition resulted in recording approximately $7.5 million of intangible
assets.

   On September 25, 2000, the Company completed the acquisition of KJOI-AM
(formerly KLUV-AM) licensed to Dallas, Texas, for approximately $16.0 million.
The acquisition resulted in recording approximately $15.3 million of
intangible assets.

   On August 25, 2000, the Company completed the acquisition of twelve radio
stations (KMJQ-FM and KBXX-FM licensed to Houston, Texas, WVCG-AM, licensed to
Coral Gables, Florida, WZAK-FM, licensed to Cleveland, Ohio, WJMO-AM, licensed
to Cleveland Heights, Ohio, KKBT-FM, licensed to Los Angeles, California,
KBFB-FM, licensed to Dallas, Texas, WJMZ-FM, licensed to Anderson, South
Carolina, WFXK-FM, licensed to Tarboro, North Carolina, WFXC-FM, licensed to
Durham, North Carolina, WNNL-FM, licensed to Fuquay-Varina, North Carolina and
WQOK-FM, licensed to South Boston, Virginia) from Clear Channel
Communications, Inc. and AMFM, Inc. for approximately $1.3 billion in cash.
The acquisition resulted in the recording of approximately $1.3 billion of
intangible assets. In connection with this acquisition, the Company is
obtaining an appraisal of all assets acquired. The Company has estimated the
value of the assets acquired in this acquisition; however, this allocation is
subject to modification when the appraisals are complete.

   On June 8, 2000, the Company completed the acquisitions of WHHH-FM,
licensed to Indianapolis, Indiana; WTLC-FM (formerly WBKS-FM), licensed to
Greenwood, Indiana; WYJZ-FM, licensed to Lebanon, Indiana; and W53AV, a low-
powered television station licensed to Indianapolis, Indiana, for
approximately $30.0 million in cash and 441,000 shares of Class A common stock
valued at approximately $10.0 million. The acquisitions resulted in the
recording of approximately $49.1 million of intangible assets, which includes
the recording of a deferred tax liability of $10.2 million for the difference
in book and tax basis in the assets acquired from the purchase price being in
excess of the net book value of the company.

   On June 7, 2000, the Company completed the acquisition of Davis
Broadcasting, Inc., which owns and operates radio stations WTHB-AM and WFXA-
FM, licensed to Augusta, Georgia; WAEG-FM, licensed to

                                     F-10
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000

Evans, Georgia; WAKB-FM, licensed to Wrens, Georgia; WAEJ-FM, licensed to
Waynesboro, Georgia; and WCCJ-FM, licensed to Harrisburg, North Carolina, for
approximately $20.7 million in cash, 57,000 shares of Class A common stock and
115,000 shares of Class D common stock valued at approximately $3.5 million.
The acquisition resulted in the recording of approximately $23.9 million of
intangible assets.

   On February 28, 2000, the Company acquired WPLY-FM, located in the
Philadelphia, Pennsylvania, area, for approximately $80.0 million. The
acquisition resulted in the recording of approximately $78.7 million of
intangible assets.

   On October 1, 1999, the Company acquired the assets of WBOT-FM (formerly
WCAV-FM), located in the Boston, Massachusetts, metropolitan area for
approximately $10.0 million. The acquisition of WBOT-FM resulted in the
recording of approximately $10.0 million of intangible assets.

   On July 15, 1999, the Company acquired WDYL-FM in Richmond, Virginia, for
approximately $4.6 million. The acquisition resulted in the recording of
approximately $4.6 million of intangible assets.

   On July 1, 1999, the Company acquired WKJS-FM and WARV-FM (formerly WSOJ-
FM) in Richmond, Virginia, for approximately $12.0 million, subject to certain
purchase price adjustments. During 2000, the Company paid an additional $4.0
million related to the purchase price adjustments. The acquisition resulted in
the recording of approximately $15.0 million of intangible assets.

   On June 4, 1999, the Company acquired the assets of WFUN-FM in St. Louis,
Missouri, for approximately $13.6 million. The acquisition resulted in the
recording of approximately $13.2 million of intangible assets.

   On May 6, 1999, the Company entered into an asset purchase agreement to
acquire WCDX-FM, WJRV-FM, WPLZ-FM and WCGV-AM in Richmond, Virginia, for
approximately $34.0 million. Radio One made a deposit of approximately
$1,250,000 towards the purchase price that is included in other assets in the
accompanying consolidated balance sheet as of December 31, 2000. The Company
operates the three FM stations under a Time Brokerage Agreement (TBA) and paid
approximately $1.6 million and $2.8 million in TBA fees for the years ended
December 31, 1999 and 2000, respectively, that are included in interest
expense in the accompanying consolidated statement of operations for the years
ended December 31, 1999 and 2000.

   On April 30, 1999, the Company acquired the assets of WENZ-FM and WERE-AM
in Cleveland, Ohio, for approximately $20.0 million. The acquisition resulted
in the recording of approximately $15.4 million of intangible assets.

   On March 30, 1999, the Company acquired all of the outstanding stock of
Radio One of Atlanta, Inc. (ROA), an affiliate of the Company and owner and
operator of WHTA-FM in Atlanta, Georgia, for approximately 3,277,000 shares of
the Company's common stock. At the time of the ROA acquisition, ROA owned
approximately 33% of Dogwood Communications, Inc. (Dogwood), owner and
operator of WAMJ-FM in Atlanta, Georgia. On March 30, 1999, ROA acquired the
remaining approximate 67% of Dogwood for $3.6 million. The acquisition was
accounted for using purchase accounting, with the portion of the excess
purchase price over the net book value of the assets acquired related to the
non-controlling stockholders being stepped up and that portion of the excess
purchase price being recorded as goodwill. The remaining net book value of the
assets acquired was recorded at historical cost. The acquisitions resulted in
the recording of approximately $49.6 million of intangible assets.

   On December 28, 1998, Radio One purchased all of the outstanding stock of
Allur-Detroit, Inc. (Allur), which owned one radio station in Detroit,
Michigan, for approximately $26.5 million. The acquisition of Allur

                                     F-11
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000

resulted in the recording of approximately $31.7 million of intangible assets,
which includes the recording of a deferred tax liability of approximately $6.1
million for the difference in book and tax basis in the assets acquired from
the Allur purchase price being in excess of the net book value of Allur.

   On June 30, 1998, Radio One purchased all of the outstanding stock of Bell
Broadcasting Company (Bell), which owned three radio stations in Michigan, for
approximately $34.2 million. The acquisition of Bell resulted in the recording
of approximately $42.5 million of intangible assets, which includes the
recording of a deferred tax liability of approximately $9.4 million for the
difference in book and tax basis in the assets acquired from the Bell purchase
price being in excess of the net book value of Bell.

   On March 16, 1998, WYCB Acquisition Corporation, a restricted subsidiary of
Radio One, acquired all the stock of Broadcast Holdings, Inc., the owner of
one radio station in Washington, D.C., for approximately $3.8 million. The
acquisition of WYCB resulted in the recording of approximately $5.2 million of
intangible assets, which includes the recording of a deferred tax liability of
approximately $1.4 million for the difference in book and tax basis in the
assets acquired from the WYCB purchase price being in excess of the net book
value of WYCB.

   The unaudited pro forma summary consolidated results of operations for the
years ended December 31, 1999 and 2000, assuming that all acquisitions
previously discussed which were completed during the years ended December 31,
1999 or 2000, had occurred as of January 1, 1999, are as follows:

<TABLE>
<CAPTION>
                                                       1999          2000
                                                   ------------  ------------
   <S>                                             <C>           <C>
   Net broadcast revenue.......................... $201,092,000  $226,193,000
   Operating expenses, excluding depreciation and
    amortization..................................  108,884,000   114,868,000
   Depreciation and amortization..................  116,670,000   122,925,000
   Interest expense...............................   60,083,000    64,825,000
   Other income, net..............................      148,000       642,000
   (Benefit) provision for income taxes...........          --            --
                                                   ------------  ------------
     Net loss..................................... $(84,397,000) $(75,783,000)
                                                   ============  ============
   Net loss applicable to common stock............ $(85,873,000) $(85,019,000)
                                                   ============  ============
   Basic and diluted loss per common share........ $      (1.77) $      (1.01)
                                                   ============  ============
</TABLE>

                                     F-12
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000


3. FIXED AND INTANGIBLE ASSETS:

   Property and equipment are recorded at cost and are being depreciated on a
straight-line basis over various periods. The components of the Company's
property and equipment as of December 31, 1999 and 2000, are as follows:

<TABLE>
<CAPTION>
                                                                    Period of
                                             1999        2000     Depreciation
                                          ----------- ----------- -------------
   <S>                                    <C>         <C>         <C>
   PROPERTY AND EQUIPMENT:
    Land and improvements................ $ 2,838,000 $ 3,745,000           --
    Building and improvements............     434,000   1,089,000      31 years
    Transmitter towers...................   6,080,000  12,141,000 7 or 15 years
    Equipment............................   9,412,000  22,891,000  4 to 7 years
    Leasehold improvements...............   2,893,000   4,028,000 Life of Lease
    Construction-in-progress.............     839,000   1,385,000
                                          ----------- -----------
                                           22,496,000  45,279,000
    Less: Accumulated depreciation.......   6,984,000  11,903,000
                                          ----------- -----------
      Property and equipment, net........ $15,512,000 $33,376,000
                                          =========== ===========
</TABLE>

   Depreciation expense for the fiscal years ended December 31, 1998, 1999 and
2000, was $746,000, $2,395,000 and $4,919,000, respectively.

   Intangible assets are being amortized on a straight-line basis over various
periods. The intangible asset balances and periods of amortization as of
December 31, 1999 and 2000, are as follows:

<TABLE>
<CAPTION>
                                                                    Period of
                                           1999          2000      Amortization
                                       ------------ -------------- ------------
   <S>                                 <C>          <C>            <C>
   FCC broadcast license.............  $172,642,000 $1,612,920,000   7-15 Years
   Goodwill..........................    75,875,000     97,300,000     15 Years
   Debt financing....................     3,755,000      9,913,000 Life of Debt
   Favorable transmitter site and
    other intangibles................     1,924,000      9,118,000   6-17 Years
   Noncompete agreement..............     4,005,000      4,005,000      3 Years
                                       ------------ --------------
     Total...........................   258,201,000  1,733,256,000
     Less: Accumulated amortization..    39,741,000     96,076,000
                                       ------------ --------------
     Net intangible assets...........  $218,460,000 $1,637,180,000
                                       ============ ==============
</TABLE>

   Amortization expense for the fiscal years ended December 31, 1998, 1999 and
2000, was $7,243,000, $14,678,000 and $56,335,000, respectively. The
amortization of deferred financing costs was charged to interest expense.

   The Company continually monitors events and changes in circumstances which
could indicate that carrying amounts of intangible assets may not be
recoverable. When events or changes in circumstances are present that indicate
the carrying amount of intangible assets may not be recoverable, the Company
assesses the recoverability of intangible assets by determining whether the
carrying value of such intangible assets will be recovered through the future
cash flows expected from the use of the asset and its eventual disposition.

                                     F-13
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000


4. DEBT AND SENIOR SUBORDINATED NOTES:

   As of December 31, 1999 and 2000, the Company's outstanding debt is as
follows:

<TABLE>
<CAPTION>
                                                          1999         2000
                                                       ----------- ------------
   <S>                                                 <C>         <C>
   Senior subordinated notes (net of $2,951,000 and
    $1,110,000 unamortized discounts, respectively)... $82,526,000 $ 84,368,000
   Bank credit facility...............................         --   562,500,000
   Other notes payable................................      69,000        1,000
   Capital lease obligations..........................      31,000       87,000
                                                       ----------- ------------
     Total, noncurrent................................ $82,626,000 $646,956,000
                                                       =========== ============
</TABLE>

 Senior Subordinated Notes

   To finance an acquisition and to refinance certain other debt, Radio One
issued approximately $85.5 million of 12% Senior Subordinated Notes due 2004.
The notes were sold at a discount, with the net proceeds to Radio One of
approximately $72.8 million. The notes pay cash interest at 7% per annum
through May 15, 2000, and at 12% thereafter, with the difference between the
7% cash interest and the 12% interest being accrued through May 15, 2000, and
added to the principal balance. The principal balance is not due until
maturity. In connection with this debt offering, Radio One retired
approximately $45.6 million of debt outstanding under a bank credit agreement
with the proceeds from the offering.

   The 12% notes due 2004 are redeemable at any time and from time to time at
the option of the Company, in whole or in part, on or after May 15, 2001 at
the redemption prices set forth in the 12% notes due 2004, plus accrued and
unpaid interest to the date of redemption. Upon a Change of Control (as
defined in the indenture), the Company must commence an offer to repurchase
the 12% notes due 2004 at 101% of the Accreted Value thereof, plus accrued and
unpaid interest, if any, to the date of repurchase.

Bank Credit Facility

   The Amended and Restated Credit Agreement dated July 17, 2000, provides for
a new facility under which the Company can borrow up to $750.0 million from a
group of banking institutions. The new bank credit facility contains covenants
limiting the Company's ability to incur additional debt and additional liens,
make dividend and other payments with respect to the Company's equity
securities, make new investments and sell assets. This new facility also
requires compliance with financial tests based on financial position and
results of operations, including a leverage ratio, an interest coverage ratio
and a fixed charge coverage ratio, all of which could effectively limit the
Company's ability to borrow or otherwise raise funds in the credit and capital
markets.

   The bank credit facility consists of Term A Loans in an amount up to $350.0
million, Term B Loans in an amount up to $150.0 million and the revolving
credit loans in an amount up to $250.0 million, that may be borrowed on a
revolving basis. The Company has borrowed the full amount of the Term A and B
Loans and $62.5 million of the revolving credit loan. The interest rate on the
credit facility is LIBOR plus a spread based on the Company's leverage ratio,
as defined in the credit agreement. The credit facility requires quarterly
interest payments. As of December 31, 2000, $187.5 million remained available
(based on various covenant restrictions) to be drawn down from the Company's
$750.0 million bank credit facility.

   The Company's bank credit facility and the agreements governing the other
outstanding debt contain covenants that restrict, among other things, the
ability of the Company to incur additional debt, pay cash

                                     F-14
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000

dividends, purchase capital stock, make capital expenditures, make investment
or other restricted payments, swap or sell assets, engage in transactions with
related parties, secure non-senior debt with assets, or merge, consolidate or
sell all or substantially all of its assets. Certain assets have been pledged
as collateral for outstanding debt.

   Future minimum payments as of December 31, 2000, are as follows:

<TABLE>
<CAPTION>
                                                          Senior
                                                       Subordinated Bank Credit
                                                          Notes       Facility
                                                       ------------ ------------
      <S>                                              <C>          <C>
      2001............................................ $       --   $        --
      2002............................................         --            --
      2003............................................         --     52,500,000
      2004............................................  84,368,000    52,500,000
      2005............................................         --     70,000,000
      2006 and thereafter.............................         --    387,500,000
                                                       -----------  ------------
                                                       $84,368,000  $562,500,000
                                                       ===========  ============
</TABLE>

 Capital Lease Obligations

   The Company has capital leases in excess of one year terms for office
equipment. The terms of these leases require maximum monthly principal and
interest payments of $6,500 through July 2003. The imputed interest on these
leases range from 7.9% to 16.0%.

 Senior Cumulative Redeemable Preferred Stock

   On May 19, 1997, concurrent with the senior subordinated debt issuance, all
of the holders of Radio One Subordinated Promissory Notes converted all of
their existing subordinated notes consisting of approximately $17.0 million,
together with all accrued interest thereon of approximately $3.9 million and
outstanding warrants, for shares of Senior Cumulative Redeemable Preferred
Stock, which had to be redeemed by May 2005 and stock warrants to purchase
approximately 15,000,000 shares of common stock. The Senior Cumulative
Redeemable Preferred Stock could be redeemed at 100% of its liquidation value,
which is the principal and accreted dividends. The dividends on each share
accrued on a daily basis at a rate of 15% per annum. Preferred stock dividends
of approximately $3.7 million and $1.5 million were accrued during the years
ended December 31, 1998 and 1999, respectively. In May 1999, the Company
redeemed the outstanding preferred stock and accreted dividends with the
proceeds from the IPO.

5. COMMITMENTS AND CONTINGENCIES:

 Operating Leases

   Radio One has various operating leases for office space, studio space,
broadcast towers and transmitter facilities which expire on various dates
through December 31, 2011. One of these leases is for office and studio space
in Baltimore, Maryland, and is with a partnership in which two of the partners
are stockholders of the Company (see Note 8).

                                     F-15
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000


   The following is a schedule of the future minimum rental payments required
under the operating leases that have an initial or remaining noncancelable
lease term in excess of one year as of December 31, 2000.

<TABLE>
<CAPTION>
           For the Year
       Ending December 31,                                             Total
       -------------------                                           ----------
          <S>                                                        <C>
          2001...................................................... $4,082,000
          2002......................................................  3,559,000
          2003......................................................  3,032,000
          2004......................................................  2,360,000
          2005......................................................  2,237,000
          2006 and thereafter....................................... 11,006,000
</TABLE>

   Total rent expense for the years ended December 31, 1998, 1999 and 2000,
was $888,000, $1,492,000 and $3,776,000, respectively.

 FCC Broadcast Licenses

   Each of the Company's radio stations operates pursuant to one or more
licenses issued by the Federal Communications Commission (FCC) that have a
maximum term of eight years prior to renewal. The Company's radio operating
licenses expire at various times from October 1, 2003, to August 1, 2006.
Although the Company may apply to renew its FCC licenses, third parties may
challenge the Company's renewal applications. The Company is not aware of any
facts or circumstances that would prevent the Company from having its current
licenses renewed.

 Contingencies

   The Company has been named as a defendant in several legal actions
occurring in the ordinary course of business. It is management's opinion,
after consultation with its legal counsel, that the outcome of these claims
will not have a material adverse effect on the Company's financial position or
results of operations.

6. STOCKHOLDERS' EQUITY:

 Stock Options Plans

   During 1999, the Company adopted stock option plans under which employees
and nonemployee directors could be granted options to purchase shares of
Company common stock at the fair market value at the time of grant. Options
generally vest over a period of three to four years and expire 10 years from
the date of grant.

                                     F-16
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000


   Summarized information relative to the Company's stock option plans is as
follows:

<TABLE>
<CAPTION>
                                               Fiscal Year Ended December 31,
                                             -----------------------------------
                                                    2000              1999
                                             ------------------ ----------------
                                                       Weighted         Weighted
                                                       Average          Average
                                                       Exercise         Exercise
                                              Options   Price   Options  Price
                                             --------- -------- ------- --------
<S>                                          <C>       <C>      <C>     <C>
Balance, beginning of period................   621,000  $ 7.99      --   $ --
  Granted...................................   808,000   11.82  621,000   7.99
  Canceled..................................    43,000   10.51      --     --
  Exercised.................................   118,000   16.48      --     --
                                             ---------  ------  -------  -----
Balance, end of period...................... 1,268,000  $10.56  621,000  $7.99
                                             ---------  ------  -------  -----
Exercisable, end of period..................   169,013  $ 7.99   65,509  $7.99
                                             =========  ======  =======  =====
</TABLE>

   As of December 31, 2000, 2,838,886 shares were available for future grants
under the terms of these plans.

Stock Options Outstanding

   Summarized information relative to the Company's stock options outstanding
as of December 31, 2000 is as follows:

<TABLE>
<CAPTION>
                                                                   Options
                Options Outstanding                              Exercisable
---------------------------------------------------------     ----------------------
                                  Weighted
                                  Average        Weighted                 Weighted
                                 Remaining       Average                  Average
   Range of                     Contractual      Exercise                 Exercise
Exercise Price     Options      Life (Years)      Price       Options      Price
--------------     -------      ------------     --------     -------     --------
<S>               <C>           <C>              <C>          <C>         <C>
$ 7.50--$ 7.78      753,000         9.47          $ 7.58       56,842      $7.78
$ 8.11--$12.19      312,000         8.45            8.37      112,171       8.11
$22.51--$26.53      203,000         9.16           25.03          --         --
                  ---------                       ------      -------      -----
                  1,268,000                       $10.56      169,013      $7.99
                  =========                       ======      =======      =====
</TABLE>

Stock-Based Compensation

   The Company accounts for its stock-based compensation plans as permitted by
FASB Statement No. 123, "Accounting for Stock-Based Compensation," (SFAS No.
123) which allows the Company to follow Accounting Principles Board Opinion
No. 25 (APB No. 25), "Accounting for Stock Issued to Employees" and recognize
no compensation cost for options granted at fair market prices. The Company
has computed, for pro forma disclosure purposes, the value of all compensatory
options granted during 1999 and 2000, using the Black-Scholes option pricing
model. The following assumptions were used for grants:

<TABLE>
<CAPTION>
                                                                1999     2000
                                                               -------  -------
        <S>                                                    <C>      <C>
        Average risk-free interest rate.......................    4.65%    5.85%
        Expected dividend yield...............................    0.00%    0.00%
        Expected lives........................................ 3 years  3 years
        Expected volatility...................................      59%      42%
</TABLE>

                                     F-17
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000


   Options were assumed to be exercised upon vesting for the purpose of this
valuation. Adjustments were also made for options assumed forfeited prior to
vesting. Had compensation costs for compensatory options been determined
consistent with SFAS No. 123, the Company's pro forma net income and earnings
per share information reflected on the accompanying consolidated statements of
operations would have been reduced to the following "as adjusted" amounts:

<TABLE>
<CAPTION>
                                                          For the Year Ended
                                                             December 31,
                                                        -----------------------
                                                           1999        2000
                                                        ----------  -----------
   <S>                                                  <C>         <C>
   Net (loss) income:
     As reported....................................... $  133,000  $(4,251,000)
     As adjusted.......................................   (153,000)  (5,406,000)
   Basic earnings and diluted loss per share,
    applicable to common stockholders:
     As reported....................................... $    (0.08) $     (0.16)
     As adjusted.......................................      (0.10)       (0.17)
</TABLE>

   The Company's stock did not trade prior to May 1999.

   Weighted average fair value of options granted for the year ended December
31, 1999 and 2000, was $3.46 and $4.13, respectively. This fair value was
calculated using the Black-Scholes option pricing model.

7. INCOME TAXES:

   Deferred income taxes reflect the impact of temporary differences between
the assets and liabilities recognized for financial reporting purposes and
amounts recognized for tax purposes. Deferred taxes are based on tax laws as
currently enacted.

   During both 2000 and 1999, the Company acquired the stock of one company,
and during 1998, the Company acquired the stock of three companies. Associated
with these stock purchases, the Company allocated the purchase price to the
related assets acquired, with the excess purchase price allocated to goodwill.
Usually, in a stock purchase, for income tax purposes, the underlying assets
of the acquired companies retain their historical tax basis. Accordingly, the
Company recorded a deferred tax liability of approximately $11,415,000,
$10,222,000 and $16,863,000 in 2000, 1999 and 1998, respectively, related to
the difference between the book and tax basis for all of the assets acquired
(excluding nondeductible goodwill).

   A reconciliation of the statutory federal income taxes to the recorded
income tax (benefit) provision for the years ended December 31, 1998, 1999 and
2000 is as follows:

<TABLE>
<CAPTION>
                                              1998         1999       2000
                                           -----------  ---------- -----------
   <S>                                     <C>          <C>        <C>
     Statutory tax (@ 35% rate)..........  $  (257,000) $1,001,000 $(1,206,000)
     Effect of state taxes, net of feder-
      al.................................      (29,000)    114,000    (137,000)
     Nondeductible goodwill..............      769,000   1,613,000   2,147,000
     Valuation reserve...................   (2,058,000)        --          --
                                           -----------  ---------- -----------
       (Benefit) provision for income
        taxes............................  $(1,575,000) $2,728,000 $   804,000
                                           ===========  ========== ===========
</TABLE>

                                     F-18
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000


   The components of the (benefit) provision for income taxes for the years
ended December 31, 1998, 1999 and 2000, are as follows:

<TABLE>
<CAPTION>
                                           1998         1999         2000
                                        -----------  ----------  ------------
   <S>                                  <C>          <C>         <C>
   Federal:
    Current............................ $   414,000  $3,374,000  $  1,195,000
    Deferred...........................      18,000    (933,000)   (1,066,000)
                                        -----------  ----------  ------------
                                            432,000   2,441,000       129,000
                                        -----------  ----------  ------------
   State:
    Current............................      49,000     397,000       825,000
    Deferred...........................       2,000    (110,000)     (150,000)
                                        -----------  ----------  ------------
                                             51,000     287,000       675,000
   Valuation reserve...................  (2,058,000)        --            --
                                        -----------  ----------  ------------
    (Benefit) provision for income
     taxes............................. $(1,575,000) $2,728,000  $    804,000
                                        ===========  ==========  ============
</TABLE>

   Deferred income taxes reflect the net tax effect of temporary differences
between the financial statement and tax basis of assets and liabilities. The
significant components of the Company's deferred tax assets and liabilities as
of December 31, 1999 and 2000, are as follows:

<TABLE>
<CAPTION>
                                                       1999          2000
                                                   ------------  ------------
<S>                                                <C>           <C>
Deferred tax assets--
 Reserve for bad debts............................ $    665,000  $  1,725,000
 Accruals.........................................       51,000       213,000
 Barter activity..................................       85,000        85,000
 Deferred revenue.................................       35,000        35,000
 Other............................................      148,000       129,000
                                                   ------------  ------------
   Total current tax assets.......................      984,000     2,187,000
Interest expense..................................      628,000       963,000
 FCC and other intangibles amortization...........    1,069,000       726,000
 NOL carryforward.................................      705,000     1,598,000
 Debt costs.......................................      338,000       307,000
 Other............................................          --        155,000
                                                   ------------  ------------
   Total deferred tax assets......................    3,724,000     5,936,000
                                                   ------------  ------------
Deferred tax liabilities--
 FCC license......................................  (16,638,000)  (27,721,000)
 Depreciation.....................................     (536,000)     (667,000)
 Other............................................      (84,000)      (48,000)
                                                   ------------  ------------
   Total deferred tax liabilities.................  (17,258,000)  (28,436,000)
                                                   ------------  ------------
Net deferred taxes included in the accompanying
 consolidated balance sheets...................... $(13,534,000) $(22,500,000)
                                                   ============  ============
</TABLE>

   During 1998, the Company utilized its entire NOL carryforward, but acquired
an approximate $1,200,000 net operating loss from the purchase of Allur-
Detroit, Inc. In addition, the Company acquired an approximate $4,000,000 net
operating loss related to the purchase of Davis Broadcasting, Inc. As of
December 31, 2000, the Company had an NOL carryforward of approximately
$4,200,000, which is recorded as a deferred tax asset.

                                     F-19
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000


8. RELATED PARTY TRANSACTIONS:

   Radio One leased office space for $8,000, $13,000 and $18,000 per month in
1998, 1999 and 2000, respectively, from a partnership in which two of the
partners are officers of Radio One (see Note 5). Total rent paid to the
stockholders for fiscal years 1998, 1999 and 2000, was approximately $96,000,
$161,000 and $216,000, respectively.

   The Company has a loan outstanding of $380,000, and accrued interest of
$31,000 and $56,000, as of December 31, 1999 and 2000, respectively, from an
officer. The loan is due in May 2003 and bears interest at 5.6%.

   The Company has a loan outstanding of approximately $262,000, and accrued
interest of $12,000 and $27,000, as of December 31, 1999 and 2000,
respectively, from another officer. The loan is due in May 2004 and bears
interest at 5.6%.

   The Company has a loan outstanding of approximately $88,000, and accrued
interest of $2,000 and $8,000, as of December 31, 1999 and 2000, respectively,
from another officer. The loan is due in May 2004 and bears interest at 5.6%.

   The Company has a loan outstanding of approximately $100,000, and accrued
interest of $6,000, as of December 31, 2000, from another officer. The loan is
due in May 2004 and bears interest at 5.7%.

   Two officers of the Company purchased 1 million and 250,000 shares,
respectively, of the Company's common Stock. The stock was purchased with the
proceeds of a full recourse loan from the Company of $7,000,000 and
$2,005,000, respectively, with accrued interest as of December 31, 2000, of
$83,000 and $25,000, respectively. The loans are due in 2004 and 2005,
respectively, and bear interest at 5.8% and 5.9%, respectively.

   As of December 31, 1999 and 2000, the Company has a receivable of
approximately $260,000 and $412,000, respectively, from a company in which one
of the shareholders is an officer of Radio One.

   During 1999, the stockholders of Radio One of Atlanta, Inc. sold Radio One
of Atlanta, Inc. to the Company in exchange for shares of the Company's common
stock. Effective January 1, 2000, Radio One charged ROA a management fee of
$600,000 per year, and prior to January 1, 2000, the fee was $300,000 per
year.

9. PROFIT SHARING:

   Radio One has a 401(k) profit sharing plan for its employees. Radio One can
contribute to the plan at the discretion of its Board of Directors. Radio One
made no contribution to the plan during fiscal year 1998, 1999 or 2000.

10. SUBSEQUENT EVENTS:

   In February 2001, the Company acquired KTXQ-FM (formerly KDGE-FM), licensed
to Gainsville, Texas, for approximately $52.5 million.

   In February 2001, the Company completed the sale of WDYL-FM in Richmond,
Virginia, and two radio stations, WJMZ-FM and WPEK-FM, in Seneca, South
Carolina for approximately $52.5 million and WARV-FM in Richmond, Virginia for
approximately $1.0 million.

                                     F-20
<PAGE>

                       RADIO ONE, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                       December 31, 1998, 1999 and 2000


   In February 2001, the Company entered into agreements to acquire and/or
operate 16 radio stations in 5 markets for approximately $190.0 million in
cash, stock and the assumption of outstanding debt. The Company expects to
finance these acquisitions with common stock of the Company and cash drawn
from its bank credit facility.

   In February 2001, the Company acquired Nash Communications, which owned
WILD-AM, licensed to Boston, Massachusetts, for approximately $5.0 million in
cash and stock.

   In February 2001, the Company entered into an agreement to sell the assets
of WJZZ-AM, licensed to Kingsley, Michigan, for approximately $225,000.

   In January 2001, the Company entered into an agreement to sell KJOI-AM
(formerly KLUV-AM), licensed to Dallas, Texas, for approximately $16.0
million.

   In January 2001, the Company entered into an agreement to acquire WTLC-AM,
licensed to Indianapolis, Indiana, for approximately $1.1 million in cash.
During 2001, the Company started operating WTLC-AM under a time brokerage
agreement.

   In February 2001, the Company acquired the intellectual property of WTLC-
FM, licensed to Indianapolis, Indiana, for approximately $7.4 million in cash.

                                     F-21
<PAGE>

                        RADIO ONE, INC AND SUBSIDIARIES

                               INDEX TO SCHEDULES

<TABLE>
<S>                                                                          <C>
Report of Independent Public Accountants.................................... S-2
Schedule II--Valuation and Qualifying Account............................... S-3
</TABLE>



                                      S-1
<PAGE>

                   Report of Independent Public Accountants

To the Board of Directors and
Stockholders of Radio One, Inc.:

   We have audited in accordance with auditing standards generally accepted in
the United States, the consolidated balance sheets and statements of
operations, changes in stockholders' equity and cash flows of Radio One, Inc.
and subsidiaries (the Company) included in this Form 10-K and have issued our
report thereon dated February 7, 2001. Our audits were made for the purpose of
forming an opinion on the basic financial statements taken as a whole. The
schedule listed in the accompanying index is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities Exchange Commission's rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion,
fairly state, in all material respects, the financial data required to be set
forth therein in relation to the basic financial statements taken as a whole.

/s/ Arthur Andersen LLP

Baltimore, Maryland
February 7, 2001

                                      S-2
<PAGE>

                        RADIO ONE, INC. AND SUBSIDIARIES

                 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
             For the Years Ended December 31, 1998, 1999, and 2000
                                 (In Thousands)

<TABLE>
<CAPTION>
                            Balance  Additions
                              at      Charged    Acquired              Balance
                           Beginning    to         from                at End
       Description          of Year   Expense  Acquisitions Deductions of Year
       -----------         --------- --------- ------------ ---------- -------
<S>                        <C>       <C>       <C>          <C>        <C>
Allowance for Doubtful
 Accounts:
1998......................  $  904    $1,942      $  258      $1,861   $1,243
1999......................   1,243     2,824         481       2,119    2,429
2000......................   2,429     3,392       1,539       1,854    5,506
Tax Valuation Reserve:
1998......................   2,058       --          --        2,058      --
1999......................     --        --          --          --       --
2000......................     --        --          --          --       --
</TABLE>

                                      S-3