<PAGE>   1

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

                                   FORM 10-K

(MARK ONE)
  [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                                       OR

  [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

              FOR THE TRANSITION PERIOD FROM ________ TO ________

                       COMMISSION FILE NUMBER: 333-36771

                          CITADEL BROADCASTING COMPANY
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                                               <C>
                           NEVADA                                                      86-0703641
              (State or other jurisdiction of                                       (I.R.S. Employer
               incorporation or organization)                                     Identification No.)

                CITY CENTER WEST, SUITE 400                                              89128
      7201 WEST LAKE MEAD BOULEVARD, LAS VEGAS, NEVADA                                 (Zip Code)
          (Address of principal executive offices)
</TABLE>

      Registrant's telephone number, including area code:   (702) 804-5200
        Securities registered pursuant to Section 12(b) of the Act: None

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

     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 is not contained herein, and will not be contained, to the
best of 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 aggregate market value of the registrant's common stock held by
non-affiliates of the registrant is zero.

     As of March 15, 2000, there were 45,000 shares of common stock, $.001 par
value per share, outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                      None
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                          CITADEL BROADCASTING COMPANY

                                   FORM 10-K
                               DECEMBER 31, 1999

                                     INDEX

<TABLE>
<CAPTION>
                                                                             PAGE
                                                                             ----
<S>            <C>                                                           <C>
PART I
     Item 1    - Business..................................................    4
     Item 2    - Properties................................................   28
     Item 3    - Legal Proceedings.........................................   29
     Item 4    - Submission of Matters to a Vote of Security Holders.......   29

PART II
     Item 5    - Market For Registrant's Common Equity and Related
               Stockholder Matters.........................................   29
     Item 6    - Selected Financial Data...................................   29
     Item 7    - Management's Discussion and Analysis of Financial
               Condition and Results of Operations.........................   31
     Item 7A   - Quantitative and Qualitative Disclosures About Market
               Risk........................................................   40
     Item 8    - Financial Statements and Supplementary Data...............   40
     Item 9    - Changes In and Disagreements with Accountants on
               Accounting and Financial Disclosure.........................   40

PART III
     Item 10   - Directors and Executive Officers of the Registrant........   41
     Item 11   - Executive Compensation....................................   43
     Item 12   - Security Ownership of Certain Beneficial Owners and
               Management..................................................   48
     Item 13   - Certain Relationships and Related Transactions............   51

PART IV
     Item 14   - Exhibits, Financial Statement Schedules and Reports on
               Form 8-K....................................................   52
</TABLE>

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FORWARD-LOOKING STATEMENTS

     Certain matters in this Form 10-K, including, without limitation, certain
matters discussed under Item 1, Business, Item 7, Management's Discussion and
Analysis of Financial Condition and Results of Operations, and Item 7A,
Quantitative and Qualitative Disclosures about Market Risk, constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. We based these forward-looking statements largely on our current
expectations and projections about future events and financial trends affecting
our business. The words "believes," "may," "will," "anticipates," "intends,"
"expects" and similar words are intended to identify forward-looking statements.
In addition, any statements that refer to expectations or other
characterizations of future events or circumstances are forward-looking
statements. Readers are cautioned that any such forward-looking statements are
not guarantees of future performance and that matters referred to in such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or achievements to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Our forward-looking
statements are subject to risks, uncertainties and assumptions including, among
other things:

     - the realization of our business strategy,

     - general economic and business conditions, both nationally and in our
       radio markets,

     - our expectations and estimates concerning future financial performance,
       financing plans and the impact of competition,

     - anticipated trends in our industry,

     - the impact of current or pending legislation and regulation and antitrust
       considerations, and

     - other risks and uncertainties discussed in Item 1, Business, under the
       headings "Competition," "Federal Regulation of Radio Broadcasting" and
       "Risk Factors," Item 3, Legal Proceedings, Item 7, Management's
       Discussion and Analysis of Financial Condition and Results of Operations,
       and Item 7A, Quantitative and Qualitative Disclosures about Market Risk.

     In light of these risks and uncertainties, the forward-looking events and
circumstances discussed in this report might not transpire. We undertake no
obligation to publicly update or revise any forward-looking statements because
of new information, future events or otherwise.

INTRODUCTORY STATEMENT

     Unless the context otherwise requires, references in this report to Citadel
Broadcasting and the terms "we," "our" and "us" refer to Citadel Broadcasting
Company. References in this report to Citadel Communications refer to Citadel
Communications Corporation, our parent, which owns all of our issued and
outstanding common stock.

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<PAGE>   4

                                     PART I

ITEM 1.  BUSINESS

     We are a radio broadcaster in the United States that focuses primarily on
acquiring, developing and operating radio stations in mid-sized markets. If we
complete all of our pending transactions, we will own or operate 138 FM and 61
AM radio stations in 42 markets, including clusters of four or more stations in
31 markets, and sell advertising in the United States for one Canadian FM radio
station.

     Our primary strategy is to secure and maintain a leadership position in the
markets we serve and to expand into additional markets where we believe a
leadership position can be obtained. Upon entering a market, we seek to acquire
stations which, when integrated with our existing operations, allow us to reach
a wider range of demographic groups that appeal to advertisers, increase revenue
and achieve substantial cost savings.

     Our portfolio of radio stations is diversified in terms of format, target
demographics and geographic location. Because of the size of our portfolio and
our individual radio station groups, we believe we are not unduly reliant upon
the performance of any single station. We also believe that the diversity of our
portfolio of radio stations helps insulate us from downturns in specific markets
and changes in format preferences.

     A radio station's actual city of license may be different from the
metropolitan market indicated as being served by the station.

CORPORATE HISTORY

     Citadel Broadcasting was formed August 21, 1991 as a Nevada corporation. In
1992 Citadel Broadcasting acquired all of the radio stations then owned or
operated by Citadel Associates Limited Partnership and Citadel Associates
Montana Limited Partnership and certain other radio stations. Lawrence R.
Wilson, Chief Executive Officer of Citadel Communications and Citadel
Broadcasting, was a co-founder and one of the two general partners of Citadel
Associates Limited Partnership and Citadel Associates Montana Limited
Partnership. In 1993, Citadel Communications was incorporated and Citadel
Broadcasting was reorganized as a wholly owned subsidiary of Citadel
Communications. Citadel Communications currently owns all of the issued and
outstanding common stock of Citadel Broadcasting.

     We acquired ownership of additional radio stations in each of 1993, 1994,
1996, 1997, 1998 and 1999. In the various transactions we completed in 1999, we
acquired 57 radio stations in 14 markets and we sold 26 radio stations in seven
markets.

     Beginning in late 1997, we acquired ownership of, and began operating, an
internet service provider, eFortress, which offers its subscribers a variety of
services, including electronic mail and access to the internet. In December
1999, we decided to discontinue our internet operations and adopted a plan for
the sale of eFortress. Although there can be no assurance, we expect to complete
this sale in the second quarter of 2000. For additional information about these
discontinued operations, see Note 3 of the Notes to our Consolidated Financial
Statements included in this report in Item 8, Financial Statements and
Supplementary Data.

OPERATING STRATEGY

     Our operating strategy focuses on maximizing our radio stations' appeal to
advertisers, and consequently our revenue and cash flow. In order to achieve
these goals, we have implemented the strategies described below. We intend to
continue to expand our existing strategies and to develop new methods to enhance
revenue and reduce costs.

     OWNERSHIP OF STRONG RADIO STATION GROUPS. We seek to secure and maintain a
leadership position in the markets we serve by owning multiple stations in those
markets. By coordinating programming, promotional and selling strategies among
each group of local stations, we attempt to capture a wide range of demographic
listener groups which appeal to advertisers. We believe that the diversification
of our programming formats and our collective inventory of available advertising
time strengthen relationships with advertisers and increase our ability to
maximize the value of our inventory. We believe that having multiple stations in
a market also enhances our

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<PAGE>   5

ability to market the advantages of radio advertising versus other advertising
media, such as newspapers and television, thus potentially increasing radio's
share of total advertising dollars spent in a given market.

     We believe that our ability to leverage the existing programming and sales
resources of our radio station groups enables us to enhance the growth potential
of both new and underperforming stations while reducing the risks associated
with undertaking means of improving station performance, including launching new
formats. We also believe that operating leading station groups allows us to
attract and retain talented local management teams, on-air personalities and
sales personnel, which we believe are essential to operating success.
Furthermore, we seek to achieve substantial cost savings through the
consolidation in each of our markets of facilities, management, sales and
administrative personnel and operating resources, such as on-air talent,
programming and music research.

     AGGRESSIVE SALES AND MARKETING. We seek to maximize our share of local
advertising revenue in each of our markets through aggressive sales and
marketing initiatives. We provide extensive training for our sales personnel
through our proprietary interactive training program designed to improve the
selling skills of all sales personnel, both new hires and veteran sales
personnel, and we retain various independent consultants who hold frequent
seminars for, and are available for consultation with, our sales personnel. We
also emphasize regular, informal exchanges of ideas among our management and
sales personnel across our various markets. We seek to maximize our revenue by
utilizing inventory management techniques that allow us to provide our sales
personnel with frequent price adjustments based on regional and local market
conditions. To further strengthen our relationship with advertisers, we also
offer and market our ability to create customer traffic through on-site events
staged at, and broadcast from, the advertisers' business locations. We believe
that, prior to their acquisition by us, many of our acquired stations had
underperformed in sales, due primarily to undersized and under trained sales
staffs responsible for selling inventory on multiple stations. Accordingly, we
have significantly expanded the sales forces of many of our acquired stations
and implemented our training program.

     TARGETED PROGRAMMING. To maintain or improve our position in each market,
we combine extensive market research with an assessment of our competitors'
vulnerabilities in order to identify significant and sustainable target
audiences. We then tailor the programming, marketing and promotion of each radio
station to maximize its appeal to its target audience. We attempt to build
strong markets by:

     - creating distinct, highly visible profiles for our on-air personalities,
       particularly those broadcasting during morning drive time traditionally
       between 6:00 a.m. and 10:00 a.m.,

     - formulating recognizable brand names for select stations such as the
       "Bull" and "Cat Country," and

     - actively participating in community events and charities.

     DECENTRALIZED OPERATIONS. We believe that radio is primarily a local
business and that much of our success is the result of the efforts of regional
and local management and staff. Accordingly, we decentralize much of our
operations to these levels. Each of our regional and local station groups is
managed by a team of experienced broadcasters who understand the musical tastes,
demographics and competitive opportunities of the particular market. Regional
and local managers are responsible for preparing annual operating budgets, and a
portion of their compensation is linked to meeting or surpassing their operating
targets. Corporate management approves each station group's annual operating
budget and imposes strict financial reporting requirements to track station
performance. Corporate management is responsible for long range planning,
establishing corporate policies and serving as a resource to local management.
We have implemented local sales reporting systems at each station to provide
local and corporate management with daily sales information.

ACQUISITION STRATEGY

     Our acquisition strategy is focused on acquiring additional radio stations
in both our existing markets and in new markets in which we believe we can
effectively use our operating strategies. We anticipate that we will continue to
focus on mid-sized markets rather than attempt to expand into larger markets.
Competition among potential purchasers for suitable radio station acquisitions
is intense throughout the United States. We expect to continue to identify and
pursue acquisition opportunities to complement and expand our station portfolio.
Although we have identified further acquisition opportunities, we cannot assure
you that we will be able to reach
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<PAGE>   6

agreement with the identified candidates, that, in the future, we will be able
to identify other suitable and available acquisition opportunities or that we
will be able to complete any such acquisition opportunities. Additional risks
and uncertainties related to our acquisition strategy are discussed below under
the headings "Federal Regulation of Radio Broadcasting" and "Risk Factors."

     In evaluating acquisition opportunities in new markets, we assess our
potential to build leading radio station groups in those markets over time. We
believe that the creation of strong station groups in local markets is essential
to our operating success and generally will not consider entering a new market
unless we believe we can acquire multiple stations in the market. We also
analyze a number of additional factors which we believe are important to our
success, including the number and quality of commercial radio signals
broadcasting in the market, the nature of the competition in the market, our
ability to improve the operating performance of the radio station or stations
under consideration and the general economic conditions of the market.

     We believe that our acquisition strategy, if properly implemented, could
have a number of benefits, including:

     - diversified revenue and broadcast cash flow across a greater number of
       stations and markets,

     - improved broadcast cash flow margins through the consolidation of
       facilities and the elimination of redundant expenses,

     - broadened range of advertising packages to offer advertisers,

     - improved leverage in various key vendor negotiations,

     - enhanced appeal to top industry management talent, and

     - increased overall scale which should facilitate our capital raising
       activities.

PENDING TRANSACTIONS

     There are several transactions currently pending which, if completed, would
result in our purchasing 48 FM and 28 AM radio stations, acquiring the right to
operate one additional FM radio station, acquiring the right to sell advertising
in the United States for one Canadian FM radio station and selling two AM radio
stations. The aggregate purchase price for our pending acquisitions is
approximately $510.2 million in cash, 200,000 shares of Citadel Communications'
common stock valued at approximately $10.1 million, based on the closing price
of the common stock on December 2, 1999, and one AM radio station in each of
Albuquerque, New Mexico and Binghamton, New York. Under certain circumstances,
Citadel Communications' common stock may not be delivered as a portion of the
aggregate purchase price. In that event, approximately $10.1 million in cash
will be substituted for the common stock.

     The completion of each of our pending transactions is subject to various
conditions, including Federal Communications Commission consent to the
assignment of the station licenses to us or consent to transfer of control of
the station licenses to us, as the case may be, and the expiration or
termination of any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended. Although we believe these
closing conditions are generally customary for transactions of this type, there
can be no assurance that the conditions will be satisfied.

     The following is a brief discussion of each of our pending transactions:

     - On October 5, 1999, we entered into an asset purchase agreement with
       Kenneth A. Rushton, as Trustee of the Chapter 7 bankruptcy estate of
       Venture Broadcasting, Inc., to acquire one AM radio station serving the
       Salt Lake City, Utah market, including the related tower site, for a
       purchase price of approximately $0.6 million in cash, which has been paid
       and is being held in escrow pending closing of the transaction. An
       application seeking FCC approval of assignment of the station license was
       filed on October 25, 1999, and an initial grant of the application was
       received on February 29, 2000. The closing of this transaction had been
       delayed as a petition to deny the transfer of the license had been filed
       with the FCC. We now anticipate that this acquisition will close in April
       2000. Pending closing of this transaction, we operate the station to be
       acquired under a local marketing agreement.
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     - On October 8, 1999, we entered into an exchange agreement with Titus
       Broadcasting Systems, Inc. to acquire one AM radio station in Binghamton,
       New York in exchange for one AM radio station in Binghamton owned by us
       and approximately $0.6 million in cash. We have delivered an irrevocable
       letter of credit in favor of Titus Broadcasting Systems, Inc. in the
       amount of $30,000 to secure our obligations under the exchange agreement.
       An application seeking FCC approval of assignment of the station licenses
       was filed on October 22, 1999. The closing of this transaction has been
       delayed by the FCC's analysis of market revenue share in Binghamton.

     - On October 27, 1999, we entered into an asset purchase agreement with
       Broadcasting Partners Holdings, L.P. to acquire 23 FM and 13 AM radio
       stations in Buffalo/Niagara Falls, Syracuse and Ithaca, New York;
       Atlantic City/Cape May, New Jersey; Tyler/Longview, Texas; Monroe,
       Louisiana; New London, Connecticut; New Bedford/Fall River,
       Massachusetts; and Augusta/Waterville, Presque Isle and Dennysville/
       Calais, Maine, as well as the right to operate an additional FM radio
       station in Atlantic City/Cape May under a program service and time
       brokerage agreement and the right to sell advertising in the United
       States for one FM radio station in Niagara Falls, Ontario under a joint
       sales agreement. The aggregate purchase price is approximately $190.0
       million in cash. We have delivered an irrevocable letter of credit in
       favor of Broadcasting Partners Holdings in the amount of $12.0 million to
       secure our obligations under the asset purchase agreement. The stations
       indicated include one AM radio station in Buffalo/Niagara Falls that an
       affiliate of the seller has entered into an agreement to purchase. If
       this transaction has not been completed prior to our acquisition, we will
       be assigned the rights under the purchase agreement. An application
       seeking FCC approval of assignment of the station licenses was filed on
       November 9, 1999, and an initial grant of the application was received on
       February 28, 2000. The closing of this transaction had been delayed by
       the FCC's analysis of market revenue share in various markets. We now
       anticipate that this acquisition will close in April 2000 (other than the
       acquisition of the one AM station in Buffalo/ Niagara Falls referred to
       above for which we will be assigned the rights under the purchase
       agreement).

     - On November 16, 1999, we entered into an asset purchase agreement with
       KSMB/KACY Radio Broadcasting Company, KVOL Radio Broadcasting Company and
       Powell Broadcasting Company, Inc. to acquire two FM and two AM radio
       stations in Lafayette, Louisiana for the purchase price of approximately
       $8.5 million in cash. We have delivered an irrevocable letter of credit
       in favor of KSMB/ KACY Radio Broadcasting and KVOL Radio Broadcasting in
       the amount of $425,000 to secure our obligations under the asset purchase
       agreement. An application seeking FCC approval of assignment of the
       station licenses was filed on December 10, 1999, and an initial grant of
       the application was received on March 15, 2000. The closing of this
       transaction had been delayed by the FCC's analysis of market revenue
       share in Lafayette. We now anticipate that this acquisition will close in
       March or April 2000.

     - On November 16, 1999, we entered into an asset purchase agreement with
       LifeTalk Broadcasting Association to acquire one AM radio station in
       Albuquerque, New Mexico in exchange for one AM radio station in
       Albuquerque owned by us and approximately $5.4 million in cash, of which
       $1.0 million has been paid in advance. An application seeking FCC
       approval of assignment of the station licenses was filed on December 6,
       1999, and an initial grant of the application was received on March 23,
       2000. The closing of this transaction had been delayed by the FCC's
       analysis of market revenue share in Albuquerque. We now anticipate that
       this transaction will close in April or May 2000.

     - On December 3, 1999, we entered into an asset purchase agreement with
       Montachusett Broadcasting, Inc. to acquire one FM radio station serving
       the Worcester, Massachusetts market for the purchase price of
       approximately $3.5 million in cash, which has been paid and is being held
       in escrow pending closing of the transaction. We have delivered an
       irrevocable letter of credit in favor of Montachusett Broadcasting in the
       amount of $200,000 to secure our obligations under the asset purchase
       agreement. An application seeking FCC approval of assignment of the
       station licenses was filed on December 9, 1999, an initial grant of the
       application was received on February 4, 2000 and a final order was
       received on March 20, 2000. We expect to close this transaction at such
       time that an order is issued in an FCC proceeding to change the station's
       city of license. Pending closing of this transaction, we operate the
       station to be acquired under a local marketing agreement.

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     - On December 3, 1999, we entered into an asset purchase agreement with
       Liggett Broadcast, Inc. and certain of its affiliates to acquire four FM
       and two AM radio stations serving the Lansing/East Lansing, Michigan
       market, two FM stations serving the Saginaw/Bay City/Midland, Michigan
       market and one FM radio station serving the Flint, Michigan market. The
       aggregate purchase price is approximately $120.5 million, consisting of
       200,000 shares of Citadel Communications' common stock valued at $50.375
       per share, based on the closing share price of the common stock on
       December 2, 1999, and approximately $110.4 million in cash. However, if
       the value of Citadel Communications' common stock at the time of closing,
       based on the 20-day average closing sale price per share prior to
       closing, is less than $45.3375 (90% of the value on December 2, 1999),
       then no common stock will be issued and the purchase price will be paid
       entirely in cash. We have delivered an irrevocable letter of credit in
       favor of Liggett Broadcast in the amount of $6.0 million to secure our
       obligations under the asset purchase agreement. An application seeking
       FCC approval of assignment of the station licenses was filed on December
       20, 1999, and an initial grant of the full application was received on
       February 24, 2000.

       In February 2000, we received a request for additional information and
       documents from the United States Department of Justice relating to
       stations in Saginaw/Bay City/Midland. Under the applicable rules, this
       request extends the waiting period under the Hart-Scott-Rodino Act for a
       period of 20 days after receipt by the Department of Justice of the
       information and documents requested from all parties from whom such
       information and documents have been requested. To resolve the Department
       of Justice's concerns, we may agree to sell one or more of our existing
       stations, or stations to be acquired, serving Saginaw/Bay City/Midland in
       connection with our acquisition of stations from Liggett Broadcast and
       its affiliates.

     - On December 21, 1999, we entered into an asset purchase agreement with
       WBA, Inc. to acquire one FM radio station serving the Worcester,
       Massachusetts market for the purchase price of approximately $14.3
       million in cash. We have delivered an irrevocable letter of credit in
       favor of WBA in the amount of $712,500 to secure our obligations under
       the asset purchase agreement. An application seeking FCC approval of
       assignment of the station licenses was filed on January 6, 2000.

     - On January 23, 2000, we entered into a stock purchase agreement with
       Bloomington Broadcasting Holdings, Inc. and its stockholders to purchase
       all of the issued and outstanding capital stock of Bloomington
       Broadcasting Holdings. Through its subsidiaries, Bloomington Broadcasting
       Holdings is expected to own and operate at closing 13 FM and seven AM
       radio stations serving the Grand Rapids, Michigan; Columbia, South
       Carolina; Chattanooga, Tennessee; Johnson City/Kingsport/Bristol,
       Tennessee; and Bloomington, Illinois markets for the aggregate purchase
       price of approximately $176.0 million in cash. This amount includes
       repayment of indebtedness of Bloomington Broadcasting Holdings that may
       be outstanding at the time of closing and a deferred obligation relating
       to a recent radio station purchase by Bloomington Broadcasting Holdings.
       Certain purchase price adjustments may also be made at closing. We have
       delivered an irrevocable letter of credit in favor of Bloomington
       Broadcasting Holdings in the amount of $15.0 million to secure our
       obligations under the stock purchase agreement. The stations indicated
       include one AM radio station serving the Johnson City/Kingsport/Bristol
       market that Bloomington Broadcasting Holdings has entered into an
       agreement to purchase. If this transaction has not been completed prior
       to completion of our acquisition of Bloomington Broadcasting Holdings, we
       will be assigned the rights under the purchase agreement. An application
       seeking FCC approval of transfer of control of the station licenses was
       filed on February 4, 2000. The closing of this transaction has been
       delayed by the FCC's analysis of market revenue share in Grand Rapids,
       Columbia, Johnson City/ Kingsport/Bristol and Bloomington.

     - On January 31, 2000, we entered into an asset purchase agreement with CAT
       Communications Corporation to acquire one FM radio station and one AM
       radio station serving the Worcester, Massachusetts market for the
       purchase price of approximately $0.9 million. We have delivered an
       irrevocable letter of credit in favor of CAT Communications in the amount
       of $75,000 to secure our obligations under the asset purchase agreement.
       An application seeking FCC approval of assignment of the station licenses
       was filed on February 10, 2000.

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     We expect to close one or more of our pending transactions following
receipt of an initial grant from the FCC, but prior to receipt of a final order
from the FCC. Until an order becomes final, third parties may file a request for
reconsideration or judicial review or the FCC may reconsider the grant on its
own motion. Such action could expose us to a modification or set aside of the
initial approval. There can be no assurance that a modification or set aside
will not occur should we elect to close a transaction prior to receipt of a
final order from the FCC. See the discussion below under the heading "Federal
Regulation of Radio Broadcasting" and the subheading "Ownership Matters."

STATION PORTFOLIO

     We have a national presence, and our portfolio of stations is diversified
in terms of format and target demographics, as well as geographic location. This
diversity reduces our reliance upon the performance of any single station and
helps insulate us from downturns in specific markets and changes in format
preferences.

     If we complete all of our pending transactions, we will own 136 FM and 61
AM radio stations in 42 mid-sized markets, operate two additional FM radio
stations, one in Reno, Nevada and one in Atlantic City/Cape May, New Jersey,
pursuant to a local marketing agreement and a program service and time brokerage
agreement, respectively, and sell advertising in the United States for one
Canadian FM radio station. The following table shows the radio stations we will
own or operate assuming completion of the pending transactions described above.
We obtained all metropolitan statistical area rank information for all markets
from Investing in Radio 1999 Market Report (3rd ed.) published by BIA
Publications, Inc.

<TABLE>
<CAPTION>
                                                                     NUMBER OF
                                                                     STATIONS
                                                              MSA    ---------
                                                              RANK   FM    AM
                                                              ----   ---   ---
<S>                                                           <C>    <C>   <C>
Providence, RI..............................................   33      4    2
Salt Lake City, UT(1).......................................   35      4    3
Buffalo/Niagara Falls, NY(1)(2).............................   43      3    2
Oklahoma City, OK...........................................   54      4    1
Wilkes-Barre/Scranton, PA...................................   64      7    4
Grand Rapids, MI(1).........................................   66      3    1
Allentown/Bethlehem, PA.....................................   67      2   --
Albuquerque, NM(1)..........................................   71      5    3
Syracuse, NY(1).............................................   73      3    1
Harrisburg/Lebanon/Carlisle, PA(3)..........................   76      3    1
Baton Rouge, LA.............................................   82      4    2
Little Rock, AR(4)..........................................   83      8    3
Spokane, WA.................................................   88      4    3
Columbia, SC(1).............................................   89      3    1
Colorado Springs, CO........................................   94      3    2
Johnson City/Kingsport/Bristol, TN(1).......................   95      2    3
Lafayette, LA(1)............................................   98      5    3
Chattanooga, TN(1)..........................................  102      3    1
York, PA(3).................................................  103     --    1
Charleston, SC..............................................  104      5    3
Worcester, MA(1)............................................  112      4    1
Lansing/East Lansing, MI(1).................................  114      4    2
Flint, MI(1)................................................  116      1   --
Portsmouth/Dover/Rochester, NH..............................  117      4   --
Modesto, CA.................................................  122      4    1
Saginaw/Bay City/Midland, MI(1)(5)..........................  124      7    1
Boise, ID...................................................  126      4    1
Reno, NV(6).................................................  127      4    1
Atlantic City/Cape May, NJ(1)(7)............................  136      3    1
</TABLE>

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<TABLE>
<CAPTION>
                                                                     NUMBER OF
                                                                     STATIONS
                                                              MSA    ---------
                                                              RANK   FM    AM
                                                              ----   ---   ---
<S>                                                           <C>    <C>   <C>
Tyler/Longview, TX(1).......................................  140      1    4
Portland, ME................................................  160      6   --
New London, CT(1)...........................................  164      2    1
New Bedford/Fall River, MA(1)...............................  165      1    1
Binghamton, NY(1)...........................................  166      3    2
Bloomington, IL(1)..........................................  230      2    1
Monroe, LA(1)...............................................  233      4   --
Augusta/Waterville, ME(1)...................................  249      2    2
Ithaca, NY(1)...............................................  258      1    1
Presque Isle, ME(1).........................................   NA      3   --
Dennysville/Calais, ME(1)...................................   NA      1   --
Muncie, IN..................................................   NA      1    1
Kokomo, IN..................................................   NA      1   --
                                                              ---    ---   --
     TOTAL..................................................         138   61
</TABLE>

---------------
NA -- information not available

(1) The completion of our pending transactions in these markets is subject to
    various conditions. Although we believe these closing conditions are
    generally customary for transactions of this type, there can be no assurance
    that the conditions will be satisfied.

(2) The stations indicated do not include one FM radio station in Niagara Falls,
    Ontario for which we expect to sell advertising in the United States under a
    joint sales agreement.

(3) Harrisburg/Lebanon/Carlisle and York are adjacent markets with numerous
    overlapping radio signals.

(4) Three of these stations primarily serve the surrounding communities outside
    of Little Rock.

(5) We may agree to sell one or more of the indicated stations serving
    Saginaw/Bay City/Midland in connection with our pending acquisition of
    stations serving Saginaw/Bay City/Midland.

(6) We operate one of the listed FM radio stations in Reno under a local
    marketing agreement. We do not own this station.

(7) We expect to operate one of the listed FM stations in Atlantic City/Cape May
    under a program service and time brokerage agreement. We will not own this
    station, but expect that we will have an option to purchase this station
    beginning in 2001.

ADVERTISING SALES

     Virtually all of our revenue is generated from the sale of local, regional
and national advertising for broadcast on our radio stations. In 1999,
approximately 81% of our net broadcasting revenue was generated from the sale of
local and regional advertising. Additional broadcasting revenue is generated
from the sale of national advertising, network compensation payments and other
miscellaneous transactions. See Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations, under the heading "General." The
major categories of our advertisers include telephone companies, restaurants,
fast food, automotive and grocery. Each station's local sales staff solicits
advertising either directly from the local advertiser or indirectly through an
advertising agency. We pay a higher commission rate to the sales staff for
generating direct sales because we believe that through direct advertiser
relationships we can better understand the advertiser's business needs and more
effectively design an advertising campaign to help the advertiser sell its
product or service. We employ personnel in each of our markets to produce
commercials for the advertisers. National sales are made by a firm specializing
in radio advertising sales on the national level in exchange for a commission
from us that is based on our gross revenue from the advertising obtained.
Regional sales, which we define as sales in regions surrounding our markets to
companies that advertise in our markets, are generally made by our local sales
staff.

                                       10
<PAGE>   11

     Depending on the programming format of a particular station, we estimate
the optimum number of advertisements available for sale. The number of
advertisements that can be broadcast without jeopardizing listening levels, and
the resulting ratings, is limited in part by the format of a particular station.
Our stations strive to maximize revenue by managing their on-air inventory of
advertising time and adjusting prices based on local market conditions and on
our ability, through our marketing efforts, to provide advertisers with an
effective means of reaching a targeted demographic group. Each of our stations
has a general target level of on-air inventory that it makes available for
advertising. This target level of inventory for sale may be different at
different times of the day but tends to remain stable over time. Much of our
selling activity is based on demand for our radio stations' on-air inventory
and, in general, we respond to this demand by varying prices rather than by
varying our target inventory level for a particular station. Therefore, most
changes in revenue are explained by demand-driven pricing changes rather than by
changes in the available inventory.

     We believe that radio is one of the most efficient and cost-effective means
for advertisers to reach specific demographic groups. Advertising rates charged
by radio stations are based primarily on:

     - a station's share of audiences in the demographic groups targeted by
       advertisers, as measured by ratings surveys estimating the number of
       listeners tuned to the station at various times,

     - the number of stations in the market competing for the same demographic
       groups,

     - the supply of, and demand for, radio advertising time, and

     - certain qualitative factors.

     Rates are generally highest during morning and afternoon commuting hours.

     A station's listenership is reflected in ratings surveys that estimate the
number of listeners tuned to the station and the time they spend listening. Each
station's ratings are used by our advertisers and advertising representatives to
consider advertising with the station and are used by us to chart audience
growth, set advertising rates and adjust programming. The radio broadcast
industry's principal ratings service is The Arbitron Company, which publishes
periodic ratings surveys for significant domestic radio markets. These surveys
are our primary source of ratings data.

COMPETITION

     The radio broadcasting industry is highly competitive. The success of each
of our stations depends largely upon its audience ratings and its share of the
overall advertising revenue within its market. Our audience ratings and
advertising revenue are subject to change, and any adverse change in a
particular market affecting advertising expenditures or an adverse change in the
relative market positions of the stations located in a particular market could
have a material adverse effect on the revenue of our radio stations located in
that market. There can be no assurance that any one of our radio stations will
be able to maintain or increase its current audience ratings or advertising
revenue market share.

     Our stations compete for listeners and advertising revenue directly with
other radio stations within their respective markets. Radio stations compete for
listeners primarily on the basis of program content that appeals to a particular
demographic group. By building a strong listener base consisting of a specific
demographic group in each of our markets, we are able to attract advertisers
seeking to reach those listeners. Companies that operate radio stations must be
alert to the possibility of another station changing its format to compete
directly for listeners and advertisers. Another station's decision to convert to
a format similar to that of one of our radio stations in the same geographic
area may result in lower ratings and advertising revenue, increased promotion
and other expenses and, consequently, lower broadcast cash flow for us.

     Factors that are material to a radio station's competitive position include
management experience, the station's local audience rank in its market,
transmitter power, assigned frequency, audience characteristics, local program
acceptance and the number and characteristics of other radio stations in the
market area. We attempt to improve our competitive position in each market by
extensively researching our stations' programming, by implementing advertising
campaigns aimed at the demographic groups for which our stations program and by

                                       11
<PAGE>   12

managing our sales efforts to attract a larger share of advertising dollars.
However, we compete with some organizations that have greater financial
resources than we have.

     FCC policies and rules permit ownership and operation of multiple local
radio stations. We believe that radio stations that elect to take advantage of
joint arrangements such as local marketing agreements or joint sales agreements
may in certain circumstances have lower operating costs and may be able to offer
advertisers more attractive rates and services. Although we currently operate
multiple stations in most of our markets and intend to pursue the creation of
additional multiple station groups, our competitors in certain markets include
operators of multiple stations or operators who already have entered into local
marketing agreements or joint sales agreements. We also compete with other radio
station groups to purchase additional stations. Some of these groups are owned
or operated by companies that have substantially greater financial and other
resources than we have.

     Although the radio broadcasting industry is highly competitive, some
barriers to entry exist. The operation of a radio broadcast station requires a
license from the FCC, and the number of radio stations that can operate in a
given market is limited by the availability of FM and AM radio frequencies
allotted by the FCC to communities in that market, as well as by the FCC's
multiple ownership rules regulating the number of stations that may be owned and
controlled by a single entity. The FCC's multiple ownership rules have changed
significantly as a result of the Telecommunications Act. For more information
about FCC regulation and the provisions of the Telecommunications Act, see the
discussion below under the heading "Federal Regulation of Radio Broadcasting."
Our stations also compete for advertising revenue with other media, including
newspapers, broadcast television, cable television, magazines, direct mail,
coupons and outdoor advertising. In addition, the radio broadcasting industry is
subject to competition from new media technologies that are being developed or
introduced, such as the delivery of audio programming by cable television
systems, by satellite and by digital audio broadcasting. Digital audio
broadcasting may deliver by satellite to nationwide and regional audiences,
multi-channel, multi-format, digital radio services with sound quality
equivalent to compact discs. The delivery of information through the Internet
has also created a new form of competition. The radio broadcasting industry
historically has grown despite the introduction of new technologies for the
delivery of entertainment and information. A growing population and greater
availability of radios, particularly car and portable radios, have contributed
to this growth. There can be no assurance, however, that the development or
introduction in the future of any new media technology will not have an adverse
effect on the radio broadcasting industry.

     The FCC has recently authorized spectrum for the use of a new technology,
satellite digital audio radio services, to deliver audio programming. Digital
audio radio services may provide a medium for the delivery by satellite or
terrestrial means of multiple new audio programming formats to local and
national audiences. It is not known at this time whether this digital technology
also may be used in the future by existing radio broadcast stations either on
existing or alternate broadcasting frequencies. The FCC has acted to create a
new low power radio service which could open up opportunities for low cost
neighborhood service on frequencies which would not interfere with existing
stations.

     We cannot predict what other matters might be considered in the future by
the FCC, nor can we assess in advance what impact, if any, the implementation of
any of these proposals or changes might have on our business. See the discussion
below under the heading "Federal Regulation of Radio Broadcasting."

FEDERAL REGULATION OF RADIO BROADCASTING

     INTRODUCTION. The ownership, operation and sale of broadcast stations,
including those licensed to us, are subject to the jurisdiction of the FCC. The
FCC acts under authority derived from the Communications Act of 1934, as
amended. The Communications Act was amended in 1996 by the Telecommunications
Act of 1996 to make changes in several broadcast laws. Among other things, the
FCC:

     - assigns frequency bands for broadcasting,

     - determines whether to approve changes in ownership or control of station
       licenses,

     - regulates equipment used by stations,

                                       12
<PAGE>   13

     - adopts and implements regulations and policies that directly or
       indirectly affect the ownership, operation and employment practices of
       stations, and

     - has the power to impose penalties for violations of its rules under the
       Communications Act.

     The following is a brief summary of certain provisions of the
Communications Act and of specific FCC regulations and policies. Failure to
observe these or other rules and policies can result in the imposition of
various sanctions, including fines, the grant of short (less than the maximum)
license renewal terms or, for particularly egregious violations, the denial of a
license renewal application, the revocation of a license or the denial of FCC
consent to acquire additional broadcast properties. Reference should be made to
the Communications Act, FCC rules and the public notices and rulings of the FCC
for further information concerning the nature and extent of federal regulation
of broadcast stations.

     LICENSE GRANT AND RENEWAL. Until recently, radio broadcast licenses were
granted for maximum terms of seven years, but acting under the authority of the
Telecommunications Act, the FCC recently revised its rules to extend the maximum
term for future renewals to eight years. Licenses may be renewed through an
application to the FCC. The Telecommunications Act prohibits the FCC from
considering any competing applications for the radio frequency if the FCC finds
that the licensee's station has served the public interest, convenience and
necessity, that there have been no serious violations by the licensee of the
Communications Act or the rules and regulations of the FCC, and that there have
been no other violations by the licensee of the Communications Act or the rules
and regulations of the FCC that, when taken together, would constitute a pattern
of abuse.

     Petitions to deny license renewals can be filed by interested parties,
including members of the public. These petitions may raise various issues before
the FCC. The FCC is required to hold hearings on renewal applications if the FCC
is unable to determine that renewal of a license would serve the public
interest, convenience and necessity, or if a petition to deny raises a
substantial and material question of fact as to whether the grant of the renewal
application would be prima facie inconsistent with the public interest,
convenience and necessity. Also, during certain periods when a renewal
application is pending, the transferability of the applicant's license is
restricted.

     We are not currently aware of any facts that would prevent the timely
renewal of our licenses to operate our radio stations, although there can be no
assurance that our licenses will be renewed.

     The FCC classifies each AM and FM station. An AM station operates on either
a clear channel, regional channel or local channel. A clear channel is one on
which AM stations are assigned to serve wide areas. Clear channel AM stations
are classified as either: Class A stations, which operate on an unlimited time
basis and are designated to render primary and secondary service over an
extended area; Class B stations, which operate on an unlimited time basis and
are designed to render service only over a primary service area; or Class D
stations, which operate either during daytime hours only, during limited times
only or on an unlimited time basis with low nighttime power. A regional channel
is one on which Class B and Class D AM 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 stations operate on an unlimited time basis and serve
primarily a community and the suburban and rural areas immediately contiguous
thereto. Class C AM stations operate on a local channel and are 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 station are
determined by its class. FM class designations depend upon the geographic zone
in which the transmitter of the FM station is located. In general, commercial FM
stations are classified as follows, in order of increasing power and antenna
height: Class A, B1, C3, B, C2, C1 and C.

     The following table sets forth the market, call letters, FCC license
classification, antenna height above average terrain (HAAT), power and frequency
of each of the stations we own or operate, assuming the completion

                                       13
<PAGE>   14

of the pending transactions described above under the heading "Pending
Transactions," and the date on which each station's FCC license expires.

     As you review the information in the following table, you should note the
following:

     - The symbol "*" indicates a station which is the subject of one of our
       pending transactions. The completion of each of the pending transactions
       is subject to conditions. Although we believe these conditions are
       generally customary for transactions of this type, there can be no
       assurance that the conditions will be satisfied. See the discussion above
       under the heading "Pending Transactions."

     - A station's actual city of license may be different from the shown
       metropolitan market served. In addition, three of the stations listed as
       Little Rock stations primarily serve the surrounding communities outside
       of Little Rock.

     - Pursuant to FCC rules and regulations, many AM radio stations are
       licensed to operate at a reduced power during nighttime broadcasting
       hours, which results in reducing the radio station's coverage during
       those hours of operation. Both power ratings are shown, where applicable.

<TABLE>
<CAPTION>
                                                                                               EXPIRATION
                                                             HAAT                               DATE OF
                                                     FCC      IN      POWER IN                    FCC
MARKET                                 STATION      CLASS   METERS    KILOWATTS    FREQUENCY    LICENSE
------                               ------------   -----   ------   -----------   ---------   ----------
<S>                                  <C>            <C>     <C>      <C>           <C>         <C>
Providence, RI.....................  WPRO-AM          B        NA        5.0         630 kHz    04-01-06
                                     WPRO-FM          B       168       39.0        92.3 MHz    04-01-06
                                     WSKO-AM          B        NA        5.0         790 kHz    04-01-06
                                     WWLI-FM          B       152       50.0       105.1 MHz    04-01-06
                                     WHCK-FM          A       163        2.3        99.7 MHz    04-01-06
                                     WHKK-FM          A        90        4.2       100.3 MHz    04-01-06

Salt Lake City, UT.................  KBEE-AM          B        NA    10.0/0.195      860 kHz    10-01-05
                                     KUBL-FM          C      1140       26.0        93.3 MHz    10-01-05
                                     KENZ-FM          C       869       45.0       107.5 MHz    10-01-05
                                     KBER-FM          C      1140       25.0       101.1 MHz    10-01-05
                                     KFNZ-AM          B        NA        5.0        1320 kHz    10-01-05
                                     KBEE-FM          C       894       40.0        98.7 MHz    10-01-05
                                     *KWUN-AM (1)     C        NA        1.0        1230 kHz    10-01-05

Buffalo/Niagara Falls, NY(2).......  *WGRF-FM         B       217       24.0        96.9 MHz    06-01-06
                                     *WEDG-FM         B       106       49.0       103.3 MHz    06-01-06
                                     *WHTT-FM         B       118       50.0       104.1 MHz    06-01-06
                                     *WMNY-AM         D        NA        1.0        1120 kHz    06-01-06
                                     *WHLD-AM         B        NA     5.0/0.144     1270 kHz    06-01-06

Oklahoma City, OK..................  KATT-FM          C       363       100.0      100.5 MHz    06-01-05
                                     KYIS-FM          C     335.5       100.0       98.9 MHz    06-01-05
                                     KCYI-FM          A        96        6.0        97.9 MHz    06-01-05
                                     KNTL-FM          A       100        6.0       104.9 MHz    06-01-05
                                     WWLS-AM          B        NA        1.0         640 kHz    06-01-05
</TABLE>

                                       14
<PAGE>   15

<TABLE>
<CAPTION>
                                                                                               EXPIRATION
                                                             HAAT                               DATE OF
                                                     FCC      IN      POWER IN                    FCC
MARKET                                 STATION      CLASS   METERS    KILOWATTS    FREQUENCY    LICENSE
------                               ------------   -----   ------   -----------   ---------   ----------
<S>                                  <C>            <C>     <C>      <C>           <C>         <C>
Wilkes-Barre/Scranton, PA..........  WAZL-AM          C        NA        1.0        1490 kHz    08-01-06
                                     WXBE-FM          B       222       19.5        97.9 MHz    08-01-06
                                     WARM-AM          B        NA        5.0         590 kHz    08-01-06
                                     WMGS-FM          B       422        5.3        92.9 MHz    08-01-06
                                     WBHT-FM          A       336       0.50        97.1 MHz    08-01-06
                                     WXAR-FM          A       308       0.30        95.7 MHz    08-01-06
                                     WCTP-FM          A       235       0.52        94.3 MHz    08-01-06
                                     WCTD-FM          A       207       1.45        93.7 MHz    08-01-06
                                     WKJN-AM          B        NA     5.0/.037      1440 kHz    08-01-06
                                     WEMR-AM          B        NA      5.0/1.0      1460 kHz    08-01-06
                                     WEMR-FM          A       354       0.24       107.7 MHz    08-01-06

Grand Rapids, MI...................  *WKLQ-FM         B       152       50.0        94.5 MHz    10-01-04
                                     *WBBL-AM         C        NA        1.0        1340 kHz    10-01-04
                                     *WLAV-FM         B       149       50.0        96.9 MHz    10-01-04
                                     *WODJ-FM         B       150       50.0       107.3 MHz    10-01-04

Allentown/Bethlehem, PA............  WCTO-FM          B       152       50.0        96.1 MHz    08-01-06
                                     WLEV-FM          B       327       10.9       100.7 MHz    08-01-06

Albuquerque, NM....................  KKOB-AM          B        NA       50.0         770 kHz    10-01-05
                                     KKOB-FM          C      1265       20.2        93.3 MHz    10-01-05
                                     KMGA-FM          C      1259       22.5        99.5 MHz    10-01-05
                                     KTBL-FM          C      1276       20.4       103.3 MHz    10-01-05
                                     KHFM-FM          C      1260       20.0        96.3 MHz    10-01-05
                                     KRST-FM          C      1268       22.0        92.3 MHz    10-01-05
                                     KNML-AM          B        NA      1.0/0.5      1050 kHz    10-01-05
                                     *KSVA-AM         B        NA        5.0         610 kHz    10-01-05

Syracuse, NY.......................  *WAQX-FM        B1        91       25.0        95.7 MHz    06-01-06
                                     *WLTI-FM         A        61        4.0       105.9 MHz    06-01-06
                                     *WNSS-AM         B        NA        5.0        1260 kHz    06-01-06
                                     *WNTQ-FM         B       201       97.0        93.1 MHz    06-01-06

Harrisburg/Lebanon/Carlisle
  and York, PA.....................  WRKZ-FM          B       283       14.1       106.7 MHz    08-01-06
                                     WHYL-FM          A       100    H3.0/V2.75    102.3 MHz    08-01-06
                                     WHYL-AM          B        NA        5.0         960 kHz    08-01-06
                                     WQXA-AM          B        NA        1.0        1250 kHz    08-01-06
                                     WQXA-FM          B       215       25.1       105.7 MHz    08-01-06

Baton Rouge, LA....................  KQXL-FM         C2       148       50.0       106.5 MHz    06-01-04
                                     WXOK-AM          B        NA      5.0/1.0      1460 kHz    06-01-04
                                     WEMX-FM         C1       299       100.0       94.1 MHz    06-01-04
                                     WCAC-FM          C       306       100.0      103.3 MHz    06-01-04
                                     WIBR-AM          B        NA      5.0/1.0      1300 kHz    06-01-04
                                     KOOJ-FM         C1       304       97.0        93.7 MHz    06-01-04
</TABLE>

                                       15
<PAGE>   16

<TABLE>
<CAPTION>
                                                                                               EXPIRATION
                                                             HAAT                               DATE OF
                                                     FCC      IN      POWER IN                    FCC
MARKET                                 STATION      CLASS   METERS    KILOWATTS    FREQUENCY    LICENSE
------                               ------------   -----   ------   -----------   ---------   ----------
<S>                                  <C>            <C>     <C>      <C>           <C>         <C>
Little Rock, AR....................  KARN-FM          A       100        3.0       102.5 MHz    06-01-04
                                     KARN-AM          B        NA        5.0         920 kHz    06-01-04
                                     KKRN-FM          A       100        6.0       101.7 MHz    06-01-04
                                     KIPR-FM         C1       286       100.0       92.3 MHz    06-01-04
                                     KOKY-FM          A       118       4.10       102.1 MHz    06-01-04
                                     KLAL-FM         C2        95       50.0       107.7 MHz    06-01-04
                                     KAFN-FM          A       100        6.0       102.5 MHz    06-01-04
                                     KLIH-AM          B        NA      2.0/1.2      1250 kHz    06-01-04
                                     KURB-FM          C       392       100.0       98.5 MHz    06-01-04
                                     KVLO-FM         C2       150       50.0       102.9 MHz    06-01-04
                                     KAAY-AM          A        NA       50.0        1090 kHz    06-01-04

Spokane, WA........................  KGA-AM           A        NA       50.0        1510 kHz    02-01-06
                                     KDRK-FM          C       725       56.0        93.7 MHz    02-01-06
                                     KJRB-AM          B        NA        5.0         790 kHz    02-01-06
                                     KAEP-FM          C       582       100.0      105.7 MHz    02-01-06
                                     KEYF-AM          B        NA        5.0        1050 kHz    02-01-06
                                     KEYF-FM          C       490       100.0      101.1 MHz    02-01-06
                                     KWHK-FM         C2       432        5.5       103.9 MHz    02-01-06

Columbia, SC.......................  *WTCB-FM        C1       240       100.0      106.7 MHz    12-01-03
                                     *WOMG-FM         A        94        6.0       103.1 MHz    12-01-03
                                     *WLXC-FM         A       100        6.0        98.5 MHz    12-01-03
                                     *WISW-AM         B        NA      5.0/2.5      1320 kHz    12-01-03

Colorado Springs, CO...............  KKFM-FM          C       698       71.0        98.1 MHz    04-01-05
                                     KKMG-FM          C       695       57.0        98.9 MHz    04-01-05
                                     KSPZ-FM          C       649       72.0        92.9 MHz    04-01-05
                                     KVOR-AM          B        NA      5.0/1.0      1300 kHz    04-01-05
                                     KTWK-AM          B        NA      3.3/1.5       740 kHz    04-01-05

Johnson City/Kingsport/Bristol,
  TN...............................  *WQUT-FM         C       457       99.0       101.5 MHz    08-01-04
                                     *WKOS-FM         A       150       2.75       104.9 MHz    08-01-04
                                     *WJCW-AM         B        NA      5.0/1.0       910 kHz    08-01-04
                                     *WKIN-AM         B        NA     5.0/0.50      1320 kHz    08-01-04
                                     *WGOC-AM         B        NA     10.0/0.81      640 kHz    08-01-04

Lafayette, LA......................  KFXZ-FM          A       151        2.6       106.3 MHz    06-01-04
                                     KNEK-FM         C3       100       25.0       104.7 MHz    06-01-04
                                     KNEK-AM          B        NA       0.25        1190 kHz    06-01-04
                                     KRRQ-FM         C2       135       50.0        95.5 MHz    06-01-04
                                     *KSMB-FM         C       329       100.0       94.5 MHz    06-01-04
                                     *KDYS-AM         B        NA     10.0/0.5      1520 kHz    06-01-04
                                     *KVOL-FM         A       132        3.4       105.9 MHz    06-01-04
                                     *KVOL-AM         B        NA      5.0/1.0      1330 kHz    06-01-04

Chattanooga, TN....................  *WSKZ-FM         C       329       100.0      106.5 MHz    08-01-04
                                     *WOGT-FM        C3       295       2.85       107.9 MHz    08-01-04
                                     *WGOW-AM         B        NA      5.0/1.0      1150 kHz    08-01-04
                                     *WGOW-FM         A        87        6.0       102.3 MHz    08-01-04
</TABLE>

                                       16
<PAGE>   17

<TABLE>
<CAPTION>
                                                                                               EXPIRATION
                                                             HAAT                               DATE OF
                                                     FCC      IN      POWER IN                    FCC
MARKET                                 STATION      CLASS   METERS    KILOWATTS    FREQUENCY    LICENSE
------                               ------------   -----   ------   -----------   ---------   ----------
<S>                                  <C>            <C>     <C>      <C>           <C>         <C>
Charleston, SC.....................  WSSX-FM          C       317       100.0       95.1 MHz    12-01-03
                                     WWWZ-FM         C2       150       50.0        93.3 MHz    12-01-03
                                     WMGL-FM         C3     128.9        6.5       101.7 MHz    12-01-03
                                     WSUY-FM          C     539.5       100.0       96.9 MHz    12-01-03
                                     WNKT-FM          C     299.9       100.0      107.5 MHz    12-01-03
                                     WTMA-AM          B        NA      5.0/1.0      1250 kHz    12-01-03
                                     WTMZ-AM          B        NA       0.50         910 kHz    12-01-03
                                     WXTC-AM          B        NA        5.0        1390 kHz    12-01-03

Worcester, MA......................  WXLO-FM          B       172       37.0       104.5 MHz    04-01-06
                                     *WORC-FM (3)     A       125       1.85        98.9 MHz    04-01-06
                                     *WWFX-FM         A       146       2.85       100.1 MHz    04-01-06
                                     *WCAT-FM         A       124       1.85        99.9 MHz    04-01-06
                                     *WCAT-AM         D        NA        2.5         700 kHz    04-01-06

Lansing/East Lansing, MI...........  *WMMQ-FM         B       150       50.0        94.9 MHz    10-01-04
                                     *WJIM-FM         B       156       45.0        97.5 MHz    10-01-04
                                     *WFMK-FM         B       183       28.0        99.1 MHz    10-01-04
                                     *WITL-FM         B       196       26.5       100.7 MHz    10-01-04
                                     *WVFN-AM         D        NA     0.50/0.05      730 kHz    10-01-04
                                     *WJIM-AM         C        NA       0.89        1240 kHz    10-01-04

Flint, MI..........................  *WFBE-FM         B       150       50.0        95.1 MHz    10-01-04

Portsmouth/Dover/Rochester, NH.....  WOKQ-FM          B       150       50.0        97.5 MHz    04-01-06
                                     WXBB-FM          A     113.1        2.2       105.3 MHz    04-01-06
                                     WXBP-FM          A       100        3.0       102.1 MHz    04-01-06
                                     WPKQ-FM          C      1181    H22.5/V17.5   103.7 MHz    04-01-06

Modesto, CA........................  KANM-AM          B        NA        1.0         970 kHz    12-01-05
                                     KATM-FM          B       152       50.0       103.3 MHz    12-01-05
                                     KHKK-FM          B       152       50.0       104.1 MHz    12-01-05
                                     KDJK-FM          A       624       0.071      103.9 MHz    12-01-05
                                     KHOP-FM          B       193       29.5        95.1 MHz    12-01-05

Saginaw/Bay City/Midland, MI(4)....  WKQZ-FM         C2       169       39.2        93.3 MHz    10-01-04
                                     WYLZ-FM          A       151        2.6       100.9 MHz    10-01-04
                                     WIOG-FM          B       244        86        102.5 MHz    10-01-04
                                     WILZ-FM          A       126        2.9       104.5 MHz    10-01-04
                                     WGER-FM          A       116       2.05       106.3 MHz    10-01-04
                                     WSGW-AM          B        NA      5.0/1.0       790 kHz    10-01-04
                                     *WHNN-FM         C       311       100.0       96.1 MHz    10-01-04
                                     *WTCF-FM         A       100        3.0       100.5 MHz    10-01-04

Boise, ID..........................  KIZN-FM          C       762       44.0        92.3 MHz    10-01-05
                                     KZMG-FM          C       802       50.0        93.1 MHz    10-01-05
                                     KKGL-FM          C       768       44.0        96.9 MHz    10-01-05
                                     KQFC-FM          C       762       47.0        97.9 MHz    10-01-05
                                     KBOI-AM          B        NA       50.0         960 kHz    10-01-05

Reno, NV...........................  KKOH-AM          B        NA       50.0         780 kHz    10-01-05
                                     KNEV-FM          C       695       60.0        95.5 MHz    10-01-05
                                     KBUL-FM          C       699       72.0        98.1 MHz    10-01-05
                                     KNHK-FM          C       809       44.7        92.9 MHz    10-01-05
                                     KATG-FM (5)      A       129        3.6        93.7 MHz    10-01-05
</TABLE>

                                       17
<PAGE>   18

<TABLE>
<CAPTION>
                                                                                               EXPIRATION
                                                             HAAT                               DATE OF
                                                     FCC      IN      POWER IN                    FCC
MARKET                                 STATION      CLASS   METERS    KILOWATTS    FREQUENCY    LICENSE
------                               ------------   -----   ------   -----------   ---------   ----------
<S>                                  <C>            <C>     <C>      <C>           <C>         <C>
Atlantic City/Cape May, NJ.........  *WFPG-AM         C        NA        1.0        1450 kHz    06-01-06
                                     *WFPG-FM         B       110       50.0        96.9 MHz    06-01-06
                                     *WPUR-FM        B1       137       13.5       107.3 MHz    06-01-06
                                     *WKOE-FM (6)     A        94        3.0       106.3 MHz    06-01-06

Tyler/Longview, TX.................  *KDOK-FM        C3       135        9.6        92.1 MHz    08-01-05
                                     *KTBB-AM         B        NA      5.0/2.5       600 kHz    08-01-05
                                     *KEES-AM         B        NA      5.0/1.0      1430 kHz    08-01-05
                                     *KYZS-AM         C        NA        1.0        1490 kHz    08-01-05
                                     *KGLD-AM         D        NA     1.0/0.077     1330 kHz    08-01-05

Portland, ME.......................  WBLM-FM          C       436       100.0      102.9 MHz    04-01-06
                                     WCYI-FM          B     195.1       27.5        93.9 MHz    04-01-06
                                     WCYY-FM         B1       147       11.5        94.3 MHz    04-01-06
                                     WHOM-FM          C     1140.9      50.0        94.9 MHz    04-01-06
                                     WJBQ-FM          B     271.3       16.0        97.9 MHz    04-01-06
                                     WTPN-FM          B     121.9       47.5        98.9 MHz    04-01-06

New London, CT.....................  *WQGN-FM         A        84        3.0       105.5 MHz    04-01-06
                                     *WSUB-AM         D        NA     1.0/0.072      980 kHz    04-01-06
                                     *WVVE-FM         A       100        3.0       102.3 MHz    04-01-06

New Bedford/Fall River, MA.........  *WFHN-FM         A       106        2.4       107.1 MHz    04-01-06
                                     *WBSM-AM         B        NA      5.0/1.0      1420 kHz    04-01-06

Binghamton, NY.....................  WHWK-FM          B     292.6       10.0        98.1 MHz    06-01-06
                                     WYOS-FM (7)      A       254       0.93       104.1 MHz    11-26-96
                                     WAAL-FM          B       332        7.1        99.1 MHz    06-01-06
                                     WNBF-AM          B        NA        5.0        1290 kHz    06-01-06
                                     *WINR-AM         B        NA      1.0/0.5       680 kHz    06-01-06

Bloomington, IL....................  *WJBC-AM         C        NA        1.0        1230 kHz    12-01-04
                                     *WBNQ-FM         B       142       50.0       101.5 MHz    12-01-04
                                     *WBWN-FM        B1       100       25.0       104.1 MHz    12-01-04

Monroe, LA.........................  *KMYY-FM         C       310       97.0       106.1 MHz    06-01-04
                                     *KYEA-FM        C3       106       22.0       103.1 MHz    06-01-04
                                     *KZRZ-FM        C2       150       50.0        98.3 MHz    06-01-04
                                     *KTJC-FM        C3       148       11.5        92.3 MHz    06-01-04

Augusta/Waterville, ME.............  *WMME-FM         B       152       50.0        92.3 MHz    04-01-06
                                     *WEZW-AM         C        NA        1.0        1400 kHz    04-01-06
                                     *WEBB-FM        C1        93       61.0        98.5 MHz    04-01-06
                                     *WTVL-AM         C        NA        1.0        1490 kHz    04-01-06

Ithaca, NY.........................  *WIII-FM         B       223       23.5        99.9 MHz    06-01-06
                                     *WKRT-AM         B        NA     1.0/0.50       920 kHz    06-01-06

Presque Isle, ME...................  *WBPW-FM        C1       134       100.0       96.9 MHz    04-01-06
                                     *WOZI-FM        C2       368        7.9       101.9 MHz    04-01-06
                                     *WQHR-FM         C       390       95.0        96.1 MHz    04-01-06

Dennysville/Calais, ME.............  *WCRQ-FM        C1       139       100.0      102.9 MHz    04-01-06
</TABLE>

                                       18
<PAGE>   19

<TABLE>
<CAPTION>
                                                                                               EXPIRATION
                                                             HAAT                               DATE OF
                                                     FCC      IN      POWER IN                    FCC
MARKET                                 STATION      CLASS   METERS    KILOWATTS    FREQUENCY    LICENSE
------                               ------------   -----   ------   -----------   ---------   ----------
<S>                                  <C>            <C>     <C>      <C>           <C>         <C>
Muncie, IN.........................  WMDH-FM          B     152.4       50.0       102.5 MHz    08-01-04
                                     WMDH-AM          B        NA       0.25        1550 kHz    08-01-04

Kokomo, IN.........................  WWKI-FM          B     143.3       50.0       100.5 MHz    08-01-04
</TABLE>

---------------
(1) Pending its acquisition, we currently operate KWUN-AM under a local
    marketing agreement.

(2) The stations indicated do not include one FM radio station in Niagara Falls,
    Ontario for which we expect to sell advertising in the United States under a
    joint sales agreement.

(3) Pending its acquisition, we currently operate WORC-FM under a local
    marketing agreement.

(4) We may agree to sell one or more of the indicated stations serving
    Saginaw/Bay City/Midland in connection with our pending acquisition of
    stations serving Saginaw/Bay City/Midland.

(5) We operate KATG-FM under a local marketing agreement.

(6) We expect to operate WKOE-FM under a program service and time brokerage
    agreement.

(7) WYOS-FM in Binghamton operates pursuant to a construction permit. An
    application for a license to cover the construction permit has been filed
    with the FCC. Expiration of the construction permit is stayed during the
    pendency of that application.

     OWNERSHIP MATTERS. The Communications Act prohibits the assignment of a
broadcast license or the transfer of control of a broadcast license without the
prior approval of the FCC. In determining whether to assign, transfer, grant or
renew a broadcast license, the FCC considers a number of factors pertaining to
the licensee, including compliance with various rules limiting common ownership
of media properties, the character of the licensee and those persons holding
attributable interests therein, and compliance with the Communications Act's
limitation on alien ownership, as well as compliance with other FCC policies.

     Once a station purchase agreement has been signed, an application for FCC
consent to assignment of license or transfer of control, depending upon whether
the underlying transaction is an asset purchase or stock acquisition, is filed
with the FCC. Approximately 10 to 15 days after this filing, the FCC normally
publishes a notice assigning a file number to the application and advising that
the application has been accepted for filing. The FCC has recently instituted an
informal policy of inviting public comment on any proposed radio transaction
that would result in one broadcaster controlling at least half of all radio
advertising revenue in a market, or two broadcasters controlling 70% or more of
market revenue. This policy has resulted in delays in the FCC's acceptance of
applications for filing, and in subsequent action on assignment and transfer
applications. Notice of acceptance of an application begins a 30-day statutory
waiting period, which provides the opportunity for third parties to file formal
petitions to deny the transaction. Informal objections may be filed any time
prior to grant of an application. The FCC staff will normally review the
application in this period and seek further information and amendments to the
application if it has questions.

     Once the 30-day public notice period ends, the staff will complete its
processing, assuming that no petitions or informal objections were received and
that the application is otherwise consistent with FCC rules and policies. The
staff often grants the application by delegated authority approximately 10 to 20
days after the public notice period ends. At this point, the parties are legally
authorized to close the purchase, although the FCC action is not legally a final
order. If there is a backlog of applications, the processing period can extend
to 30 days or more.

     Public notice of the FCC staff grant is usually issued about a week after
the grant is made, stating that the grant was effective when made by the staff.
On the date of this notice, another 30-day period begins, within which time
interested parties can file petitions seeking either staff reconsideration or
full FCC review of the staff action. During this time the grant can still be
modified, set aside or stayed, and is not a final order. In the absence of a
stay, however, the seller and buyer are not prevented from closing despite the
absence of a final order. Also, within 40 days after the public notice of the
grant, the full FCC can review and reconsider the staff's grant on its own
motion. Thus, during the additional 10 days beyond the 30-day period available
to third parties, the grant is

                                       19
<PAGE>   20

still not final. In the event that review by the full FCC is requested and the
FCC subsequently affirms the staff's grant of the application, interested
parties may thereafter seek judicial review in the United States Court of
Appeals for the District of Columbia Circuit within 30 days of public notice of
the full FCC's action. In the event the Court affirms the FCC's action, further
judicial review may be sought by seeking rehearing en banc from the Court of
Appeals or by certiorari from the United States Supreme Court.

     In the absence of the submission of a timely request for reconsideration,
administrative review or judicial review, the FCC staff's grant of an
application becomes final by operation of law. Upon the occurrence of that
event, the FCC's grant is generally no longer subject to administrative or
judicial review, although such action can nevertheless be set aside in rare
circumstances, such as fraud on the agency by a party to the application.

     The pendency of a license renewal application can alter the timetables
mentioned above because the FCC normally will not issue an unconditional
assignment grant if the station's license renewal is pending.

     Under the Communications Act, a broadcast license may not be granted to or
held by a corporation that has more than one-fifth of its capital stock owned or
voted by aliens or their representatives, by foreign governments or their
representatives, or by non-U.S. corporations. Under the Communications Act, a
broadcast license also may not be granted to or held by any corporation that is
controlled, directly or indirectly, by any other corporation more than
one-fourth of whose capital stock is owned or voted by aliens or their
representatives, by foreign governments or their representatives, or by non-U.S.
corporations. These restrictions apply in modified form to other forms of
business organizations, including partnerships. Each of Citadel Communications
and Citadel Broadcasting therefore may be restricted from having more than
one-fourth of its stock owned or voted by aliens, foreign governments or
non-U.S. corporations. The Certificate of Incorporation of Citadel
Communications and the Certificate of Incorporation of Citadel Broadcasting
contain provisions which permit Citadel Communications and Citadel Broadcasting
to prohibit alien ownership and control consistent with the prohibitions
contained in the Communications Act.

     The Communications Act and FCC rules also generally restrict the common
ownership, operation or control of radio broadcast stations serving the same
local market, and place numerical limits on common ownership of radio and
television broadcast stations serving the same local market, and of a radio
broadcast station and a daily newspaper serving the same local market. Under
these cross-ownership rules, neither Citadel Communications nor Citadel
Broadcasting would be permitted to acquire any daily newspaper where it then
owned any radio broadcast station. While common ownership of same market radio
and television stations was previously permissible only through waiver of the
FCC's rules, the FCC recently liberalized its radio/television cross ownership
rule to provide for common ownership, operation or control of one television and
up to seven same-market radio stations, or two television and up to six
same-market radio stations, if the market has at least twenty separately owned
broadcast, newspaper and cable "voices." Common ownership of two television and
four radio stations is permissible when ten voices remain, and of one television
and one radio station regardless of voice count.

     In response to the Telecommunications Act, the FCC amended its multiple
ownership rules to eliminate the national limits on ownership of AM and FM
stations. The FCC's broadcast multiple ownership rules restrict the number of
radio stations one person or entity may own, operate or control on a local
level. These limits are:

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

     - In a market with more than 29 but less than 45 commercial radio stations,
       an entity may own up to seven commercial radio stations, not more than
       four of which are in the same service,

     - In a market with more than 14 but less than 30 commercial radio stations,
       an entity may own up to six commercial radio stations, not more than four
       of which are in the same service, and

     - In a market with 14 or fewer commercial radio stations, an entity may own
       up to five commercial radio stations, not more than three of which are in
       the same service, except that an entity may not own more than 50% of the
       stations in such market.

                                       20
<PAGE>   21

     None of these multiple ownership rules requires any change in our current
ownership of radio broadcast stations. However, these rules will limit the
number of additional stations which we may acquire in the future in certain of
our markets.

     Because of these multiple and cross-ownership rules, a purchaser of voting
stock of either Citadel Communications or Citadel Broadcasting which acquires an
attributable interest in Citadel Communications or Citadel Broadcasting may
violate the FCC's rule if it also has an attributable interest in other
television or radio stations, or in daily newspapers, depending on the number
and location of those radio or television stations or daily newspapers. Such a
purchaser also may be restricted in the companies in which it may invest, to the
extent that these investments give rise to an attributable interest. If an
attributable shareholder of Citadel Communications or Citadel Broadcasting
violates any of these ownership rules, Citadel Communications or Citadel
Broadcasting may be unable to obtain from the FCC one or more authorizations
needed to conduct its radio station business and may be unable to obtain FCC
consents for particular future acquisitions.

     The FCC generally applies its television/radio/newspaper cross-ownership
rules and its broadcast multiple ownership rules by considering the
attributable, or cognizable, interests held by a person or entity. A person or
entity can have an interest in a radio station, television station or daily
newspaper by being an officer, director, partner or shareholder of a company
that owns that station or newspaper. Whether that interest is cognizable under
the FCC's ownership rules is determined by the FCC's attribution rules. If an
interest is attributable, the FCC treats the person or entity who holds that
interest as the owner of the radio station, television station or daily
newspaper in question, and therefore subject to the FCC's ownership rules.

     With respect to a corporation, officers and directors and persons or
entities that directly or indirectly can vote 5% or more of the corporation's
stock, or 20% or more of the corporation's stock in the case of insurance
companies, investment companies, bank trust departments and certain other
passive investors that hold the stock for investment purposes only, generally
are attributed with ownership of whatever radio stations, television stations
and daily newspapers the corporation owns.

     With respect to a partnership, the interest of a general partner is
attributable, as is the interest of any limited partner who is materially
involved in the media-related activities of the partnership. Debt instruments,
nonvoting stock, options and warrants for voting stock that have not yet been
exercised, limited partnership interests where the limited partner is not
materially involved in the media-related activities of the partnership, and
minority (under 5%) voting stock, generally do not subject their holders to
attribution.

     The FCC recently revised its attribution rules to eliminate its
cross-interest policy, which generally precluded a party with an attributable
interest in one media outlet from also holding certain significant but
nonattributable interests in another same-market media entity, such as a joint
venture or key employee relationship. In its place, the FCC has adopted a new
class of attributable interests under the "equity/debt plus" rule. Under this
standard, an interest in excess of 33% of a licensee's total asset value (equity
plus debt) will be attributable if the interest holder is either a major program
supplier (providing over 15% of a station's total weekly broadcast programming
hours) or a same-market media company (including broadcasters, cable operators
and newspapers).

     The FCC has also been more aggressive in examining issues of market revenue
share concentration when considering radio station acquisitions. The FCC has
delayed its approval of several pending radio station purchases by various
parties because of market concentration concerns. Moreover, the FCC has recently
followed an informal policy of giving specific public notice of its intention to
conduct additional ownership concentration analyses and soliciting public
comment on the issue of concentration and its effect on competition and
diversity in connection with applications for consent to radio station
acquisitions, where the proposed transaction would result in one broadcaster
controlling at least half of all radio advertising revenue in a market, or two
broadcasters controlling 70% or more of market revenue. This policy has resulted
in significant delays in action on FCC assignment and transfer applications and
has the potential to result in an attempt by the FCC to set applications for
hearing, prevent completion of transactions or negotiate modifications to the
proposed terms. For a discussion of the effects of this policy on some of our
pending transactions, see the discussion above under the heading "Pending
Transactions."

                                       21
<PAGE>   22

     PROGRAMMING AND OPERATION. The Communications Act requires broadcasters to
serve the public interest. Licensees are required to present programming that is
responsive to community problems, needs and interests and to maintain records
demonstrating such responsiveness. Complaints from listeners concerning a
station's programming will be considered by the FCC when it evaluates the
licensee's renewal application, but such complaints may be filed and considered
at any time.

     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 and
technical operations, including limits on radio frequency radiation. In
addition, licensees must develop and implement programs designed to promote
equal employment opportunities and must submit reports to the FCC on these
matters annually and in connection with a renewal application. The broadcast of
contests and lotteries also is regulated by FCC rules.

     Failure to observe these or other rules and policies can result in the
imposition of various sanctions, including monetary forfeitures, the grant of
short (less than the maximum) renewal terms or, for particularly egregious
violations, the denial of a license renewal application or the revocation of a
license.

     In 1985, the FCC adopted rules regarding human exposures to levels of radio
frequency radiation. These rules require applicants for new broadcast stations,
renewals of broadcast licenses or modifications of existing licenses to inform
the FCC at the time of filing such applications whether a new or existing
broadcast facility would expose people to radio frequency radiation in excess of
FCC guidelines. In 1997, the FCC imposed more restrictive radiation limits. We
anticipate that such regulations will not have a material effect on our
business.

     LOCAL MARKETING AGREEMENTS. Over the past several years, a number of radio
stations, including several of our stations, have entered into what commonly are
referred to as local marketing agreements or time brokerage agreements. These
agreements take various forms. Separately-owned and licensed stations may agree
to function cooperatively in terms of 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 station maintains
independent control over the programming and other operations of its own
station. The FCC has held that such agreements do not violate the Communications
Act as long as the licensee of the station that is being substantially
programmed by another entity maintains complete responsibility for, and control
over, operations of its broadcast stations and otherwise ensures compliance with
applicable FCC rules and policies. Presently, we operate only three stations
under local marketing agreements, and two are being so operated pending our
acquisition of the stations. We expect that we will begin operating one
additional station under a local marketing agreement if we complete a particular
pending acquisition.

     A station that brokers substantial time on another station in its market or
engages in a local marketing agreement with a station in the same market will be
considered to have an attributable ownership interest in the brokered station
for purposes of the FCC's ownership rules discussed above under the heading
"Ownership Matters." As a result, a broadcast station may not enter into a local
marketing agreement that allows it to program more than 15% of the broadcast
time, on a weekly basis, of another local station that it could not own under
the FCC's local multiple ownership rules. FCC rules also prohibit the broadcast
licensee from simulcasting more than 25% of its programming on another station
in the same broadcast service (that is, AM-AM or FM-FM) where the two stations
serve substantially the same geographic area, whether the licensee owns the
stations or owns one and programs the other through a local marketing agreement
arrangement.

     Another example of a cooperative agreement between separately owned radio
stations in the same market is a joint sales agreement, whereby one station
sells advertising time in combination, both on itself and on a station under
separate ownership. In the past, the FCC has determined that issues of joint
advertising sales should be left to antitrust enforcement. Currently, joint
sales agreements are not considered by the FCC to be attributable, but copies of
such agreements must be filed with the FCC.

     PROPOSED CHANGES. Congress and the FCC from time to time have under
consideration, 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

                                       22
<PAGE>   23

audience share and advertising revenue for our radio stations, and affect our
ability to acquire additional radio stations or finance such acquisitions. Such
matters include:

     - proposals to impose spectrum use or other fees on FCC licensees, the
       FCC's equal employment opportunity rules and matters relating to
       political broadcasting,

     - technical and frequency allocation matters,

     - proposals to restrict or prohibit the advertising of beer, wine and other
       alcoholic beverages on radio,

     - changes in the FCC's multiple ownership and cross-ownership policies,

     - changes to broadcast technical requirements,

     - proposals to allow telephone or cable television companies to deliver
       audio and video programming to the home through existing phone or other
       communication lines, and

     - proposals to limit the tax deductibility of advertising expenses by
       advertisers.

     In January 1995, the FCC adopted rules to allocate spectrum for satellite
digital audio radio service. Satellite digital audio radio service systems
potentially could provide for regional or nationwide distribution of radio
programming with fidelity comparable to compact discs. The FCC has issued two
authorizations to launch and operate satellite digital audio radio service. The
FCC also has undertaken an inquiry into the terrestrial broadcast of digital
audio radio service signals, addressing, among other things, the need for
spectrum outside the existing FM band and the role of existing broadcasters.

     The FCC has adopted rules to license new 100 watt and 10 watt low-power FM
radio stations. These stations would have a service radius of approximately one
to three miles. This licensing process commenced in March 2000. The FCC has
authorized an additional 100 kHz of bandwidth for the AM band and on March 17,
1997, adopted an allotment plan for the expanded band which identified the 88 AM
radio stations selected to move into the band. At the end of a five-year
transition period, those licensees will be required to return to the FCC either
the license for their existing AM band station or the license for the expanded
AM band station.

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

     The foregoing is a brief summary of certain provisions of the
Communications Act and of specific FCC rules and policies. This description does
not purport to be comprehensive and reference should be made to the
Communications Act, the FCC's rules and the public notices and rulings of the
FCC for further information concerning the nature and extent of federal
regulation of radio broadcast stations.

     FEDERAL ANTITRUST CONSIDERATIONS. The Federal Trade Commission and the
United States Department of Justice, which evaluate transactions to determine
whether those transactions should be challenged under the federal antitrust
laws, have been increasingly active recently in their review of radio station
acquisitions, particularly where an operator proposes to acquire additional
stations in its existing markets.

     For an acquisition meeting certain size thresholds, the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules promulgated
thereunder, require the parties to file Notification and Report Forms with the
Federal Trade Commission and the Department of Justice and to observe specified
waiting period requirements before consummating the acquisition. During the
initial 30-day period after the filing, the agencies decide which of them will
investigate the transaction. If the investigating agency determines that the
transaction does not raise significant antitrust issues, then it will either
terminate the waiting period or allow it to expire after the initial 30 days. On
the other hand, if the agency determines that the transaction requires a more
detailed investigation, then, at the conclusion of the initial 30-day period, it
will issue a formal request for additional information. The issuance of a formal
request extends the waiting period until the 20th calendar day after the date of
substantial compliance by all parties to the acquisition. Thereafter, such
waiting period may only be extended by court order or with the consent of the
parties. In practice, complying with a formal request can take a significant
amount of time. In addition, if the investigating agency raises substantive
issues in connection with a

                                       23
<PAGE>   24

proposed transaction, then the parties frequently engage in lengthy discussions
or negotiations with the investigating agency concerning possible means of
addressing those issues, including but not limited to persuading the agency that
the proposed acquisition would not violate the antitrust laws, restructuring the
proposed acquisition, divestiture of other assets of one or more parties, or
abandonment of the transaction. Such discussions and negotiations can be time
consuming, and the parties may agree to delay completion of the acquisition
during their pendency.

     At any time before or after the completion of a proposed acquisition, the
Federal Trade Commission or the Department of Justice could take such action
under the antitrust laws as it considers necessary or desirable in the public
interest, including seeking to enjoin the acquisition or seeking divestiture of
the business acquired or other assets we own. Acquisitions that are not required
to be reported under the Hart-Scott-Rodino Act may be investigated by the
Federal Trade Commission or the Department of Justice under the antitrust laws
before or after completion. In addition, private parties may under certain
circumstances bring legal action to challenge an acquisition under the antitrust
laws.

     We received early termination of the applicable waiting period under the
Hart-Scott-Rodino Act for the pending acquisition of Bloomington Broadcasting
Holdings, Inc. and the pending acquisition of radio stations from Broadcasting
Partners Holdings, L.P. We are awaiting termination of the applicable waiting
period for the pending acquisition of stations in Michigan from Liggett
Broadcast, Inc. and certain of its affiliates. In February 2000, we received a
request for additional information and documents from the Department of Justice
relating to stations in Saginaw/Bay City/Midland, Michigan. As discussed above,
this request extends the waiting period under the Hart-Scott-Rodino Act for a
period of 20 days after receipt by the Department of Justice of the information
and documents requested from all parties from whom such information and
documents have been requested.

     As part of its increased scrutiny of radio station acquisitions, the
Department of Justice has stated publicly that it believes that commencement of
operations under local marketing agreements, joint sales agreements and other
similar agreements customarily entered into in connection with radio station
transfers prior to the expiration of the waiting period under the
Hart-Scott-Rodino Act could violate the Hart-Scott-Rodino Act. In connection
with acquisitions subject to the waiting period under the Hart-Scott-Rodino Act,
we will not commence operation of any affected station to be acquired under a
local marketing agreement or similar agreement until the waiting period has
expired or been terminated.

     We received a civil investigative demand from the Antitrust Division of the
Department of Justice addressing our acquisition of KRST-FM in Albuquerque, New
Mexico. This matter remains open. See the discussion below under the heading
"Risk Factors" and in Item 3, Legal Proceedings.

TRADEMARKS

     We own a number of trademarks and service marks, including the federally
registered marks Cat Country, Supertalk and the Cat Country logo. We also own a
number of marks registered in various states. We consider such trademarks and
service marks to be important to our business. See the discussion above under
the heading "Operating Strategy" and the subheading "Targeted Programming."

SEASONALITY

     Our revenue varies throughout the year. As is typical in the radio
broadcasting industry, the first calendar quarter generally produces the lowest
revenue, and the fourth quarter generally produces the highest revenue.

ENVIRONMENTAL MATTERS

     As the owner, lessee or operator of various real properties and facilities,
we are subject to various federal, state and local environmental laws and
regulations. Historically, compliance with these laws and regulations has not
had a material adverse effect on our business. There can be no assurance,
however, that compliance with existing or new environmental laws and regulations
will not require us to make significant expenditures of funds.

                                       24
<PAGE>   25

EMPLOYEES

     At March 1, 2000, we employed approximately 1,970 persons. None of these
employees are covered by collective bargaining agreements, and we consider our
relations with our employees to be good.

     We employ several on-air personalities with large loyal audiences in their
respective markets. We generally enter into employment agreements with these
personalities to protect our interests in those relationships that we believe to
be valuable. The loss of one of these personalities could result in a short-term
loss of audience share, but we do not believe that any such loss would have a
material adverse effect on our financial condition or results of operations.

RISK FACTORS

     Any of the following risks could have a material adverse effect on our
business, financial condition or results of operations. These risks and
uncertainties are not the only ones facing us or which may adversely affect our
business.

     SUBSTANTIAL INDEBTEDNESS--OUR DEBT SERVICE CONSUMES A SUBSTANTIAL PORTION
     OF THE CASH WE GENERATE AND REDUCES THE CASH AVAILABLE TO INVEST IN OUR
     OPERATIONS.

     We have a significant amount of indebtedness. Our large amount of debt
could significantly impact our business because, among other things, it:

     - requires us to dedicate a substantial portion of our operating cash flow
       to pay interest expense, which reduces funds available for operations,
       future business opportunities and other purposes,

     - limits our ability to obtain additional financing, if we need it, for
       working capital, capital expenditures, acquisitions, debt service
       requirements or other purposes,

     - inhibits our ability to compete with competitors who are less leveraged
       than we are, and

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

     As of December 31, 1999, we had:

     - outstanding total debt of approximately $356.9 million, excluding the
       discount on our 10 1/4% Senior Subordinated Notes due 2007 and our 9 1/4%
       Senior Subordinated Notes due 2008,

     - 13 1/4% Exchangeable Preferred Stock with an aggregate liquidation
       preference of approximately $85.4 million, and

     - shareholders' equity of approximately $219.2 million.

     For more information about our indebtedness, see Item 7, Management's
Discussion and Analysis of Financial Condition and Results of Operations, under
the heading "Liquidity and Capital Resources."

     ABILITY TO SERVICE DEBT--IN ORDER TO SERVICE OUR DEBT, WE REQUIRE A
     SIGNIFICANT AMOUNT OF CASH. HOWEVER, OUR ABILITY TO GENERATE CASH DEPENDS
     ON MANY FACTORS WHICH ARE BEYOND OUR CONTROL.

     Prevailing economic conditions and financial, business and other factors,
many of which are beyond our control, will affect our ability to satisfy our
debt obligations. If in the future we cannot generate sufficient cash flow from
operations to meet our obligations, we may need to refinance our debt, obtain
additional financing, delay planned acquisitions and capital expenditures or
sell assets. Any of these actions could adversely affect the value of our common
stock. We cannot assure you that we will generate sufficient cash flow or be
able to obtain sufficient funding to satisfy our debt service requirements.

     RESTRICTIONS IMPOSED ON US BY OUR DEBT INSTRUMENTS--OUR EXISTING DEBT
     INSTRUMENTS CONTAIN RESTRICTIONS AND LIMITATIONS WHICH COULD SIGNIFICANTLY
     IMPACT OUR ABILITY TO OPERATE OUR BUSINESS.

     The covenants in our credit facility and the agreements governing our other
outstanding debt and preferred stock restrict, among other things, our ability
to incur additional debt, make particular types of investments or
                                       25
<PAGE>   26

other restricted payments, swap or sell assets or merge or consolidate. A breach
of any of the covenants contained in the credit facility could allow the lenders
to declare all amounts outstanding under the credit facility to be immediately
due and payable. In addition, the lenders under the credit facility could
proceed against the collateral granted to them to secure that indebtedness.
Citadel Communications has pledged the outstanding shares of our common stock
owned by it to secure its guarantee of the credit facility. If the amounts
outstanding under the credit facility are accelerated, we cannot assure you that
our assets will be sufficient to repay amounts due under the credit facility and
other outstanding debt obligations.

     The credit facility requires us to obtain our banks' consent before making
capital expenditures that exceed the amount permitted by the credit facility and
before making acquisitions that do not meet applicable tests under the credit
facility. The credit facility also requires us to maintain specific financial
ratios and satisfy financial condition tests. Events beyond our control could
affect our ability to meet those financial ratios and condition tests, and we
cannot assure you that we will do so.

     The indentures governing our 9 1/4% notes and 10 1/4% notes and our credit
facility restrict, with certain exceptions, our ability to pay dividends on or
to repurchase, redeem or otherwise acquire any shares of our capital stock. In
the event that, after July 1, 2002, cash dividends on our exchangeable preferred
stock are in arrears and unpaid for two or more semi-annual dividend periods,
whether or not consecutive, holders of the exchangeable preferred stock will be
entitled to elect two directors of Citadel Broadcasting.

     For more information about our indebtedness, see Item 7, Management's
Discussion and Analysis of Financial Condition and Results of Operations, under
the heading "Liquidity and Capital Resources."

     HISTORY OF NET LOSSES--WE HAVE A HISTORY OF NET LOSSES WHICH WE EXPECT TO
     CONTINUE THROUGH AT LEAST 2000.

     We had a net loss of $8.9 million and $3.9 million for the years ended
December 31, 1999 and 1998, respectively. The primary reasons for these losses
are significant charges for depreciation and amortization relating to the
acquisition of radio stations and interest charges on our outstanding debt. If
we acquire additional stations, these charges will probably increase. We expect
to continue to experience net losses through at least 2000.

     LIMITATIONS ON ACQUISITION STRATEGY--OUR STRATEGY TO EXPAND OUR BUSINESS
     AND INCREASE REVENUE THROUGH ACQUISITIONS MAY FAIL DUE TO A NUMBER OF RISKS
     INVOLVED IN IMPLEMENTING THIS STRATEGY.

     We intend to grow by acquiring radio stations in mid-sized markets.
However, our acquisition strategy may not increase our cash flow or yield other
anticipated benefits because this strategy is subject to a number of other
risks, including:

     - failure or unanticipated delays in completing acquisitions due to
       difficulties in obtaining regulatory approval,

     - failure of certain of our acquisitions to prove profitable or for the
       station or stations acquired to generate cash flow,

     - difficulty in integrating the operations, systems and management of our
       acquired stations,

     - diversion of management's attention from other business concerns,

     - loss of key employees of acquired stations,

     - increases in prices for radio stations due to increased competition for
       acquisition opportunities, and

     - inability to obtain any required financing for acquisitions on terms
       favorable to us or at all.

     We compete and expect to continue to compete with other buyers for the
acquisition of radio stations. Some of those competitors have greater financial
and other resources than we do. We may also find fewer acceptable acquisition
opportunities in the future.

                                       26
<PAGE>   27

     In addition, our credit facility permits us to make acquisitions of radio
stations without the consent of our banks under the credit facility only if we
maintain the financial ratios and financial condition tests specified in the
credit facility. Consequently, we may experience difficulties in pursuing our
acquisition strategy.

     POTENTIAL DIFFICULTIES IN COMPLETING PENDING AND FUTURE TRANSACTIONS DUE TO
     GOVERNMENTAL REVIEW--ANTITRUST LAW AND OTHER REGULATORY CONSIDERATIONS
     COULD PREVENT OR DELAY OUR STRATEGY TO EXPAND OUR BUSINESS AND INCREASE
     REVENUE.

     The completion of several of our pending transactions is, and future
transactions we may consider will likely be, subject to the notification filing
requirements, applicable waiting periods and possible review by the United
States Department of Justice or the Federal Trade Commission under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. All of our
pending and future radio station acquisitions and dispositions will be subject
to the license transfer approval process of the Federal Communications
Commission. Review by the Department of Justice or the Federal Trade Commission
may cause delays in completing transactions and, in some cases, result in
attempts by these agencies to prevent completion of transactions or negotiate
modifications to the proposed terms. Review by the FCC, particularly review of
concentration of market revenue share, may also cause delays in completing
transactions. Any delay, prohibition or modification could adversely affect the
terms of a proposed transaction or could require us to abandon an otherwise
attractive opportunity.

     For a discussion of the delays we are experiencing in connection with some
of our pending acquisitions because of Department of Justice review and the
FCC's license transfer approval process, see "Pending Transactions" above.

     IMPORTANCE OF CERTAIN MARKETS--A DOWNTURN IN ANY OF OUR KEY MARKETS COULD
     ADVERSELY AFFECT OUR REVENUE AND CASH FLOW.

     Our Albuquerque, Providence, Salt Lake City, Little Rock, Modesto and
Colorado Springs markets are particularly important for our financial
well-being. A significant decline in net broadcasting revenue from our stations
in these markets could have a material adverse effect on our operations and
financial condition. To illustrate, our radio stations in these markets
generated the following percentages of our total net broadcasting revenue and
broadcast cash flow in 1999:

<TABLE>
<CAPTION>
           MARKET             % OF NET BROADCASTING REVENUE    % OF BROADCAST CASH FLOW
           ------             -----------------------------    ------------------------
<S>                           <C>                              <C>
Albuquerque.................              11.0%                          11.8%
Providence..................               9.9                            9.2
Salt Lake City..............               9.2                            8.0
Little Rock.................               6.1                            4.6
Modesto.....................               5.8                            8.3
Colorado Springs............               5.7                            7.3
</TABLE>

     In 1996, we received a civil investigative demand from the Department of
Justice concerning our acquisition of all of the assets of KRST-FM in
Albuquerque, New Mexico on October 9, 1996. The demand requested written answers
to interrogatories and the production of documents concerning the radio station
market in Albuquerque, in general, and the KRST acquisition, in particular, to
enable the Department of Justice to determine, among other things, whether the
KRST acquisition would result in excessive concentration in the market. We
responded to the demand. The Department of Justice requested supplemental
information in 1997, to which we also responded. This matter remains open. If
the Department of Justice were to proceed with and successfully challenge the
KRST acquisition, we may be required to divest one or more radio stations in
Albuquerque. See Item 3, Legal Proceedings.

     SIGNIFICANT COMPETITION IN OUR INDUSTRY--BECAUSE THE RADIO BROADCASTING
     INDUSTRY IS HIGHLY COMPETITIVE, WE MAY LOSE AUDIENCE SHARE AND ADVERTISING
     REVENUE.

     Our radio stations face heavy competition from other radio stations in each
market for audience share and advertising revenue. We also compete with other
media such as television, newspapers, direct mail and outdoor advertising for
advertising revenue. A decrease in either audience share or advertising revenue
could result in
                                       27
<PAGE>   28

decreased cash flow, which could impair our ability to, among other things,
service our debt obligations. The radio broadcasting industry is also facing
competition from new media technologies that are being developed such as the
following:

     - audio programming by cable television systems, direct broadcasting
       satellite systems and other digital audio broadcasting formats,

     - satellite-delivered digital audio radio service, which could result in
       the introduction of several new satellite radio services with sound
       quality equivalent to that of compact discs, and

     - in-band-on-channel digital radio, which could provide digital radio
       services in the same frequency range currently occupied by traditional AM
       and FM radio services.

     We cannot predict either the extent to which such competition will
materialize or, if such competition materializes, the extent of its effect on
our business. The Internet has also created a new form of competition.

     EXTENSIVE REGULATION OF OUR INDUSTRY--THE FEDERAL COMMUNICATIONS
     COMMISSION'S EXTENSIVE REGULATION OF THE RADIO BROADCASTING INDUSTRY LIMITS
     OUR ABILITY TO OWN AND OPERATE RADIO STATIONS AND OTHER MEDIA OUTLETS.

     LICENSES. The radio broadcasting industry is subject to extensive
regulation by the FCC under the Communications Act of 1934, as amended.
Issuance, renewal or transfer of radio broadcast station operating licenses
requires FCC approval, and we cannot operate our radio stations without FCC
licenses. The failure to renew our licenses could prevent us from operating the
affected stations and generating revenue from them. If the FCC decides to
include conditions or qualifications in any of our licenses, we may be limited
in the manner in which we may operate the affected station.

     For a discussion of radio licensing, see the discussion above in this Item
1 under the heading "Federal Regulation of Radio Broadcasting" and the
subheading "License Grant and Renewal."

     OWNERSHIP. The Communications Act and FCC rules impose specific limits on
the number of stations and other media outlets an entity can own in a single
market. The FCC attributes interests held by, among others, an entity's
officers, directors and stockholders to that entity for purposes of applying
these ownership limitations. The existing ownership rules or proposed new rules
could affect our acquisition strategy because they may prevent us from acquiring
additional stations in a particular market. We may also be prevented from
engaging in a swap transaction if the swap would cause the other company to
violate these rules.

     For a more detailed discussion of these ownership limitations and their
impact on our business, see the discussion above in this Item 1 under the
heading "Federal Regulation of Radio Broadcasting" and the subheading "Ownership
Matters."

ITEM 2.  PROPERTIES

     The types of properties required to support each of our radio stations
include offices, studios, transmitter sites and antenna sites. A station's
studios are generally housed with its offices in business districts. The
transmitter sites and antenna sites are generally located so as to provide
maximum market coverage.

     We currently own studio facilities and transmitter and antenna sites in
various locations. We expect to acquire additional real estate in connection
with our pending acquisitions. We lease our remaining studio and office
facilities, including office space in Las Vegas, Nevada and Wexford,
Pennsylvania which is not related to the operations of a particular station, and
we lease our remaining transmitter and antenna sites. We do not anticipate any
difficulties in renewing any facility leases or in leasing alternative or
additional space, if required. We own substantially all of our other equipment,
consisting principally of transmitting antennae, transmitters, studio equipment
and general office equipment.

     No one property is material to our operations. We believe that our
properties are generally in good condition and suitable for our operations.
Nonetheless, we continually look for opportunities to upgrade our properties and
intend to upgrade studios, office space and transmission facilities in several
markets.

                                       28
<PAGE>   29

     Substantially all of our properties and equipment serve as collateral for
our obligations under our credit facility. See Item 7, Management's Discussion
and Analysis of Financial Condition and Results of Operations, under the heading
"Liquidity and Capital Resources."

ITEM 3.  LEGAL PROCEEDINGS

     We currently and from time to time are involved in litigation incidental to
the conduct of our business, but we are not a party to any lawsuit or proceeding
which, in our opinion, is likely to have a material adverse effect on us.

     We received civil investigative demands from the Department of Justice
pursuant to which the Department of Justice requested information from us to
determine whether we violated particular antitrust laws. One investigative
demand was issued on September 27, 1996 and concerns our acquisition of all of
the assets of KRST-FM in Albuquerque, New Mexico on October 9, 1996. The demand
requested written answers to interrogatories and the production of documents
concerning the radio station market in Albuquerque, in general, and the KRST
acquisition, in particular, to enable the Department of Justice to determine,
among other things, whether the KRST acquisition would result in excessive
concentration in the market. We responded to the demand. The Department of
Justice requested supplemental information on January 27, 1997, to which we also
responded. This matter remains open. If the Department of Justice were to
proceed with and successfully challenge the KRST acquisition, we may be required
to divest one or more radio stations in Albuquerque.

ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

     No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.

                                    PART II

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

     The only outstanding common equity of Citadel Broadcasting is its common
stock, par value $.001 per share. There is no established trading market for our
common stock. All shares of our common stock which are currently issued and
outstanding are owned by our parent, Citadel Communications.

     We have never declared or paid any cash dividends on our common stock. The
terms of the various documents governing our indebtedness and our exchangeable
preferred stock impose significant restrictions on the payment of dividends on
our common stock. See Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations.

ITEM 6.  SELECTED FINANCIAL DATA.

     The selected consolidated historical financial data presented below as of
and for each of the years ended December 31, 1995, 1996, 1997, 1998 and 1999 are
derived from the consolidated financial statements of Citadel Broadcasting.
These consolidated financial statements have been audited by KPMG LLP,
independent certified public accountants. Our consolidated financial statements
as of December 31, 1998 and 1999 and for each of the years in the three-year
period ended December 31, 1999 and the independent auditors' report on those
consolidated financial statements, are included elsewhere in this report. Our
financial results are not comparable from year to year because of the
acquisition and disposition of various radio stations. As you review the
information contained in the following table, you should note the following:

      --  Interest Expense. Interest expense includes debt issuance costs and
          debt discount amortization of approximately $132,000, $163,000,
          $441,000, $717,000 and $1,849,000 for the years ended December 31,
          1995, 1996, 1997, 1998 and 1999, respectively.

      --  Extraordinary Loss. On October 9, 1996, we repaid our long-term debt
          of $31.3 million, payable to a financial institution, and a note
          payable to a related party of $7.0 million. The early retirement of
          the

                                       29
<PAGE>   30

          long-term debt resulted in a $1.8 million extraordinary loss due to
          prepayment premiums and the write-off of debt issuance costs.

      --  Cash Dividends. We have never declared cash dividends on our common
          stock.

      --  Income (Loss) From Discontinued Operations, Net of Tax. In December
          1999, we decided to discontinue the operations of our internet service
          provider. The discontinued operations, net of tax have been separately
          identified for all years in which we operated the internet service
          provider.

      --  Net Loss Per Common Share. Basic and diluted net loss per common share
          are the same for all periods presented due to our net losses.

      --  Other Income, Net. Other income includes gain/(loss) on sales of radio
          stations and property and equipment of approximately $707,000,
          $(2,000), $0, $1,045,000 and $(1,208,000) for the years ended December
          31, 1995, 1996, 1997, 1998 and 1999, respectively.

     The selected consolidated historical financial data below should be read in
conjunction with, and is qualified by reference to, Citadel Broadcasting's
Consolidated Financial Statements and Notes thereto and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
elsewhere in this report.

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                       -----------------------------------------------------------
                                         1995        1996        1997         1998         1999
                                       ---------   ---------   ---------   ----------   ----------
                                       (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)
<S>                                    <C>         <C>         <C>         <C>          <C>
STATEMENT OF OPERATIONS
DATA:
Net broadcasting revenue.............  $  34,112   $  45,413   $  89,249   $  133,312   $  178,495
Station operating expenses...........     26,832      33,232      64,764       91,845      115,312
Depreciation and amortization........      4,891       5,158      14,460       25,970       35,749
Corporate general and
  administrative.....................      2,274       3,248       3,530        4,295        7,010
Non-cash deferred compensation.......         --          --          --           74        1,727
                                       ---------   ---------   ---------   ----------   ----------
Operating income.....................        115       3,775       6,495       11,128       18,697
Interest expense.....................      5,242       6,155      12,304       18,126       25,385
Other income, net....................        781         414         450        1,651          388
                                       ---------   ---------   ---------   ----------   ----------
Loss before income taxes,
  extraordinary item and discontinued
  operations.........................     (4,346)     (1,966)     (5,359)      (5,347)      (6,300)
Income tax benefit...................         --          --        (770)      (1,395)      (1,647)
                                       ---------   ---------   ---------   ----------   ----------
Loss before extraordinary item and
  discontinued operations............     (4,346)     (1,966)     (4,589)      (3,952)      (4,653)
Extraordinary loss...................         --      (1,769)         --           --           --
Income (loss) from discontinued
  operations, net of tax.............         --          --        (102)          21       (4,275)
                                       ---------   ---------   ---------   ----------   ----------
Net loss.............................  $  (4,346)  $  (3,735)  $  (4,691)  $   (3,931)  $   (8,928)
Dividend requirement for exchangeable
  preferred stock....................         --          --       6,633       14,586       14,103
                                       ---------   ---------   ---------   ----------   ----------
Net loss applicable to common
  shares.............................  $  (4,346)  $  (3,735)  $ (11,324)  $  (18,517)  $  (23,031)
                                       =========   =========   =========   ==========   ==========
Basic and diluted net loss per common
  share..............................  $    (109)  $     (93)  $    (283)  $     (463)  $     (541)
Weighted average common shares
  outstanding........................     40,000      40,000      40,000       40,000       42,589
</TABLE>

                                       30
<PAGE>   31

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                           ---------------------------------------------------
                                            1995       1996       1997       1998       1999
                                           -------   --------   --------   --------   --------
                                                         (DOLLARS IN THOUSANDS)
<S>                                        <C>       <C>        <C>        <C>        <C>
BALANCE SHEET DATA:
Cash and cash equivalents................  $ 1,005   $  1,588   $  7,685   $102,655   $ 17,981
Working capital (deficiency).............    2,928     (4,195)    22,593    153,000     54,777
Intangible assets, net...................   15,093     51,802    268,690    266,446    538,664
Total assets.............................   37,372    102,244    344,172    471,768    716,613
Long-term debt (including current
  portion)...............................   43,046     91,072    189,699    211,299    345,867
Exchangeable preferred stock.............       --         --    102,010    116,775     85,362
Shareholders' equity (deficit)...........   (9,249)     5,999     16,132    103,963    219,209
</TABLE>

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

GENERAL

     Citadel Broadcasting Company was formed August 21, 1991 as a Nevada
corporation. Citadel License, Inc. was a wholly owned subsidiary of Citadel
Broadcasting Company. On December 28, 1999, Citadel License was merged into
Citadel Broadcasting. Citadel Broadcasting owns and operates radio stations and
holds FCC licenses in Arkansas, California, Colorado, Idaho, Indiana, Louisiana,
Maine, Massachusetts, Michigan, Nevada, New Hampshire, New Mexico, New York,
Oklahoma, Pennsylvania, Rhode Island, South Carolina, Utah and Washington.

     In addition, Citadel Broadcasting owns and operates an internet service
provider, offering its subscribers a variety of services, including electronic
mail and access to the internet. In December 1999, Citadel Broadcasting decided
to discontinue its internet service operations.

     General economic conditions have an impact on our business and financial
results. From time to time the markets in which we operate experience weak
economic conditions that may negatively affect our revenue. However, we believe
that this impact is somewhat mitigated by our diverse geographical presence. In
addition, our financial results are also dependent on a number of factors,
including the general strength of the local and national economies, population
growth, the ability to provide popular programming, local market and regional
competition, relative efficiency of radio broadcasting compared to other
advertising media, signal strength and government regulation and policies.

     In the following analysis, we discuss our broadcast cash flow. The
performance of a radio station group is customarily measured by its ability to
generate broadcast cash flow. The two components of broadcast cash flow are
gross revenue, net of agency commissions, and operating expenses, excluding
depreciation and amortization, corporate general and administrative expenses and
non-cash and non-recurring charges. Broadcast cash flow assists in comparing
performance on a consistent basis across companies without regard to
depreciation and amortization, which can vary significantly depending on
accounting methods, particularly when acquisitions are involved. Earnings before
interest, taxes, depreciation and amortization, or EBITDA, consist of operating
income (loss) before depreciation and amortization. Although broadcast cash flow
and EBITDA are not measures of performance calculated in accordance with
generally accepted accounting principles, we believe that they are useful to an
investor in evaluating our company because they are measures widely used in the
broadcasting industry to evaluate a radio company's operating performance.
However, broadcast cash flow and EBITDA should not be considered in isolation or
as substitutes for net income, cash flows from operating activities and other
income or cash flow statement data prepared in accordance with generally
accepted accounting principles as a measure of liquidity or profitability.

     The principal source of our revenue is the sale of broadcasting time on our
radio stations for advertising. As a result, our revenue is affected primarily
by the advertising rates our radio stations charge. Correspondingly, the rates
are based upon a station's ability to attract audiences in the demographic
groups targeted by its advertisers, as measured principally by periodic Arbitron
Radio Market Reports. The number of advertisements that can be broadcast without
jeopardizing listening levels, and the resulting ratings, is limited in part by
the format of a particular station. Each of our stations has a general
pre-determined level of on-air inventory that it makes available for
advertising, which may be different at different times of the day and tends to
remain stable over

                                       31
<PAGE>   32

time. Much of our selling activity is based on demand for our radio stations'
on-air inventory and, in general, we respond to this demand by varying prices
rather than by changing the available inventory.

     In the broadcasting industry, radio stations often utilize trade or barter
agreements to exchange advertising time for goods or services, such as other
media advertising, travel or lodging, in lieu of cash. In order to preserve most
of our on-air inventory for cash advertising, we generally enter into trade
agreements only if the goods or services bartered to us will be used in our
business. We have generally sold over 90% of our advertising time for cash,
although this percentage may fluctuate by quarter. In addition, it is our
general policy not to preempt advertising announcements paid for in cash with
advertising announcements paid for in trade. We include trade or barter amounts
in our net broadcasting revenue.

     Our revenue varies throughout the year. As is typical in the radio
broadcasting industry, the first calendar quarter generally produces the lowest
revenue, and the fourth quarter generally produces the highest revenue.

     The primary operating expenses incurred in the ownership and operation of
radio stations include employee salaries and commissions, programming expenses
and advertising and promotional expenses. We strive to control these expenses by
working closely with local station management. We also incur, and will continue
to incur, significant depreciation, amortization and interest expense as a
result of completed and anticipated future acquisitions of stations, and
existing and future borrowings.

     In December 1999, we decided to discontinue the operations of our internet
service provider. As a result of this decision, we have adopted a plan for the
disposition by sale of the internet service provider. This plan includes the
sale of subscribers and all related internet equipment. We are currently in
negotiations with other internet service providers and anticipate finalizing the
sale by the end of the second quarter of 2000. However, there can be no
assurance that the sale will be completed as anticipated.

     Our internet service provider recorded gross revenue and net income (loss)
of $4.5 million and $(4.3) million, respectively, for the year ended December
31, 1999 and $2.1 million and $0.02 million, respectively, for the year ended
December 31, 1998. The operations of the internet service provider have been
segregated and presented as discontinued operations, net of tax, in the
consolidated financial statements. The net loss for 1999 from discontinued
operations includes an estimate of operational losses for 2000 of approximately
$0.6 million.

     In 1999, our radio stations derived approximately 81% of their net
broadcasting revenue from local and regional advertising in the markets in which
they operate, and the remainder resulted principally from the sale of national
advertising. Local and regional advertising is sold primarily by each station's
sales staff. To generate national advertising sales, we engage a national
advertising representative firm. We believe that the volume of national
advertising revenue tends to adjust to shifts in a station's audience share
position more rapidly than does the volume of local and regional advertising
revenue. Therefore, we focus on sales of local and regional advertising. During
the year ended December 31, 1999 and 1998, no single advertiser accounted for
more than 10% of our net broadcasting revenue.

     Our advertising revenue is typically collected within 120 days of the date
on which the related advertisement is aired. Most accrued expenses, however, are
paid within 45 to 60 days. As a result of this time lag, working capital
requirements have increased as we have grown and will likely increase in the
future.

     Historically, we have generated net losses primarily as a result of
significant charges for depreciation and amortization relating to the
acquisition of radio stations and interest charges on outstanding debt. We
amortize FCC licenses and goodwill attributable to the acquisition of radio
stations over a 15-year period. Based upon the large number of acquisitions that
were consummated within the last two years, we anticipate that depreciation and
amortization charges will continue to be significant for several years. To the
extent that we complete additional acquisitions, our depreciation and
amortization charges are likely to increase. We expect that we will continue to
incur net losses through at least 2000.

     We consolidate the operations of stations operated under local marketing
agreements. The Emerging Issues Task Force is reviewing the accounting method
for contractual management arrangements and may determine that consolidation is
appropriate only if certain requirements for controlling financial interest are
met. Because the provisions of our existing local marketing agreement do not
meet the proposed control requirements, if the

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Emerging Issues Task Force proposal is approved as drafted, consolidation of the
station operated under the local marketing agreement may no longer be
appropriate.

RESULTS OF OPERATIONS

     Our consolidated financial statements tend not to be directly comparable
from period to period due to acquisition activity. Our acquisitions during the
year ended December 31, 1999 and 1998, all of which have been accounted for
using the purchase method of accounting, and the results of operations of which
have been included since the date of acquisition, were as follows:

     1998 Acquisitions and Dispositions. WEMR-AM and WEMR-FM in
Wilkes-Barre/Scranton, Pennsylvania were acquired on January 2, 1998. KQFC-FM,
KKGL-FM and KBOI-AM in Boise, Idaho were acquired on February 12, 1998. WCTP-FM,
WCTD-FM and WKJN-AM in Wilkes-Barre/Scranton, Pennsylvania were acquired on
March 26, 1998. KIZN-FM and KZMG-FM in Boise, Idaho were acquired on April 21,
1998. On July 7, 1998, we sold WEST-AM in Allentown, Pennsylvania, in connection
with a prior acquisition. We also sold all of our stations in the Quincy,
Illinois market on October 7, 1998. KAAY-AM in Little Rock, Arkansas was
acquired on November 17, 1998. In conjunction with this acquisition, we sold
KRNN-AM in Little Rock, Arkansas. Digital Planet, L.C., Internet Technology
Systems, Inc., In Quo, The Johnson Connection, LLC and the Friendly Net, LLC,
all in Salt Lake City, Utah, were acquired on September 18, 1998, September 29,
1998, October 15, 1998, October 26, 1998 and December 8, 1998, respectively.

     1999 Acquisitions and Dispositions. WBHT-FM in Wilkes-Barre/Scranton,
Pennsylvania was acquired on January 4, 1999. Prior to the acquisition, we had
operated WBHT-FM under a local marketing agreement since July 3, 1997. On
February 9, 1999 we acquired the assets of 62nd Street Broadcasting of Saginaw,
LLC. The acquisition of these assets included five FM radio stations and one AM
radio station in Saginaw/Bay City, Michigan. WHYL-AM/FM in Carlisle,
Pennsylvania were acquired on February 17, 1999. On March 17, 1999, we acquired
all of the outstanding shares of capital stock of Citywide Communications, Inc.
and all of the outstanding warrants to acquire shares of capital stock of
Citywide. In connection with the acquisition, we acquired six FM and three AM
radio stations in the Baton Rouge and Lafayette, Louisiana markets. On April 30,
1999, we purchased KVOR-AM and KTWK-AM in Colorado Springs, Colorado and
KEYF-AM/FM in Spokane, Washington. In addition, we exchanged KKLI-FM for KSPZ-FM
in Colorado Springs. On May 3, 1999, we acquired WKQV-FM in
Wilkes-Barre/Scranton, Pennsylvania and KWHK-FM in Spokane. On June 30, 1999, we
acquired substantially all of the assets of Wicks Broadcast Group Limited
Partnership and related entities. The acquisition of these assets included ten
FM and six AM radio stations serving the Charleston, South Carolina; Binghamton,
New York; Muncie, Indiana and Kokomo, Indiana markets. On August 31, 1999, we
acquired all of the outstanding shares of capital stock of Fuller-Jeffrey
Broadcasting Companies, Inc. In connection with the acquisition, we acquired ten
FM radio stations in Portsmouth, New Hampshire and Portland, Maine. On November
1, 1999 we acquired KOOJ-FM in Baton Rouge, Louisiana and on November 9, 1999,
we sold substantially all of the assets of our 18 FM and seven AM radio stations
in Eugene and Medford, Oregon; Tri-Cities, Washington; Billings, Montana; and
Johnstown and State College, Pennsylvania. On December 23, 1999, we acquired
four FM radio stations and one AM radio station in Oklahoma City, Oklahoma.
Brainiac Services, Inc., an internet service provider in Riverside, Rhode
Island, was acquired on March 1, 1999.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

     Net Broadcasting Revenue. Net broadcasting revenue increased $45.2 million
or 33.9% to $178.5 million for the year ended December 31, 1999 from $133.3
million for the year ended December 31, 1998, primarily due to the inclusion of
revenue from the acquisition of radio stations acquired in 1999. Barter revenue,
which is included in net broadcasting revenue, increased $7.3 million to $18.3
million for the year ended December 31, 1999 from $11.0 million for the year
ended December 31, 1998. For stations owned and operated over the comparable
period in 1999 and 1998, net broadcasting revenue improved $18.0 million or
15.9% to $131.1 million in 1999 from $113.1 million in 1998, primarily due to
increased ratings and improved selling efforts.

     Station Operating Expenses. Station operating expenses increased $23.5
million or 25.6% to $115.3 million for the year ended December 31, 1999 from
$91.8 million for the year ended December 31, 1998. Barter

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<PAGE>   34

expenses, which are included in station operating expenses, increased $2.2
million to $11.7 million for the year ended December 31, 1999 from $9.5 million
for the year ended December 31, 1998. The increase in station operating expenses
was primarily attributable to the inclusion of station operating expenses of the
radio station acquisitions completed in 1999.

     Broadcast Cash Flow. As a result of the factors described above, broadcast
cash flow increased $21.7 million or 52.3% to $63.2 million for the year ended
December 31, 1999 from $41.5 million for the year ended December 31, 1998. For
stations owned and operated over the comparable periods in 1999 and 1998,
broadcast cash flow increased $9.8 million or 25.9% to $47.6 million in 1999
from $37.8 million in 1998. As a percentage of net broadcasting revenue,
broadcast cash flow improved to 35.4% for the year ended December 31, 1999
compared to 31.1% for the year ended December 31, 1998.

     Corporate General and Administrative Expenses (Includes Non-Cash Deferred
Compensation). Corporate general and administrative expenses increased $4.3
million or 97.7% to $8.7 million for the year ended December 31, 1999 from $4.4
million for the year ended December 31, 1998. The increase was due primarily to
a $1.7 million increase in non-cash deferred compensation related to stock
options as well as an increase in staffing levels and associated costs needed to
support our growth, increased professional fees and expenses due to public
company reporting requirements and costs incurred in unsuccessful acquisitions.

     EBITDA. As a result of the factors described above, EBITDA increased $17.3
million or 46.6% to $54.4 million for the year ended December 31, 1999 from
$37.1 million for the year ended December 31, 1998.

     Depreciation and Amortization. Depreciation and amortization expense
increased $9.8 million or 37.7% to $35.8 million for the year ended December 31,
1999 from $26.0 million for the year ended December 31, 1998, primarily due to
radio station acquisitions completed during 1999.

     Interest Expense. Interest expense increased approximately $7.3 million or
40.3% to $25.4 million for the year ended December 31, 1999 from $18.1 million
for the year ended December 31, 1998, primarily due to interest expense
associated with our 9 1/4% Senior Subordinated Notes issued on November 19,
1998.

     Loss (Gain) on Sale of Assets. The loss on sale of assets in 1999 of $1.2
million resulted primarily from the loss on the sale of 25 radio stations in six
markets in November 1999 and the loss on the sale of certain real estate of
approximately $.9 million and $.3 million, respectively. The gain on sale of
assets in 1998 resulted primarily from the gain on the sale of four radio
stations in Quincy, Illinois aggregating approximately $1.3 million, offset by
certain other dispositions of assets resulting in losses.

     Income Tax Benefit. The income tax benefit in 1999 and 1998 represents the
reversal of deferred tax liabilities established at the date of acquisition due
to differences in the tax bases and the financial statement carrying amounts of
intangibles and fixed assets acquired in stock-based acquisitions, offset by
federal alternative minimum tax and state tax expense. The increase in the net
tax benefit of $.3 million when comparing the year ended December 31, 1999 to
1998 is due to the stock acquisitions completed in 1999 offset by increased
federal alternative minimum tax and state tax expense.

     Income (Loss) From Discontinued Operations, Net of Tax. The increase in
losses from discontinued operations of $4.3 million when comparing the year
ended December 31, 1999 to 1998 is primarily due to increased local and long
distance telephone charges, losses from customer accounts, sales and technical
outsourcing costs and estimated operating losses of approximately $.6 million to
be incurred in the year 2000 until the subscribers and equipment are sold and
the operations are discontinued.

     Net Loss. Net loss increased $5.0 million or 128.2% to $8.9 million for the
year ended December 31, 1999 from $3.9 million for the year ended December 31,
1998. This increase in loss is primarily due to the increase in loss from
discontinued operations of $4.3 million.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

     Net Broadcasting Revenue. Net broadcasting revenue increased $44.1 million
or 49.4% to $133.3 million for the year ended December 31, 1998 from $89.2
million for the year ended December 31, 1997. The inclusion of revenue from the
acquisitions of radio stations and revenue generated from local marketing
agreements entered
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<PAGE>   35

into during 1998 provided $6.3 million of the increase. Barter revenue, which is
included in net broadcasting revenue, increased $3.6 million to $11.0 million
for the year ended December 31, 1998 from $7.4 million for the year ended
December 31, 1997. For stations owned and operated over the comparable periods
in 1998 and 1997, net broadcasting revenue improved $39.3 million or 64.3% to
$100.4 million in 1998 from $61.1 million in 1997, primarily due to increased
ratings and improved selling efforts.

     Station Operating Expenses. Station operating expenses increased $27.0
million or 41.7% to $91.8 million for the year ended December 31, 1998 from
$64.8 million for the year ended December 31, 1997. Barter expenses, which are
included in station operating expenses, increased $2.4 million to $9.5 million
for the year ended December 31, 1998 from $7.1 million for the year ended
December 31, 1997. The increase in station operating expenses was primarily
attributable to the inclusion of station operating expenses of the radio station
acquisitions and the local marketing agreements entered into during 1998.

     Broadcast Cash Flow. As a result of the factors described above, broadcast
cash flow increased $17.0 million or 69.4% to $41.5 million for the year ended
December 31, 1998 from $24.5 million for the year ended December 31, 1997. As a
percentage of net broadcasting revenue, broadcast cash flow improved to 31.1%
for the year ended December 31, 1998 compared to 27.5% for the year ended
December 31, 1997.

     Corporate General and Administrative Expenses (Includes Non-cash Deferred
Compensation). Corporate general and administrative expenses increased $0.9
million or 25.7% to $4.4 million for the year ended December 31, 1998 from $3.5
million for the year ended December 31, 1997. The increase was due primarily to
an increase in staffing levels needed to support our growth.

     EBITDA. As a result of the factors described above, EBITDA increased $16.1
million or 76.7% to $37.1 million for the year ended December 31, 1998 from
$21.0 million for the year ended December 31, 1997.

     Depreciation and Amortization. Depreciation and amortization expense
increased $11.5 million or 79.3% to $26.0 million for the year ended December
31, 1998 from $14.5 million for the year ended December 31, 1997, primarily due
to radio station acquisitions completed during 1998 and late 1997.

     Interest Expense. Interest expense increased approximately $5.8 million or
47.2% to $18.1 million for the year ended December 31, 1998 from $12.3 million
for the year ended December 31, 1997, primarily due to interest expense
associated with additional borrowings completed in 1998 and 1997, offset by a
repayment of the borrowings in the third quarter of 1998 from the net proceeds
of Citadel Communications' initial public offering of its common stock in July
1998.

     Loss (Gain) on Sale of Assets. The gain on sale of assets in 1998 resulted
primarily from the gain on the sale of four radio stations in Quincy, Illinois
aggregating approximately $1.3 million, offset by certain other dispositions of
assets resulting in losses.

     Income Tax Benefit. The income tax benefit in 1998 and 1997 represents the
reversal of deferred tax liabilities established at the date of acquisition due
to differences in the tax bases and the financial statement carrying amounts of
intangibles and fixed assets acquired in stock-based acquisitions, offset by
federal alternative minimum tax and state tax expense in 1998. For the year
ended December 31, 1997, we generated a net loss for both financial reporting
and income tax purposes; therefore, no current tax provision was recorded.

     Net Loss. As a result of the factors described above, net loss decreased
$1.4 million or 26.4% to $3.9 million for the year ended December 31, 1998 from
$5.3 million for the year ended December 31, 1997.

LIQUIDITY AND CAPITAL RESOURCES

     Overview. Recent liquidity needs have been driven by our acquisition
strategy. Our principal liquidity requirements are for acquisition financing,
debt service, working capital and general and corporate purposes, including
capital expenditures. Our acquisition strategy has required, and is expected to
continue in the foreseeable future to require, a significant portion of our
capital resources. We expect that our debt service within the next twelve
months, without regard to future acquisitions, will be approximately $30.8
million, including approximately $21.0 million for interest on our 10 1/4%
Senior Subordinated Notes due 2007 and 9 1/4% Senior Subordinated Notes due 2008
and approximately $9.8 million for interest on our credit facility. Our 13 1/4%
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<PAGE>   36

Exchangeable Preferred Stock does not require cash dividends through July 1,
2002. We redeemed approximately 35% of the exchangeable preferred stock in
August of 1999.

     Citadel Broadcasting and Citadel Communications have financed our past
acquisitions through bank borrowings, sales of equity and debt securities,
internally generated funds and proceeds from asset sales. We expect that
financing for future acquisitions will be provided from the same sources.

     An important factor in management financing decisions is the maintenance of
leverage ratios consistent with our long-term growth strategy. We recognize that
we may require additional resources or may need to consider modifications to our
expansion plans. To the extent we are unable to obtain additional funding, as
needed, we have contingency plans, which include curtailing capital expenditure
activities, and reducing infrastructure costs associated with expansion and
development plans. No assurance can be given that we will be successful in
raising additional capital, as needed, achieving profitable results or entering
into new markets.

     At December 31, 1999, we held approximately $17.9 million in cash and cash
equivalents and had approximately $247.6 million in unborrowed availability
under our credit facility. This unborrowed availability has been reduced for
outstanding letters of credit of approximately $20.4 million at December 31,
1999.

     Net Cash Provided by Operating Activities. For the twelve months ended
December 31, 1999, net cash provided by operating activities increased $1.4
million to $15.4 million from $14.0 million in 1998. This increase is primarily
due to the operating activities of the stations acquired in 1999, offset by the
operating activities of the discontinued operations.

     Net Cash Used in Investing Activities. For the twelve months ended December
31, 1999, net cash used in investing activities, primarily for station
acquisitions, increased $272.0 million to $318.4 million from $46.4 million in
1998. The increase is primarily due to the acquisition of 57 radio stations in
1999, whereas 11 radio stations were acquired in 1998.

     Net Cash Provided by Financing Activities. For the twelve months ended
December 31, 1999, net cash provided by financing activities increased $91.0
million to $218.4 million compared to $127.4 million in 1998. This increase is
primarily the result of Citadel Communications' stock offering completed on June
25, 1999 and additional borrowings of $132.0 million under the credit facility
offset by the partial redemption of exchangeable preferred stock of
approximately $51.7 million. Citadel Communications sold 5,000,000 shares of its
common stock at $29.25 per share in its June 1999 offering. The proceeds to
Citadel Communications from the offering, net of underwriting discounts and
commissions, were approximately $140.4 million. On the same date as the stock
offering, the net proceeds Citadel Communications received were transferred to
the equity of Citadel Broadcasting and used by us to redeem a portion of our
exchangeable preferred stock and to fund radio station acquisitions completed in
the second and third quarter of 1999.

     2000 Stock Offering. On February 11, 2000, Citadel Communications sold
4,750,000 shares of its common stock at $51.50 per share. The proceeds to
Citadel Communications from the offering, net of underwriting discounts and
commissions, were approximately $234.8 million. A portion of the proceeds was
used to repay a portion of the indebtedness under our credit facility and the
remainder will be used to fund our pending acquisitions. For further information
about our pending acquisitions, see the discussion below under the heading
"Pending Acquisitions and Recently Completed Transactions".

     Credit Facility. On July 3, 1997, we and our then subsidiary, Citadel
License, Inc., entered into an amended and restated financing agreement, which
originally allowed for revolving loan borrowings up to a maximum of $150.0
million. Pursuant to the agreement, this amount began to reduce quarterly on
December 31, 1997. On December 17, 1999, all amounts borrowed under this credit
facility were repaid. On December 28, 1999, Citadel License was merged into
Citadel Broadcasting.

     On December 17, 1999, we entered into a new credit facility with Credit
Suisse First Boston, as the lead arranger, administrative agent and collateral
agent, and the lenders named therein, which provides for the making to us by the
lenders of term loans at any time during the period from December 17, 1999 to
December 15, 2000, in an aggregate principal amount not in excess of $250.0
million and revolving loans at any time and from time to time prior to March 31,
2007 (subject to extension to December 31, 2007), in the aggregate principal
amount at

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any one time outstanding not in excess of $150.0 million. Of the $150.0 million
which is available in the form of revolving loans under the revolving credit
facility, until March 31, 2000, up to $75.0 million of the revolving credit
facility may be made available in the form of letters of credit, and after March
31, 2000, up to $50.0 million of the revolving credit facility may be made
available in the form of letters of credit. On February 10, 2000, the credit
facility was amended to increase the amount of the facility from $400.0 million
to $500.0 million. The $100.0 million increase was allocated $75.0 million to
the revolving loans and $25.0 million to the term loans. In addition, we may
request up to $300.0 million in additional term loans, which term loans may be
made at the sole discretion of the lenders. Of such additional $300.0 million
amount, at our request, up to $100.0 million may be in the form of an increase
in the $225.0 million revolving credit commitment. The lenders are under no
obligation to make such additional $300.0 million available, whether in the form
of term loans, revolving loans or otherwise. Amounts borrowed under the credit
facility bear interest at a rate equal to an applicable margin (described below)
plus either (a) the greater of the prime rate of interest announced from time to
time by Credit Suisse First Boston, New York, New York, and the federal funds
effective rate in effect from time to time plus 0.5%, or (b) if we so elect, the
LIBO rate divided by one minus the eurocurrency reserve requirements prescribed
by the Federal Reserve Board or other governmental body in effect from time to
time. The applicable margin is expected to range between 0% and 1.5% for the
rate discussed in clause (a) above and between 0.75% and 2.5% for the rate
discussed in clause (b) above. The interest rate of borrowings in December 1999
and January 2000 has ranged from 7.4% to 9.1%. Citadel Broadcasting and Citadel
Communications are currently in compliance in all material respects with the
terms of the credit facility.

     Draws may be made under the term loan facility solely to finance a portion
of the acquisitions we currently plan, to finance a portion of future permitted
acquisitions and to pay related fees and expenses. The amount of any term loans
outstanding on December 17, 2002 must be repaid in varying quarterly
installments ranging from 3.75% of the amount on March 31, 2003 to 6.25% of the
amount on March 31, 2007. In addition, mandatory prepayments must be made under
the term loan facility upon the happening of certain events.

     We used the proceeds of a $132.0 million revolving credit loan under the
credit facility to refinance our then existing $68.0 million of revolving credit
loans under our prior credit facility, to pay transaction expenses incurred in
connection with entry into the new credit facility and the refinancing of the
indebtedness under the prior credit facility and to fund radio stations acquired
in December 1999. Additional draws may be made under the revolving credit
facility, subject to the satisfaction of certain conditions, for general
corporate purposes, including for working capital, capital expenditures, and to
finance a portion of certain acquisitions contemplated by us and for future
permitted acquisitions by us. At December 31, 1999, we had approximately $247.6
million available for borrowing under the credit facility. The revolving credit
facility must be paid in full on or before March 31, 2007 (subject to extension
until December 31, 2007). In addition, mandatory prepayments must be made under
the revolving credit facility upon the happening of certain events.

     The letter of credit facility, which is a sub facility of the revolving
credit facility, provides for the issuance of letters of credit to be used by us
as security for our obligations under agreements entered into in connection with
certain radio station acquisitions and for any other purpose related to our
business.

     Subject to permitted liens, the credit facility is secured by: (a) a first
priority pledge on all of our capital stock other than our exchangeable
preferred stock, (b) a first priority security interest in all the existing and
after-acquired property of Citadel Communications and Citadel Broadcasting,
including, without limitation, accounts, machinery, equipment, inventory, real
estate, general intangibles and investment property and (c) all proceeds of the
foregoing. The credit facility is also guaranteed by Citadel Communications. The
credit facility contains customary events of default. Upon the occurrence of an
event of default, with certain limitations, our obligations under the credit
facility, which are at that time outstanding, may become accelerated.

     The credit facility contains customary restrictive covenants, which, among
other things, and with exceptions, limit our ability to incur additional
indebtedness and liens, enter into transactions with affiliates, make
acquisitions other than acquisitions permitted under the credit facility, pay
dividends, redeem or repurchase capital stock, enter into certain sale and
leaseback transactions, consolidate, merge or effect asset sales, issue
additional equity, make capital expenditures, make investments, loans or
prepayments or change the nature of their business. We are also required to
satisfy financial covenants which will require us to maintain specified

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<PAGE>   38

financial ratios and to comply with financial tests, including ratios with
respect to maximum leverage, minimum interest coverage and minimum fixed charge
coverage. At December 31, 1999, Citadel Communications and Citadel Broadcasting
were in compliance with all covenants under the credit facility.

     Maximum Leverage Test. The maximum leverage test requires that Citadel
Broadcasting and Citadel Communications not permit the ratio of their total debt
as of the last day of the most recently ended quarter to their consolidated
EBITDA, as adjusted for permitted acquisitions and dispositions, for the rolling
four-quarter period ending as of the last day of such quarter, to be greater
than the applicable ratio on that date. The applicable ratio through March 31,
2000 is 7.25x, and it will decline .25x for each quarter thereafter until it has
decreased to 4.00x where it will remain.

     Minimum Interest Coverage Test. The minimum interest coverage test requires
that Citadel Broadcasting and Citadel Communications not permit the ratio of
their consolidated EBITDA for any rolling four-quarter period to their
consolidated interest expense for such period, to be less than the applicable
ratio on that date. The applicable ratios range from 1.50x through December 31,
2000 to 2.50x beginning October 1, 2002.

     Minimum Fixed Charges Coverage Test. The minimum fixed charges coverage
test requires that Citadel Broadcasting and Citadel Communications not permit
the ratio of their consolidated EBITDA for any rolling four-quarter period to
their fixed charges for such period to be less than 1.25 to 1.00.

     Senior Subordinated Notes. On July 3, 1997, we completed the issuance of
$101.0 million of 10 1/4% Senior Subordinated Notes due 2007. Interest is
payable semi-annually. The 10 1/4% notes may be redeemed at our option, in whole
or in part, at any time on or after July 1, 2002 at the redemption prices set
forth in the indenture governing the 10 1/4% notes. In addition, at any time
prior to July 1, 2000, we may, at our option, redeem a portion of the 10 1/4%
notes with the net proceeds of one or more Public Equity Offerings (as defined
in the indenture governing the 10 1/4% notes), at a redemption price equal to
110.25% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the date of redemption.

     On November 19, 1998, we completed the issuance of $115.0 million of 9 1/4%
Senior Subordinated Notes due 2008. Interest is payable semi-annually. The
9 1/4% notes may be redeemed at our option, in whole or in part, at any time on
or after November 15, 2003 at the redemption prices set forth in the indenture
governing the 9 1/4% notes. In addition, at any time prior to November 15, 2001,
we may, at our option, redeem a portion of the 9 1/4% notes with the net
proceeds of one or more Public Equity Offerings (as defined in the indenture
governing the 9 1/4% notes), at a redemption price equal to 109.25% of the
principal amount thereof, together with accrued and unpaid interest, if any to
the date of redemption.

     The indentures governing the 10 1/4% notes and the 9 1/4% notes contain
certain restrictive covenants, including limitations which restrict our ability
to incur additional debt, incur liens, pay cash dividends, or make certain other
restricted payments, consummate certain asset sales, enter into certain
transactions with affiliates, merge or consolidate with any other person or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets. At December 31, 1999 we were in compliance with
all covenants under the indentures.

     Exchangeable Preferred Stock. On July 3, 1997, we sold an aggregate of
1,000,000 shares of our 13 1/4% Exchangeable Preferred Stock. Dividends on the
exchangeable preferred stock accrue at the rate of 13 1/4% per annum and are
payable semi-annually. On or prior to July 1, 2002, dividends are payable in
additional shares of exchangeable preferred stock having an aggregate
liquidation preference equal to the amount of such dividends, or, at our option,
in cash. Thereafter, all dividends will be payable only in cash. To date, we
have paid all dividends in additional shares of exchangeable preferred stock. We
will be required to redeem the exchangeable preferred stock on July 1, 2009,
subject to the legal availability of funds therefore, at a redemption price
equal to the liquidation preference thereof, plus accumulated and unpaid
dividends, if any, to the date of redemption.

     We may redeem the exchangeable preferred stock, in whole or in part, at our
option, at any time on or after July 1, 2002, at declining redemption prices
ranging from 107.729% to 101.104%, plus accumulated and unpaid dividends, if
any, to the date of redemption.

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<PAGE>   39

     On August 2, 1999, we redeemed approximately 35% of our issued and
outstanding exchangeable preferred stock. Total shares redeemed were
approximately 452,000 at a redemption price of $113.25 per share for a total of
approximately $51.2 million. In addition, we paid approximately $0.5 million of
accrued dividends on the redeemed shares. Proceeds from Citadel Communications'
additional equity investment in Citadel Broadcasting were utilized to complete
the redemption.

     The Certificate of Designation governing the exchangeable preferred stock
also contains covenants that restrict us from taking various actions, including,
subject to specified exceptions, the incurrence of additional indebtedness, the
granting of additional liens, the making of investments, the payment of
dividends and other restricted payments, mergers, acquisitions and other
fundamental corporate changes and capital expenditures. At December 31, 1999, we
were in compliance with all covenants under the Certificate of Designation.

     Pending Acquisitions and Recently Completed Transactions. There are
numerous transactions currently pending which, if completed, would result in our
purchasing 48 FM and 28 AM radio stations, acquiring the right to operate one
additional FM radio station, acquiring the right to sell advertising in the
United States for one Canadian FM radio station and selling two AM radio
stations. The total cash required to fund our pending acquisitions is expected
to be approximately $510.2 million, which amount does not include 200,000 shares
of Citadel Communications' common stock valued at $10.1 million that may be
delivered in connection with one acquisition. Under certain conditions, we may
be required to pay the $10.1 million in cash in lieu of such shares of common
stock. In addition, we purchased one FM radio station on February 10, 2000, and
we sold 18 FM and seven AM radio stations on November 9, 1999. We received
approximately $26.0 million in cash from the completed disposition; however, the
cash received from this sale plus interest must be utilized as part of the
purchase price for one of our pending acquisitions as we have elected to enter
into a like-kind-exchange for federal income tax purposes. The consummation of
each of the pending transactions is subject to certain conditions, including the
approval of the FCC. Although we believe these closing conditions will be
satisfied in each case, there can be no assurance that this will be the case.
The pending acquisitions are expected to be funded from funds borrowed under our
credit facility, the funds received from the completed disposition and the
proceeds received from the recently completed offering of Citadel
Communications' common stock.

     Capital Expenditures. We had capital expenditures of approximately $16.6
million for the year ended December 31, 1999 compared to $4.5 million in 1998.
This increase is due primarily to the acquisition of a corporate jet, furniture
and fixtures related to the relocation of our corporate offices, the purchase of
new digital automation systems for certain markets and the construction of a new
building in Little Rock, Arkansas. Our other equipment purchases consist
primarily of broadcasting equipment and transmission tower upgrades.

     In addition to acquisitions and debt service, our principal liquidity
requirements will be for working capital and general corporate purposes,
including capital expenditures, which are not expected to be material in amount.
We believe that cash from operating activities, loans under our credit facility,
proceeds from the November 9, 1999 disposition and the proceeds from our
recently completed offering of our common stock should be sufficient to permit
us to meet our financial obligations and to fund our operations, including
completion of our pending acquisitions, for at least the next 12 months,
although additional capital resources may be required in connection with any
further implementation of our acquisition strategy.

     Year 2000 Matters. The year 2000 computer issue primarily results from the
fact that information technology hardware and software systems and other
non-information technology products containing embedded microchip processors
were originally programmed using a two digit format, as opposed to four digits,
to indicate the year. Such programming could cause a system or product failure
or other computer errors and a disruption in the operation of such systems and
products. The year 2000 issue may persist for some time after January 2000.

     Our internal systems have not experienced any material year 2000 issues. We
presently believe that year 2000 issues will not pose significant operational
problems for our business going forward. We continue to monitor our operations
for year 2000 issues, and we believe that any year 2000 problems, which may
arise in our internal systems, will not have a material adverse effect on our
business, financial condition or results of operations. However, we cannot
assure you that this will be the case.

                                       39
<PAGE>   40

     We are not aware of any material year 2000 problems encountered by our
suppliers and major advertisers to date, but have not obtained or sought
confirmations from our suppliers and major advertisers that they did not
experience year 2000 problems. Further, we cannot determine the state of their
year 2000 readiness on a going-forward basis. We cannot assure you that our
suppliers and major advertisers will be successful in ensuring that their
systems have been and will continue to be year 2000 compliant or that their
failure to do so will not have a material adverse effect on our business,
financial condition or results of operations.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Market Risk. During the normal course of business we are routinely
subjected to a variety of market risks, examples of which include, but are not
limited to, interest rate movements and collectibility of accounts receivable.
We constantly assess these risks and have established policies and practices to
protect against the adverse effects of these and other potential exposures.
Although we do not anticipate any material losses in these risk areas, no
assurance can be made that material losses will not be incurred in these areas
in the future.

     Interest Rate Risk. We may be exposed to interest rate changes under our
credit facility, which we maintain to provide liquidity and to fund capital
expenditures and acquisitions. We constantly monitor interest rate changes to
determine the impact any change will have on our business, financial condition
or results of operations. We do not consider our cash and cash equivalents to be
subject to interest rate risk due to their short term maturities.

     Notwithstanding our efforts to manage interest rate risks, there can be no
assurance that we will be adequately protected against the risks associated with
interest rate fluctuations. Our credit facility bears interest equal to an
applicable margin plus a variable rate. For further discussion of our interest
rate under the credit facility, see Item 7, Management's Discussion and Analysis
of Financial Condition and Results of Operations under the heading "Credit
Facility." Our credit facility consists of revolving loans and term loans. The
revolving loans mature on March 31, 2007 (subject to extension until December
31, 2007). The term loans are subject to quarterly principle repayments starting
in March 2003 and ending December 2007. The quarterly repayments are based on a
percentage of the term loan borrowings and the percentage ranges from 3.75% in
2003 to 6.25% in 2007. At December 31, 1999, there was $132.0 million
outstanding under the revolving term loan facility at an interest rate of
8.125%. Assuming a hypothetical increase in the interest rate of 10%, the impact
on our future earnings for the next year would be approximately $1.1 million of
increased interest expense based on $132.0 million of outstanding variable debt.

     In addition, the credit facility requires that no less than 50% of our
long-term indebtedness be subject to fixed interest rates. If our total variable
debt under the credit facility exceeds this 50% threshold, we will be required
to enter into a hedging contract that will convert a portion of the variable
rate into a fixed rate. As of December 31, 1999, our fixed rate debt is greater
than 50% of our outstanding indebtedness and therefore we have not entered into
any interest rate hedging contracts.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

     Citadel Broadcasting Company's Consolidated Financial Statements, including
the notes thereto, and supplementary financial information filed under this Item
8 are listed in Part IV, Item 14, of this report and are included after the
signature page beginning at page F-2.

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

     None

                                       40
<PAGE>   41

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     The following table sets forth the names, ages and positions of the
directors and executive officers of Citadel Broadcasting:

<TABLE>
<CAPTION>
        NAME                AGE                               POSITION
        ----                ---                               --------
<S>                         <C>       <C>
Lawrence R. Wilson          54        Chief Executive Officer and Chairman
Donna L. Heffner            40        Vice President, Chief Financial Officer and Secretary
D. Robert Proffitt          47        President and Chief Operating Officer
Stuart R. Stanek            44        Vice President
Peter J. Benedetti          36        Vice President
Robert F. Fuller            59        Director
Ike Kalangis                62        Director
Ted L. Snider, Sr.          71        Director
John E. von Schlegell       45        Director
</TABLE>

     Lawrence R. Wilson co-founded and was a general partner of Citadel
Communications' predecessor, Citadel Associates Limited Partnership and Citadel
Associates Montana Limited Partnership, from 1984 to July 1992 and has been the
Chief Executive Officer, President and Chairman of Citadel Communications since
it was incorporated in 1993 and Chief Executive Officer and Chairman of the
Board of Citadel Broadcasting since it was incorporated in 1991. Mr. Wilson also
served as President of Citadel Broadcasting from 1991 to October 1998. From 1974
to 1979, Mr. Wilson was Executive Vice President and General Counsel of Combined
Communications Corporation, a national media company, where he handled all
acquisitions and mergers and oversaw the broadcast, newspaper and outdoor
billboard divisions as a part of a five person management committee. From 1979
to 1986, he was engaged in the private practice of law.

     Donna L. Heffner joined Citadel Associates Limited Partnership and Citadel
Associates Montana Limited Partnership in 1988 as Controller. Ms. Heffner has
served as Secretary of Citadel Communications since it was incorporated in 1993
and of Citadel Broadcasting since it was incorporated in 1991. She has served as
Chief Financial Officer of Citadel Communications and Citadel Broadcasting since
1993 and 1992, respectively. In January 1997, Ms. Heffner became Vice President
of Citadel Communications and Citadel Broadcasting. Ms. Heffner also served as
Treasurer of Citadel Communications from 1993 to 1999 and as a director of
Citadel Communications for several months in 1993. She served as Treasurer of
Citadel Broadcasting from 1991 to 1999 and as a director of Citadel Broadcasting
from 1992 to 1993. From 1982 to 1985 and in 1987, she was employed by Price
Waterhouse, and in 1986, she was employed by Lowrimore, Warwick & Company as an
accountant.

     D. Robert Proffitt joined Citadel Associates Limited Partnership and
Citadel Associates Montana Limited Partnership in 1988 as Vice President --
General Manager of KKFM-FM in Colorado Springs. In 1991, he was appointed Vice
President of Citadel Broadcasting, and in 1993, he was appointed Vice President
of Citadel Communications. Mr. Proffitt took over as General Manager of Citadel
Communications' Albuquerque operations in 1994. Mr. Proffitt served as President
of Central Region for Citadel Broadcasting from June 1997 to October 1998, and
he became President and Chief Operating Officer of Citadel Broadcasting in
October 1998.

     Stuart R. Stanek joined Citadel Associates Limited Partnership and Citadel
Associates Montana Limited Partnership in 1986 as a General Manager of KKFM-FM
in Colorado Springs. In 1988, he became General Manager of KBEE-AM/KUBL-FM in
Salt Lake City. In 1991, he was appointed Vice President of Citadel
Broadcasting, in 1992, he was elected to the Board of Directors of Citadel
Broadcasting and in 1993, he was appointed Vice President and elected to the
Board of Directors of Citadel Communications. He served as a Director of Citadel
Communications and Citadel Broadcasting until August 1996. Mr. Stanek became
President of East Region for Citadel Broadcasting in June 1997.

                                       41
<PAGE>   42

     Peter J. Benedetti joined Citadel Communications in April 1995 as Sales
Manager for KMGA-FM in Albuquerque and also became Sales Manager for KHFM-FM in
Albuquerque upon Citadel Communications' acquisition of that station in June
1996. From January 1997 to July 1997, Mr. Benedetti was Director of Sales of
Citadel Communications' Salt Lake City radio station group, and from July 1997
to October 1998, he served as Vice President and General Manager of that radio
station group. In October 1998, Mr. Benedetti became Vice President of Citadel
Communications and Vice President and President of the Central Region for
Citadel Broadcasting, and in July 1999, he became President of the West Region
for Citadel Broadcasting when operations were consolidated into East and West
Regions. Prior to joining Citadel Communications, he served as an account
executive for Jacor Communications in Denver, Colorado.

     Robert F. Fuller became a director of Citadel Communications and Citadel
Broadcasting in November 1999. From 1975 to 1999, he was the President and
majority owner of Fuller-Jeffrey Broadcasting Companies, Inc., a ten station
radio group purchased by Citadel Broadcasting in August 1999. Mr. Fuller brings
over 43 years of radio broadcast experience to Citadel Communications, ranging
from on-air and management positions to ownership of over 30 radio stations.

     Ike Kalangis became a director of Citadel Communications and Citadel
Broadcasting in May 1999. Mr. Kalangis has over 30 years' experience in the
banking industry, most recently, from 1989 until his retirement in 1997, as
Chairman, President and Chief Executive Officer of Boatman's Sunwest, Inc., a
bank holding company with community banks in New Mexico and Texas, which is now
a part of Bank of America.

     Ted L. Snider, Sr. became a director of Citadel Communications and Citadel
Broadcasting in November 1997 following Citadel Communications' October 1997
acquisition of Snider Corporation. Mr. Snider had been Chairman of Snider
Corporation since its incorporation in 1971. Snider Corporation owned two FM and
two AM radio stations, the right to construct an additional FM radio station and
the Arkansas Radio Network.

     John E. von Schlegell has served as a member of the Board of Directors of
Citadel Communications and Citadel Broadcasting since January 1997. He
co-founded and, since 1991, has managed, The Endeavour Capital Fund Limited
Partnership, a firm that invests equity capital in privately held businesses
throughout the northwest. Prior to 1991, Mr. von Schlegell was a general partner
at Golder, Thoma & Cressey, a private equity firm based in Chicago.

BOARD COMPOSITION

     Three of the five persons presently constituting the Board of Directors of
Citadel Broadcasting were elected under the terms of a Fourth Amended and
Restated Voting Agreement dated as of October 15, 1997, by and among Citadel
Communications, the voting trustee under the Amended and Restated Voting Trust
Agreement dated October 15, 1997 and certain other stockholders of Citadel
Communications. In connection with Citadel Communications' initial public
offering in 1998, the Fourth Amended and Restated Voting Agreement and a related
stockholders agreement among Citadel Communications and certain of its
stockholders were terminated. The Amended and Restated Voting Trust Agreement
will continue in effect until terminated in accordance with its terms.

     Each director of Citadel Broadcasting holds office until the next annual
meeting of stockholders and until his or her successor has been elected and
qualified. Officers are elected by the Board of Directors and serve at its
discretion.

                                       42
<PAGE>   43

ITEM 11. EXECUTIVE COMPENSATION

     The following table sets forth information with respect to the compensation
paid to our Chief Executive Officer and each of our other four most highly
compensated executive officers during 1999. Information with respect to 1997
compensation is not given for Mr. Benedetti as he did not begin service as an
executive officer until 1998.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                              LONG-TERM
                                                                                             COMPENSATION
                                                     ANNUAL COMPENSATION             ----------------------------
                                           ---------------------------------------   SECURITIES
             NAME AND                                               OTHER ANNUAL     UNDERLYING      ALL OTHER
        PRINCIPAL POSITION          YEAR     SALARY      BONUS     COMPENSATION(1)    OPTIONS     COMPENSATION(2)
        ------------------          ----   ----------   --------   ---------------   ----------   ---------------
<S>                                 <C>    <C>          <C>        <C>               <C>          <C>
Lawrence R. Wilson................  1999   $  438,319        -0-       -0-            875,000         $3,413
  Chairman and                      1998      358,319   $214,370(3)     -0-            60,000          3,046
  Chief Executive Officer           1997      341,256    120,000(4)     -0-               -0-          3,278

Donna L. Heffner..................  1999   $  230,000        -0-       -0-            250,000         $3,489
  Vice President and                1998      175,000     80,000(3)     -0-            12,000          4,537
  Chief Financial Officer           1997      140,535     50,000(4)     -0-               -0-          3,086

D. Robert Proffitt................  1999   $  250,000        -0-       -0-            250,000         $3,849
  President and                     1998      200,000   $ 40,000(3)     -0-            12,000          3,161
  Chief Operating Officer           1997      192,211     15,000(4)     -0-               -0-          2,541

Stuart R. Stanek..................  1999   $  230,000        -0-     $26,216          250,000         $3,598
  Vice President                    1998      210,000   $ 50,000(3)     -0-            12,000          2,635
                                    1997      190,007     30,000(4)     -0-               -0-          2,529

Peter J. Benedetti................  1999   $  200,000        -0-     $69,402          125,000         $2,202
  Vice President                    1998      160,000(5) $ 65,000(3)     -0-           21,005          2,093
</TABLE>

---------------
(1) In accordance with applicable regulations, the amounts set forth in this
    column do not include perquisites and other personal benefits received by
    the executive officers unless the aggregate value of such perquisites and
    other benefits exceeded the lesser of $50,000 or 10% of the total salary and
    bonus reported for the executive officer. The amount shown for Mr. Stanek
    represents $25,309 for mortgage payments made on behalf of Mr. Stanek and
    $907 for personal motor vehicle use. The amount shown for Mr. Benedetti
    represents $58,568 for closing cost payments made on behalf of Mr. Benedetti
    and reimbursement of the loss on the sale of a home, $7,825 for temporary
    living expenses and $3,009 for personal motor vehicle use.

(2) Included for 1999 are our contributions to Citadel Communications' 401(k)
    Plan (Mr. Wilson - $3,200, Ms. Heffner - $3,408, Mr. Proffitt - $3,717, Mr.
    Stanek - $2,517 and Mr. Benedetti - $2,142), which contributions vest over
    five years, and our payment of premiums for term life insurance (Mr. Wilson
    - $213, Ms. Heffner - $81, Mr. Proffitt - $132, Mr. Stanek - $81 and Mr.
    Benedetti - $60).

(3) Bonuses were earned in 1998 and paid in 1998 and 1999. Does not reflect
    bonuses earned in 1997 but paid in 1998.

(4) Bonuses were earned in 1997 and paid in 1997 and 1998. Does not reflect
    bonuses earned in 1996 but paid in 1997.

(5) Includes payments of $10,000 made in 1999 following a salary increase made
    retroactive to November 1998.

                                       43
<PAGE>   44

     The following table summarizes individual grants of options to purchase
shares of common stock of Citadel Communications to the executive officers
listed in the Summary Compensation Table during the year ended December 31,
1999:

                         OPTIONS GRANTED IN FISCAL 1999

<TABLE>
<CAPTION>
                                        PERCENT OF
                           NUMBER OF      TOTAL      EXERCISE     MARKET                  POTENTIAL REALIZABLE VALUE AT ASSUMED
                           SECURITIES    OPTIONS        OR       PRICE ON                 RATES OF STOCK PRICE APPRECIATION FOR
                           UNDERLYING   GRANTED TO     BASE       DATE OF                             OPTION TERM(4)
                            OPTIONS     EMPLOYEES      PRICE       GRANT     EXPIRATION   --------------------------------------
          NAME              GRANTED      IN 1999     ($/SH)(1)   ($/SH)(2)    DATE(3)      0%($)         5%($)         10%($)
          ----             ----------   ----------   ---------   ---------   ----------   --------    -----------    -----------
<S>                        <C>          <C>          <C>         <C>         <C>          <C>         <C>            <C>
Lawrence R. Wilson(5)....   875,000        42.6%      $29.25      $ 30.25     6-25-09     $875,000    $17,517,500    $43,058,750
Donna L. Heffner(5)......   250,000        12.2        29.25        30.25     6-25-09      250,000      5,005,000     12,302,500
D. Robert Proffitt(5)....   250,000        12.2        29.25        30.25     6-25-09      250,000      5,005,000     12,302,500
Stuart R. Stanek(5)......   250,000        12.2        29.25        30.25     6-25-09      250,000      5,005,000     12,302,500

Peter J. Benedetti(5)....   125,000         6.1        29.25        30.25     6-25-09      125,000      2,502,500      6,151,250
</TABLE>

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

(1) The exercise price equals the price to the public in Citadel Communications'
    June 1999 common stock offering.

(2) The indicated market price on the date of grant was the closing market price
    of the common stock.

(3) The options must be earned prior to June 25, 2004. Any portion not earned
    will be forfeited. Earned options expire on the dates shown in the table.
    See footnote (5).

(4) The potential realizable value is based on the term of the option at the
    time of grant, which is ten years for each of the options set forth in the
    table. An assumed stock price appreciation of 0%, 5% and 10% is used
    pursuant to rules promulgated by the Securities and Exchange Commission. The
    potential realizable value is calculated by assuming that the market price
    on the date of grant appreciates at the indicated rate, compounded annually,
    for the entire term of the option and that the option is exercised and sold
    on the last day of its term at this appreciated stock price. The potential
    realizable value is not intended to forecast the future appreciation of the
    common stock.

(5) The options are earned in one-fifth increments for each increase in average
    stock price (calculated over 20 consecutive trading days) equal to one-fifth
    of the difference between the doubled exercise price and the exercise price.
    When an increment of the option is earned, the earned portion vests 20% each
    year thereafter. Vesting accelerates in the event of a change in control of
    Citadel Communications, as provided for in Citadel Communications' 1999
    Long-Term Incentive Plan.

     The following table shows the number of shares of common stock acquired and
the value realized upon exercise in 1999 of options to purchase shares of common
stock of Citadel Communications by the executive officers listed in the Summary
Compensation Table, as well as the number and value of unexercised options to

                                       44
<PAGE>   45

purchase shares of common stock of Citadel Communications (rounded to the
nearest whole share) held by such persons as of December 31, 1999.

                    AGGREGATED OPTION EXERCISES IN 1999 AND
                         FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>
                                                       NUMBER OF SECURITIES          VALUE OF UNEXERCISED
                                                      UNDERLYING UNEXERCISED             IN-THE-MONEY
                           SHARES                   OPTIONS AT FISCAL YEAR END   OPTIONS AT FISCAL YEAR END(1)
                         ACQUIRED ON     VALUE                  #                              $
                         EXERCISE #    REALIZED $   EXERCISABLE/UNEXERCISABLE      EXERCISABLE/UNEXERCISABLE
                         -----------   ----------   --------------------------   -----------------------------
<S>                      <C>           <C>          <C>                          <C>
Lawrence R.
  Wilson(2)............    178,071     11,105,728        407,410/1,091,467         $  24,721,516/$43,483,540
Donna L. Heffner.......    124,392      7,733,806           58,662/286,000              3,666,588/10,937,142
D. Robert Proffitt.....    124,805      7,736,520           18,421/290,800              1,119,817/11,229,342
Stuart R. Stanek.......     39,600      2,342,538          146,034/288,400              9,211,823/11,083,242
Peter J. Benedetti.....        -0-            -0-            7,801/147,204                 402,874/5,570,746
</TABLE>

---------------
(1) These values have been calculated on the basis of the December 31, 1999
    closing price per share of $64.875, less the applicable exercise price.

(2) Includes options held by Rio Bravo Enterprise Associates, L.P. Mr. Wilson
    owns all of the capital stock of Rio Bravo, Inc., the sole general partner
    of Rio Bravo Enterprise Associates, L.P.

EMPLOYMENT AGREEMENT

     In June 1996, we entered into an employment agreement with Lawrence R.
Wilson which has an initial term ending in June 2001. The agreement provides for
annual base salary compensation, annual increases to base salary and an annual
bonus calculated as a percentage of Mr. Wilson's base salary in effect at the
end of the year and based on our annual performance criteria. The annual
performance criteria were not achieved for the year ended December 31, 1999 and,
therefore, no bonus was earned for 1999. For 1999, the Compensation Committee of
the Citadel Communications Board of Directors approved a base salary for Mr.
Wilson in an amount greater than that provided for in the agreement, following
the Committee's review of compensation levels at comparable public companies.

     Mr. Wilson's employment will terminate upon Mr. Wilson's becoming
permanently disabled or upon a liquidation or dissolution of Citadel
Communications, a sale, transfer or other disposition of all of the assets of
Citadel Broadcasting on a consolidated basis, or any transaction or series of
transactions whereby any person or entity other than ABRY Broadcast Partners II,
L.P. or its affiliates or affiliates of Citadel Communications, becomes the
direct or indirect beneficial owner of securities of Citadel Communications or
Citadel Broadcasting representing 50% or more of the combined voting power of
Citadel Communications' or Citadel Broadcasting's then outstanding securities.
In such event, Mr. Wilson or his beneficiary will be entitled to receive Mr.
Wilson's then base salary through the end of the month in which the termination
occurs. In addition, upon the affirmative vote or written consent of not less
than 66 2/3% of the members of the Citadel Communications Board of Directors,
Mr. Wilson's employment may be terminated with or without cause. If any such
termination is without cause, Mr. Wilson will be entitled to receive his then
current base salary through the end of the then current term of the employment
agreement.

1996 EQUITY INCENTIVE PLAN

     Citadel Communications adopted the 1996 Equity Incentive Plan under which
employees, officers, directors (excluding non-employee directors), consultants,
independent contractors and advisors of Citadel Communications are eligible to
receive awards in the form of incentive stock options and options that are not
incentive stock options to purchase common stock of Citadel Communications.
Awards may also be in the form of stock appreciation rights, restricted
securities and other stock-based awards as determined by the Board of Directors
of Citadel Communications, none of which have been granted to date. The Equity
Incentive Plan is administered by the Compensation Committee of the Citadel
Communications Board of Directors and in certain cases the Citadel

                                       45
<PAGE>   46

Communications Board. The Compensation Committee or the Board has authority
under the Equity Incentive Plan to designate participants, determine the terms
and conditions of awards to be granted to each participant and decide all
matters relating to any award. At December 31, 1999, the total number of shares
of common stock of Citadel Communications that remained reserved and available
for issuance under the Equity Incentive Plan, or which may be used to provide a
basis of measurement for an award, was 2,175,807 shares, including shares
underlying outstanding grants.

     Shares subject to any expired, terminated or lapsed awards are available
for subsequent grants under the Equity Incentive Plan. The exercise price of
incentive stock options granted under the plan may not be less than the fair
market value of the common stock as of the date of grant, and 110% of the fair
market value of the common stock in the case of an incentive stock option
granted to an individual who at the time of the grant owns more than 10% of the
combined voting power of Citadel Communications' capital stock. The Board may
provide that an optionee may pay for shares upon exercise of an option in cash
or by check or through cashless exercise procedures or by such other medium or
by any combination of media as authorized by the Board. The grant of an option
may be accompanied by a reload option, which gives an optionee who pays the
exercise price of an option with shares of common stock an additional option to
acquire the same number of shares that was used to pay for the original option
at an exercise price of not less than the fair market value of common stock as
of the reload option grant date. In the event a participant's employment with
Citadel Communications is terminated due to disability, retirement or any other
reason, a participant may exercise an option only to the extent it was
exercisable on the termination date of the participant's employment. An
incentive stock option must be exercised prior to the earlier of the expiration
of three months (six months in the case of disability after the termination
date) or the expiration date of the options set forth in the award agreement. A
non-incentive stock option must be exercised within the applicable time period
for exercise set forth in the award agreement. In the event of the death of the
participant before an option lapses, an option may be exercised only to the
extent it was exercisable on the date of death. However, such exercise must be
made prior to the earlier of the first anniversary of the participant's death or
the expiration date of the option.

1999 LONG-TERM INCENTIVE PLAN

     Citadel Communications adopted the 1999 Long-Term Incentive Plan, which is
intended to be the primary long-term incentive plan for senior management. The
Long-Term Incentive Plan provides opportunities for participants to earn the
right to purchase shares of Citadel Communications' common stock if performance
goals, measured solely by the increase in the price of the common stock, and
continued employment requirements are met. Participants under the Long-Term
Incentive Plan receive an option grant based on the Citadel Communications
Compensation Committee's evaluation of the participant's ability to contribute
to Citadel Communications' overall performance. If the option is not fully
earned during the specific five-year performance period, any portion not earned
is forfeited, and the shares become available for issuance upon exercise of
other options granted under the plan. For the full option to be earned, the
average stock price (calculated over 20 consecutive trading days) over the
exercise price must double during the performance period. If any shares become
available for additional grants under this plan, the exercise price will be the
average of the bid and asked prices of the common stock on the date of the
grant. The option is earned in one-fifth increments for each increase in average
stock price (calculated over 20 consecutive trading days) equal to one-fifth of
the difference between the doubled exercise price and the exercise price. When
an increment of the option is earned, the earned portion generally vests over a
five-year period. A total of 1,750,000 shares of common stock are reserved and
available for issuance under the Long-Term Incentive Plan.

     At the time that the Citadel Communications Board of Directors adopted the
Long-Term Incentive Plan, the following option grants were made to be effective
as of the closing of Citadel Communications' common stock offering in June 1999,
subject to stockholder approval of the Long-Term Incentive Plan, which was
obtained in July 1999: Lawrence R. Wilson -- 875,000 shares; Donna L.
Heffner -- 250,000 shares; D. Robert Proffitt -- 250,000 shares; Stuart R.
Stanek -- 250,000 shares; and Peter J. Benedetti -- 125,000 shares. The exercise
price for the options granted is $29.25 per share, the price to the public in
Citadel Communications' June 1999 common stock offering. As of March 15, 2000,
four-fifths of each of these options had been earned. No portion has yet vested.

                                       46
<PAGE>   47

401(K) PLAN

     Effective in 1993, Citadel Communications adopted a 401(k) Retirement
Savings Plan for the purpose of providing, at the option of the employee,
retirement benefits to its employees who have been employed for a period of one
year or longer and who meet certain other requirements of the 401(k) plan.
Contributions to the 401(k) plan are made by the employee and, on a voluntary
basis, by us. We currently match 100% of that part of the employee's elective
deferrals up to 2% of the employee's salary.

     A contribution to the 401(k) plan of approximately $532,000 was made by us
during the year ended December 31, 1999.

DIRECTOR COMPENSATION

     Currently, all non-employee directors are entitled to receive an annual fee
of $20,000 for their services as directors of Citadel Communications and Citadel
Broadcasting. Directors who are also our employees do not receive additional
consideration for serving as directors, except that all directors are entitled
to reimbursement for travel and out-of-pocket expenses in connection with their
attendance at Board and committee meetings.

AUDIT AND COMPENSATION COMMITTEE

     The Board of Directors of Citadel Communications has established two
committees, the Audit Committee and the Compensation Committee. These committees
also serve the needs of Citadel Broadcasting.

     The Audit Committee provides oversight of the financial reporting process
and management's responsibility for the integrity, accuracy and objectivity of
financial reports and accounting and financial reporting and practices. The
Audit Committee has the power to recommend the retention of the independent
public accountants for Citadel Broadcasting and to consult with such independent
accountants concerning the plan of audit, their report of audit and the adequacy
of internal controls. The Audit Committee is currently composed of four
independent, non-employee directors, Ted L. Snider, Sr. (Chairman), John E. von
Schlegell, Ike Kalangis and Robert F. Fuller.

     The Compensation Committee reviews and makes recommendations to the Board
of Directors concerning the compensation and benefit policies and practices of
Citadel Broadcasting. The Compensation Committee is currently composed of four
non-employee directors, John E. von Schlegell (Chairman), Ike Kalangis, Robert
F. Fuller and Ted L. Snider, Sr.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     During 1999, John E. von Schlegell, Ted L. Snider, Sr., Ike Kalangis,
Robert F. Fuller and former directors, Scott E. Smith and Patricia Diaz Dennis,
were members of the Compensation Committee of the Citadel Communications Board
of Directors, which determines compensation matters for Citadel Communications
and Citadel Broadcasting.

     Registration Rights Agreement. Citadel Communications is a party to a
Registration Rights Agreement, dated June 28, 1996, as amended, with Lawrence R.
Wilson, Rio Bravo Enterprise Associates, L.P., ABRY Broadcast Partners II, L.P.,
Baker, Fentress & Company, Edward T. Hardy, The Endeavour Capital Fund Limited
Partnership, Ted L. Snider, Sr. and others, which requires Citadel
Communications to register their shares of its common stock under the Securities
Act of 1933, as amended, for offer and sale to the public (including by way of
an underwritten public offering), upon a demand by such stockholders, and which
entitles such parties to join in any registration of equity securities of
Citadel Communications. Various stockholders have exercised their rights under
this agreement and have participated in Citadel Communications' common stock
offerings, including ABRY Broadcast Partners II, L.P. and its general partner;
Baker, Fentress & Company; The Endeavour Capital Fund Limited Partnership and
its general partner; Edward T. Hardy and Ted L. Snider, Sr. ABRY Broadcast
Partners II, L.P., is a significant stockholder of Citadel Communications. For a
portion of 1999, Baker, Fentress & Company owned more than five percent of the
outstanding common stock and Mr. Smith was an Executive Vice President of Baker,
Fentress & Company. Mr. von Schlegell is President and a shareholder of the
general partner of The Endeavour Capital Fund Limited Partnership, and Edward T.
Hardy was an executive officer of
                                       47
<PAGE>   48

Citadel Communications and Citadel Broadcasting. Mr. Wilson owns all of the
capital stock of Rio Bravo, Inc., the sole general partner of Rio Bravo
Enterprise Associates, L.P. In addition to those parties having registration
rights under the Registration Rights Agreement, each of Rio Bravo Enterprise
Associates, L.P., Donna L. Heffner, D. Robert Proffitt, Stuart R. Stanek and
Peter J. Benedetti participated as selling stockholders in Citadel
Communications' common stock offerings in 1999 and/or 2000.

     Transactions with Connect Communications. On October 1, 1999, Citadel
Broadcasting acquired certain assets and subscriber agreements of Connect
Communications Corporation, an internet service provider in Arkansas, in
exchange for extinguishment of approximately $0.1 million in accounts receivable
and certain equipment owned by Citadel Broadcasting. Ted Snider, Jr., the son of
Ted L. Snider, Sr., a director of Citadel Communications and Citadel
Broadcasting, is a director and shareholder of Connect Communications
Corporation.

     Connect Communications Corporation also provided telephone service to
Citadel Broadcasting during 1999. The value of the service provided in 1999 was
approximately $124,000. As of December 31, 1999, Connect Communications
Corporation owed Citadel Broadcasting approximately $69,000 for third party
telephone charges, which were to be reimbursed by Connect Communications
Corporation. We believe that the terms of our transactions with Connect
Communications Corporation are at least as favorable to us as those that could
be obtained generally from unaffiliated parties.

     Consulting Agreement. On August 31, 1999, Citadel Broadcasting entered into
a seven-year Consulting Agreement with Robert F. Fuller which provides for
compensation to Mr. Fuller of $250,000 each year. In 1999, Citadel Broadcasting
paid Mr. Fuller $83,333 under this Consulting Agreement. Citadel Broadcasting
originally entered into this Consulting Agreement in connection with its
acquisition of all of the issued and outstanding shares of capital stock of
Fuller-Jeffrey Broadcasting Companies, Inc. from Mr. Fuller and Joseph N.
Jeffrey, Jr., the two former stockholders of Fuller-Jeffrey Broadcasting. Mr.
Fuller became a director of each of Citadel Communications and Citadel
Broadcasting in November 1999. We believe that the terms of the Consulting
Agreement with Mr. Fuller are at least as favorable to us as those that could be
obtained generally from unaffiliated parties.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Citadel Communications owns all of the currently issued and outstanding
common stock of Citadel Broadcasting and has pledged such common stock to secure
its guaranty under Citadel Broadcasting's credit facility. The only other
outstanding capital stock of Citadel Broadcasting is the 13 1/4% Exchangeable
Preferred Stock.

     The only outstanding capital stock of Citadel Communications is its common
stock. The following table sets forth information with respect to the beneficial
ownership of Citadel Communications' common stock as of March 12, 2000 by (1)
each person, entity or group known to us to beneficially own more than five
percent of the common stock, (2) each of our directors, (3) each of our
executive officers listed in the Summary Compensation Table in Item 11,
Executive Compensation, and (4) all of our directors and executive officers as a
group.

     Except as indicated below, the persons named have sole voting and
investment power with respect to the shares shown as beneficially owned by them.
The percentages are rounded to the nearest tenth of a percent. Holders of common
stock are entitled to one vote per share on all matters submitted to a vote of
stockholders generally.

     The number of shares and percentages are calculated in accordance with Rule
13d-3 under the Securities Exchange Act of 1934, as amended, on a stockholder by
stockholder basis, assuming that each stockholder converted all securities owned
by such stockholder that are convertible into common stock at the option of the
holder within 60 days of March 12, 2000, and that no other stockholder so
converts. The numbers and percentages of shares owned assume that these
outstanding options have been exercised by such respective stockholders as
follows:

     - Lawrence R. Wilson -- 407,410 shares (including options to purchase
       395,410 shares held by Rio Bravo Enterprise Associates, L.P.),
                                       48
<PAGE>   49

     - Donna L. Heffner -- 58,662 shares,

     - D. Robert Proffitt -- 20,821 shares,

     - Stuart R. Stanek -- 127,234 shares,

     - Peter J. Benedetti -- 7,801 shares, and

     - all directors and executive officers as a group -- 621,928 shares.

<TABLE>
<CAPTION>
                                                              SHARES OF COMMON STOCK
                                                                BENEFICIALLY OWNED
                                                              -----------------------
                                                                           PERCENT OF
                                                                             COMMON
BENEFICIAL OWNER                                               NUMBER        STOCK
----------------                                              ---------    ----------
<S>                                                           <C>          <C>
Lawrence R. Wilson(1).......................................  2,167,956        5.8%
  City Center West
  Suite 400
  7201 West Lake Mead Boulevard
  Las Vegas, NV 89128

Donna L. Heffner(2).........................................    177,213          *

D. Robert Proffitt(3).......................................    173,555          *

Stuart R. Stanek(4).........................................    209,907          *

Peter J. Benedetti(5).......................................     11,628          *

Robert F. Fuller............................................     10,000          *

Ike Kalangis................................................      1,000          *

Ted L. Snider, Sr.(6).......................................    214,817          *

John E. von Schlegell(7)....................................     84,377          *

All directors and executive officers as a group (9            3,050,453        8.1%
  persons)(8)...............................................

ABRY Broadcast Partners II, L.P.(9).........................  3,339,144        9.1%
  18 Newbury Street
  Boston, MA 02116

Putnam Investments, Inc.(10)................................  4,071,267       11.1%
  One Post Office Square
  Boston, MA 02109

Janus Capital Corporation (11)..............................  3,263,430        8.9%
  100 Filmore Street
  Suite 300
  Denver, CO 80206
</TABLE>

---------------
* Less than 1%

(1)   The numbers of shares include 1,702,883 shares held by Rio Bravo
      Enterprise Associates, L.P. The numbers of shares also include 395,410
      shares of common stock which may be acquired upon exercise of options held
      by Rio Bravo Enterprise Associates, L.P. Rio Bravo Enterprise Associates,
      L.P. therefore beneficially owns 2,098,293 shares or 5.6% of the common
      stock. Mr. Wilson, a director and executive officer, owns all of the
      capital stock of Rio Bravo, Inc., the sole general partner of Rio Bravo
      Enterprise Associates, L.P. The remaining shares are jointly owned by Mr.
      Wilson and his spouse, Claire Wilson, or may be acquired upon exercise of
      options held by Mr. Wilson.

(2)   Ms. Heffner's shares are jointly owned by Ms. Heffner and her spouse, Tim
      Heffner.

                                       49
<PAGE>   50

(3)   Mr. Proffitt's shares are jointly owned by Mr. Proffitt and his spouse,
      Lynette Proffitt.

(4)   Mr. Stanek's shares are jointly owned by Mr. Stanek and his spouse, Kim
      Stanek. The number of shares shown does not include 1,781 shares owned by
      Kim Stanek.

(5)   Mr. Benedetti's shares are jointly owned by Mr. Benedetti and his spouse,
      Krista Benedetti.

(6)   The number of shares shown does not include 121,713 shares owned by Mr.
      Snider's spouse.

(7)   Represents 2,554 shares held by The Endeavour Capital Fund Limited
      Partnership and 81,823 shares held by DVS Management, Inc. Mr. von
      Schlegell is the Managing Partner of The Endeavour Capital Fund and the
      President and a shareholder of DVS Management, the general partner of The
      Endeavour Capital Fund.

(8)   Includes shares discussed in footnotes (1) and (7).

(9)   All of the shares beneficially owned by ABRY Broadcast Partners II, L.P.
      are held under an Amended and Restated Voting Trust Agreement dated
      October 15, 1997. By its terms, the Amended and Restated Voting Trust
      Agreement shall continue in effect until terminated upon the written
      agreement of Citadel Communications and the holders of voting trust
      certificates which represent a majority of the shares held in the voting
      trust as determined in accordance with the Amended and Restated Voting
      Trust Agreement. The voting trust also terminates with respect to any
      shares upon transfer of such shares to a person who is not an affiliate of
      ABRY Broadcast Partners II, L.P. or upon a distribution of shares by ABRY
      Broadcast Partners II, L.P. to its partners. During the term of the
      Amended and Restated Voting Trust Agreement, the voting trustee has the
      right to vote the shares of stock subject to that agreement and to take
      part in any stockholders' meetings, including the right to vote the shares
      for the election of directors of Citadel Communications. The voting
      trustee may assign his rights and delegate his obligations to a successor
      voting trustee, who shall be a back-up trustee or other person appointed
      in the manner provided under the terms of the Amended and Restated Voting
      Trust Agreement. The voting trustee is Harlan A. Levy, whose address is
      1585 Broadway, 19th Floor, New York, N.Y. 10036. Dispositive power with
      respect to these shares is held by Royce Yudkoff, the sole trustee of ABRY
      Holdings, Co., the sole member of ABRY Holdings, LLC, the general partner
      of ABRY Capital, L.P., the general partner of ABRY Broadcast Partners II,
      L.P.

(10)  As reported on Schedule 13G filed with the Securities and Exchange
      Commission on February 17, 2000 (dated February 7, 2000) by Putnam
      Investments, Inc. on behalf of itself and Marsh & McLennan Companies,
      Inc., Putnam Investment Management, Inc. and The Putnam Advisory Company,
      Inc., 301,000 of the shares indicated are under shared voting power among
      Putnam Investments, Inc. and The Putnam Advisory Company, Inc. Of the
      shares indicated, 3,598,967 shares are under shared dispositive power
      between Putnam Investments, Inc. and Putnam Investment Management, Inc.,
      and 472,300 shares are under shared dispositive power between Putnam
      Investments, Inc. and The Putnam Advisory Company, Inc. Putnam Investment
      Management, Inc. and The Putnam Advisory Company, Inc. are subsidiaries of
      Putnam Investments, Inc. and Putnam Investments, Inc. is a subsidiary of
      Marsh & McLennan Companies, Inc. The number of shares shown assumes that
      there has been no change in the number of shares beneficially owned from
      the number of shares reported as being beneficially owned in the Schedule
      13G. Pursuant to Rule 13d-4 under the Securities Exchange Act, March &
      McLennan Companies, Inc. and Putnam Investments, Inc. declared that their
      filing of the Schedule 13G shall not be deemed to be an admission of
      beneficial ownership of the shares reported.

(11)  As reported on a Schedule 13G filed with the Securities and Exchange
      Commission on January 11, 2000 (dated January 10, 2000) by Janus Capital
      Corporation on behalf of itself and Thomas H. Bailey, all of the shares
      indicated are under shared voting and dispositive power among Janus
      Capital Corporation and Mr. Bailey. Mr. Bailey owns approximately 12.2% of
      Janus Capital. The number of shares shown assumes that there has been no
      change in the number of shares beneficially owned from the number of
      shares reported as being beneficially owned in the Schedule 13G. In the
      Schedule 13G, Mr. Bailey disclaimed beneficial ownership in these shares.
      Janus Capital and Mr. Bailey declared that they do not have the right to
      receive any dividends from, or the proceeds from the sale of, these shares
      and disclaimed any ownership associated with such rights.

                                       50
<PAGE>   51

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

SALE AND LEASEBACK OF AIRPLANE

     In December 1995, Citadel Broadcasting sold to Wilson Aviation, L.L.C., a
company then owned by Lawrence R. Wilson and his spouse and currently owned by
Rio Bravo Enterprise Associates, L.P., an airplane formerly owned by Citadel
Broadcasting, for a cash purchase price of approximately $1.3 million.
Contemporaneously with the sale of the airplane, Citadel Broadcasting entered
into an agreement to lease the airplane from Wilson Aviation, L.L.C. Under the
terms of the lease, Citadel Broadcasting paid rent in the amount of $252,000 in
1999 and bore the costs of the maintenance, repair and operation of the
airplane. The lease was terminated effective as of January 1, 2000. The sale and
leaseback were not independently established in an arm's length transaction;
however, the original transaction was reviewed and approved by Citadel
Broadcasting's senior lender and we believe, based upon such review, that the
terms of the transaction were reasonable and at least as favorable to us as
could have been obtained generally from unaffiliated parties. Mr. Wilson is a
director and an executive officer of each of Citadel Communications and Citadel
Broadcasting. Mr. Wilson owns all of the capital stock of Rio Bravo, Inc., the
sole general partner of Rio Bravo Enterprise Associates, L.P.

     See Item 11, Executive Compensation, under the heading "Compensation
Committee Interlocks and Insider Participation" for a description of various
other transactions involving our directors and executive officers and
significant stockholders of Citadel Communications.

                                       51
<PAGE>   52

                                    PART IV

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

     (a)(1) Financial Statements -- The following Consolidated Financial
            Statements of Citadel Broadcasting Company and Subsidiary are filed
            as part of Item 8 of this report and are included after the
            signature page:

<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                             <C>
Independent Auditors' Report                                    F-2
Audited Consolidated Financial Statements:
  Consolidated Balance Sheets as of December 31, 1998 and
     1999                                                       F-3
  Consolidated Statements of Operations for the years ended
     December 31, 1997, 1998 and 1999                           F-4
  Consolidated Statements of Shareholders' Equity for the
     years ended December 31, 1997, 1998 and 1999               F-5
  Consolidated Statements of Cash Flows for the years ended
     December 31, 1997, 1998 and 1999                           F-6
  Notes to Consolidated Financial Statements                    F-7
</TABLE>

     (a)(2) Financial Statement Schedules--

           Schedule II: Valuation and Qualifying Accounts. Information required
           by Schedule II is included in the Notes to Citadel Broadcasting
           Company's Consolidated Financial Statements as Note (15).

     (a)(3) Exhibits -- The Exhibits listed in the accompanying Exhibit Index
are filed as part of this report.

     (b)   Reports on Form 8-K -- During the quarter ended December 31, 1999,
           Citadel Broadcasting Company filed the following reports on Form 8-K:

        (i) Form 8-K/A filed on December 3, 1999 amending previously filed pro
            forma financial information of Citadel Broadcasting Company and
            Subsidiary as follows:

           Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June
           30, 1999

           Unaudited Pro Forma Condensed Consolidated Statement of Operations
           for the six months ended June 30, 1999

           Unaudited Pro Forma Condensed Consolidated Statement of Operations
           for the twelve months ended December 31, 1998

        (ii) Form 8-K filed on December 10, 1999 reporting (i) Citadel
             Broadcasting Company's agreements to acquire radio stations in
             Michigan, Massachusetts, New York, New Jersey, Texas, Louisiana,
             Connecticut, Maine, Oklahoma, Utah and New Mexico and (ii)
             appointment of Robert F. Fuller as a director of Citadel
             Communications Corporation and Citadel Broadcasting Company. The
             following financial information was filed with this report on Form
             8-K:

BROADCASTING PARTNERS HOLDINGS RADIO GROUP

        Independent Auditors' Report

        Combined Balance Sheets as of December 31, 1997 and 1998 and for
        September 30, 1999 (unaudited)

        Combined Statements of Operations for the years ended December 31, 1997
        and 1998 and for the nine months ended September 30, 1998 and 1999
        (unaudited)

        Combined Statements of Partners' Capital for the nine months ended
        September 30, 1999 (unaudited)

        Combined Statements of Cash Flows for the years ended December 31, 1997
        and 1998 and for the nine months ended September 30, 1998 and 1999
        (unaudited)

        Notes to Combined Financial Statements

                                       52
<PAGE>   53

LIGGETT BROADCAST, INC.

        Report of Independent Auditors

        Combined Balance Sheet as of December 31, 1998

        Combined Statement of Shareholder's Equity for the year ended December
        31, 1998

        Combined Statement of Operations for the year ended December 31, 1998

        Combined Statement of Cash Flows for the year ended December 31, 1998

        Notes to Combined Financial Statements

        Combined Balance Sheet as of September 30, 1999 (unaudited)

        Combined Statement of Shareholder's Equity for the nine months ended
        September 30, 1999 (unaudited)

        Combined Statements of Operations for the nine months ended September
        30, 1999 (unaudited)

        Combined Statements of Cash Flows for the nine months ended September
        30, 1999 (unaudited)

        Notes to Combined Financial Statements (unaudited)

WICKS RADIO GROUP (A DIVISION OF WICKS BROADCAST GROUP LIMITED PARTNERSHIP)

        Independent Auditors' Report

        Balance sheets as of December 31, 1998 and June 30, 1999 (unaudited)

        Statements of Operations and Changes in Division Equity for the year
        ended December 31, 1998 and for the six months ended June 30, 1998 and
        June 30, 1999 (unaudited)

        Statements of Cash Flows for the year ended December 31, 1998 and for
        the six months ended June 30, 1998 and June 30, 1999 (unaudited)

        Notes to financial statements

CITYWIDE COMMUNICATIONS, INC.

        Independent Auditors' Report

        Consolidated Balance Sheet as of December 31, 1998

        Consolidated Statement of Operations and Accumulated Deficit for the
        year ended December 31, 1998

        Consolidated Statement of Stockholders' Deficit for the year ended
        December 31, 1998

        Consolidated Statement of Cash Flows for the year ended December 31,
        1998

        Notes to Consolidated Financial Statements

CARIBOU COMMUNICATIONS CO.

        Independent Auditors' Report

        Balance Sheets as of December 31, 1997 and 1998

        Statements of Operations as of December 31, 1997 and 1998

        Statements of Changes in Partners' Equity for the years ended December
        31, 1997 and 1998

        Statements of Cash Flows for the years ended December 31, 1997 and 1998

        Notes to Financial Statements

                                       53
<PAGE>   54

TELE-MEDIA BROADCASTING COMPANY AND ITS PARTNERSHIP INTERESTS

        Independent Auditors' Report

        Consolidated Balance Sheet as of December 31, 1995 and 1996

        Consolidated Statement of Operations for the years ended December 31,
        1994, 1995 and 1996

        Consolidated Statement of Deficiency in Net Assets for the years ended
        December 31, 1994, 1995 and 1996

        Consolidated Statement of Cash Flows for the years ended December 31,
        1994, 1995 and 1996

        Notes to Consolidated Financial Statements

        Condensed Consolidated Balance Sheet as of June 30, 1997 (unaudited)

        Condensed Consolidated Statements of Operations and Changes in Deficit
        for the six months ended June 30, 1996 and 1997 (unaudited)

        Condensed Consolidated Statements of Cash Flows for the six months ended
        June 30, 1996 and 1997 (unaudited)

        Notes to Unaudited Condensed Consolidated Financial Statements

     The following pro forma financial information of Citadel Broadcasting
Company and Subsidiary was filed with this report on Form 8-K:

        Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September
        30, 1999

        Unaudited Pro Forma Condensed Consolidated Statement of Operations for
        the nine months ended September 30, 1999

        Unaudited Pro Forma Condensed Consolidated Statement of Operations for
        the twelve months ended December 31, 1998

                                       54
<PAGE>   55

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Citadel Broadcasting Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.

                                          CITADEL BROADCASTING COMPANY

Date: March 30, 2000                      By: /s/ LAWRENCE R. WILSON
                                            ------------------------------------
                                            Lawrence R. Wilson
                                            Chairman of the Board and Chief
                                              Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Citadel
Broadcasting Company and in the capacities and on the dates indicated.

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

        /s/ LAWRENCE R. WILSON             Chairman of the Board and Chief Executive  March 30, 2000
---------------------------------------      Officer
          Lawrence R. Wilson                 (Principal Executive Officer)

         /s/ DONNA L. HEFFNER              Vice President and Chief Financial         March 30, 2000
---------------------------------------      Officer (Principal Financial and
           Donna L. Heffner                  Accounting Officer)

         /s/ ROBERT F. FULLER              Director                                   March 30, 2000
---------------------------------------
           Robert F. Fuller

           /s/ IKE KALANGIS                Director                                   March 30, 2000
---------------------------------------
             Ike Kalangis

       /s/ JOHN E. VON SCHLEGELL           Director                                   March 30, 2000
---------------------------------------
         John E. von Schlegell

        /s/ TED L. SNIDER, SR.             Director                                   March 30, 2000
---------------------------------------
          Ted L. Snider, Sr.
</TABLE>

                                       55
<PAGE>   56

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
                             SECTION 12 OF THE ACT.

     No annual report to security holders covering Citadel Broadcasting
Company's last fiscal year other than this Form 10-K and no proxy statement,
form of proxy or other proxy soliciting material relating to an annual or other
meeting of security holders has been sent or is expected to be sent to Citadel
Broadcasting Company's security holders.

                                       56
<PAGE>   57

                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Independent Auditors' Report................................   F-2
Consolidated Balance Sheets as of December 31, 1998 and        F-3
  1999......................................................
Consolidated Statements of Operations for the years ended      F-4
  December 31, 1997, 1998 and 1999..........................
Consolidated Statements of Shareholder's Equity for the        F-5
  years ended December 31, 1997, 1998 and 1999..............
Consolidated Statements of Cash Flows for the years ended      F-6
  December 31, 1997, 1998 and 1999..........................
Notes to Consolidated Financial Statements..................   F-7
</TABLE>

                                       F-1
<PAGE>   58

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholder
Citadel Broadcasting Company:

We have audited the accompanying consolidated balance sheets of Citadel
Broadcasting Company (a wholly-owned subsidiary of Citadel Communications
Corporation) and subsidiary as of December 31, 1998 and 1999 and the related
consolidated statements of operations, shareholder's equity and cash flows for
each of the years in the three-year period ended December 31, 1999. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Citadel Broadcasting
Company and subsidiary as of December 31, 1998 and 1999 and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1999, in conformity with generally accepted accounting
principles.

/s/ KPMG LLP

Phoenix, Arizona
February 29, 2000

                                       F-2
<PAGE>   59

                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

                          Consolidated Balance Sheets

                           December 31, 1998 and 1999
                    (In thousands, except for share amounts)

<TABLE>
<CAPTION>
                                                                1998        1999
                                                              --------    --------
<S>                                                           <C>         <C>
ASSETS
Current assets:
  Cash and cash equivalents.................................  $102,655    $ 17,981
  Accounts receivable, less allowance for doubtful accounts
     of $1,187 in 1998 and $2,443 in 1999...................    33,673      52,728
  Due from related parties..................................       215         236
  Income taxes receivable...................................        --         226
  Prepaid expenses..........................................     1,956       2,708
  Net assets of discontinued operations.....................     3,618       2,275
  Assets held for sale......................................    25,938          --
                                                              --------    --------
       Total current assets.................................   168,055      76,154
Property and equipment, net.................................    33,029      68,035
Intangible assets, net......................................   266,446     538,664
Restricted cash.............................................        --      26,192
Other assets................................................     4,238       7,568
                                                              --------    --------
                                                              $471,768    $716,613
                                                              ========    ========

LIABILITIES, EXCHANGEABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable..........................................  $  4,018    $  1,696
  Accrued liabilities.......................................    10,869      13,344
  Current maturities of notes payable.......................        --       5,495
  Current maturities of other long-term obligations.........       168         842
                                                              --------    --------
       Total current liabilities............................    15,055      21,377
Note payable................................................        --     132,000
Senior subordinated notes payable, net of unamortized
  discount..................................................   210,091     210,509
Other long-term obligations, less current maturities........     1,040       2,516
Deferred tax liability......................................    24,844      45,640
                                                              --------    --------
     Total liabilities......................................   251,030     412,042
                                                              --------    --------
Exchangeable preferred stock................................   116,775      85,362
Commitments and contingencies (Note 20)
Shareholders' equity:
  Common stock, $.001 par value; authorized 136,300 shares,
     issued and outstanding 40,000 and 45,000 shares in 1998
     and 1999, respectively.................................        --          --
  Additional paid-in capital................................   135,338     285,156
  Deferred compensation.....................................    (1,044)    (26,924)
  Accumulated deficit.......................................   (30,095)    (39,023)
  Accumulated other comprehensive loss......................      (236)         --
                                                              --------    --------
       Total shareholders' equity...........................   103,963     219,209
                                                              --------    --------
                                                              $471,768    $716,613
                                                              ========    ========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       F-3
<PAGE>   60

                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

                     Consolidated Statements of Operations
                  Years ended December 31, 1997, 1998 and 1999
               (In thousands, except share and per share amounts)

<TABLE>
<CAPTION>
                                                               1997        1998        1999
                                                             --------    --------    --------
<S>                                                          <C>         <C>         <C>
Gross broadcasting revenue.................................  $ 98,915    $147,191    $196,204
  Less agency commissions..................................     9,666      13,879      17,709
                                                             --------    --------    --------
     Net broadcasting revenue..............................    89,249     133,312     178,495
                                                             --------    --------    --------
Operating expenses:
  Station operating expenses...............................    64,764      91,845     115,312
  Depreciation and amortization............................    14,460      25,970      35,749
  Corporate general and administrative.....................     3,530       4,295       7,010
  Non-cash deferred compensation...........................        --          74       1,727
                                                             --------    --------    --------
     Operating expenses....................................    82,754     122,184     159,798
                                                             --------    --------    --------
     Operating income......................................     6,495      11,128      18,697
                                                             --------    --------    --------
Non-operating expenses (income):
  Interest expense.........................................    12,304      18,126      25,385
  Interest income..........................................      (439)       (822)     (1,877)
  Loss (gain) on sale of assets............................        --      (1,045)      1,208
  Other, net...............................................       (11)        216         281
                                                             --------    --------    --------
     Non-operating expenses, net...........................    11,854      16,475      24,997
                                                             --------    --------    --------
     Loss from continuing operations before income taxes...    (5,359)     (5,347)     (6,300)
Income tax (benefit).......................................      (770)     (1,395)     (1,647)
                                                             --------    --------    --------
     Loss from continuing operations.......................    (4,589)     (3,952)     (4,653)
Income (loss) from discontinued operations, net of tax.....      (102)         21      (4,275)
                                                             --------    --------    --------
     Net loss..............................................    (4,691)     (3,931)     (8,928)
Dividend requirement for exchangeable preferred stock......     6,633      14,586      14,103
                                                             --------    --------    --------
     Net loss applicable to common shares..................  $(11,324)   $(18,517)   $(23,031)
                                                             ========    ========    ========
Basic and diluted loss from continuing operations after
  dividend requirement per common share....................  $(280.55)   $(463.45)   $(440.40)
Basic and diluted net loss per common share................  $(283.10)   $(462.93)   $(540.77)
Weighted average common shares outstanding.................    40,000      40,000      42,589
                                                             ========    ========    ========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       F-4
<PAGE>   61

                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

                Consolidated Statements of Shareholders' Equity
                  Years ended December 31, 1997, 1998 and 1999
                      (In thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                                                  ACCUMULATED
                                      COMMON STOCK     ADDITIONAL                                    OTHER           TOTAL
                                     ---------------    PAID-IN       DEFERRED     ACCUMULATED   COMPENSATION    SHAREHOLDERS'
                                     SHARES   AMOUNT    CAPITAL     COMPENSATION     DEFICIT         LOSS           EQUITY
                                     ------   ------   ----------   ------------   -----------   -------------   -------------
<S>                                  <C>      <C>      <C>          <C>            <C>           <C>             <C>
Balances at December 31, 1996......  40,000    $--      $ 27,473            --      $(21,473)        $  --         $  6,000
Net loss...........................      --     --            --            --        (4,691)           --           (4,691)
Capital contribution from parent,
  net..............................      --     --        21,457            --            --            --           21,457
Exchangeable preferred stock
  dividend requirement.............      --     --        (6,633)           --            --            --           (6,633)
                                     ------    ---      --------      --------      --------         -----         --------
Balances at December 31, 1997......  40,000     --        42,297            --       (26,164)           --           16,133
Comprehensive loss:
  Net loss.........................      --     --            --            --        (3,931)           --           (3,931)
  Unrealized loss on hedging
    contract, net of tax...........      --     --            --            --            --          (236)            (236)
                                                                                                                   --------
    Total comprehensive loss.......      --     --            --            --            --            --           (4,167)
                                                                                                                   --------
Proceeds of initial public offering
  of parent........................      --     --       116,514            --            --            --          116,514
Cash payments of initial public
  offering costs...................      --     --        (9,877)           --            --            --           (9,877)
Capital contribution from parent,
  net..............................      --     --            52            --            --            --               52
Deferred compensation..............      --     --         1,118        (1,044)           --            --               74
Accretion of exchangeable preferred
  stock costs......................      --     --          (180)           --            --            --             (180)
Exchangeable preferred stock
  dividend requirement.............      --     --       (14,586)           --            --            --          (14,586)
                                     ------    ---      --------      --------      --------         -----         --------
Balances at December 31, 1998......  40,000     --       135,338        (1,044)      (30,095)         (236)         103,963
Comprehensive loss:
  Net loss.........................      --     --            --            --        (8,928)           --           (8,928)
  Unrealized gain on hedging
    contract, net of tax...........      --     --            --            --            --           236              236
                                                                                                                   --------
    Total comprehensive loss.......      --     --            --            --            --            --           (8,692)
                                                                                                                   --------
Proceeds from stock issued to
  parent...........................   5,000     --        51,712            --            --            --           51,712
Capital contribution from parent,
  net of costs of $1,366...........      --     --        90,319            --            --            --           90,319
Tax benefit of option exercises
  from parent......................      --     --           479            --            --            --              479
Deferred compensation..............      --     --        27,607       (25,880)           --            --            1,727
Accretion of exchangeable preferred
  stock costs......................      --     --          (206)           --            --            --             (206)
Exchangeable preferred stock
  dividend requirement.............      --     --       (14,103)           --            --            --          (14,103)
Premium paid on partial retirement
  of preferred stock...............      --     --        (5,990)           --            --            --           (5,990)
                                     ------    ---      --------      --------      --------         -----         --------
Balances at December 31, 1999......  45,000    $--      $285,156      $(26,924)     $(39,023)        $  --         $219,209
                                     ======    ===      ========      ========      ========         =====         ========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       F-5
<PAGE>   62

                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

                     Consolidated Statements of Cash Flows

                  Years ended December 31, 1997, 1998 and 1999
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                1997         1998         1999
                                                              ---------    ---------    --------
<S>                                                           <C>          <C>          <C>
Cash flows from operating activities:
  Net loss..................................................  $  (4,691)   $  (3,931)   $ (8,928)
  Adjustments to reconcile net loss to net cash provided by
    (used in) operating activities:
       Amortization of deferred revenue.....................         --           --        (100)
       Depreciation and amortization........................     14,636       26,414      35,749
       Deferred income taxes................................       (770)      (1,806)     (2,593)
       Deferred compensation expense........................         --           74       1,727
       Amortization of debt issuance costs and debt
         discounts..........................................        441          717       1,849
       Bad debt expense.....................................      1,016        1,201       5,787
       Loss/(gain) on sale of assets........................         --       (1,045)      1,208
       Changes in assets and liabilities, net of
         acquisitions:
         Increase in accounts receivable and notes
           receivable from related parties..................    (10,214)      (9,586)    (18,483)
         Increase in prepaid expenses.......................       (230)        (424)       (528)
         Increase (decrease) in accounts payable............        708          359      (4,238)
         Increase in accrued liabilities....................      5,324        1,565       1,508
         (Increase) decrease in net assets of discontinued
           operations.......................................         --          413       2,388
                                                              ---------    ---------    --------
         Net cash provided by operating activities..........      6,220       13,951      15,346
                                                              ---------    ---------    --------
Cash flows from investing activities:
  Capital expenditures......................................     (2,070)      (4,511)    (16,609)
  Capitalized acquisition costs.............................     (2,929)      (1,242)     (5,579)
  Cash paid to acquire stations.............................   (205,523)     (39,128)   (293,334)
  Other assets, net.........................................       (677)        (390)        (32)
  Deposits for pending acquisitions.........................       (650)          --      (1,600)
  Proceeds from sales of assets.............................         --        2,440      25,965
  Cash held in escrow for future acquisitions and
    prepayments.............................................         --           --     (26,192)
  Capital expenditures for discontinued operations..........       (450)      (3,581)     (1,046)
                                                              ---------    ---------    --------
    Net cash used in investing activities...................   (212,299)     (46,412)   (318,427)
                                                              ---------    ---------    --------
Cash flows from financing activities:
  Principal payments on notes payable.......................    (39,000)    (125,084)         --
  Proceeds from notes payable...............................     52,500       35,000     132,000
  Proceeds from senior subordinated notes payable...........     97,250      111,550          --
  Proceeds from issuance of exchangeable preferred stock....     95,377           --          --
  Proceeds from stock issued to parent......................         --           --      51,712
  Cash payments of public offering costs....................         --       (9,877)     (1,366)
  Payment of debt issuance costs............................     (1,855)        (689)     (3,779)
  Principal payments on other long-term obligations.........       (735)        (442)       (133)
  Proceeds from other obligations...........................         --          407          --
  Proceeds from issuance of common stock....................         --           --          --
  Payment of dividends on exchangeable preferred stock......         --           --        (515)
  Redemption of exchangeable preferred stock including
    premium.................................................         --           --     (51,197)
  Payments to parent company................................    (12,817)          --          --
  Capital contributions from parent company.................     21,456      116,566      91,685
                                                              ---------    ---------    --------
    Net cash provided by financing activities...............    212,176      127,431     218,407
                                                              ---------    ---------    --------
    Net increase (decrease) in cash and cash equivalents....      6,097       94,970     (84,674)
Cash and cash equivalents, beginning of year................      1,588        7,685     102,655
                                                              ---------    ---------    --------
Cash and cash equivalents, end of year......................  $   7,685    $ 102,655    $ 17,981
                                                              =========    =========    ========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       F-6
<PAGE>   63

                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

     Citadel Broadcasting Company was formed August 21, 1991 as a Nevada
corporation. Citadel Communications Corporation ("Citadel Communications" or the
"Parent") owns all of the outstanding common stock of Citadel Broadcasting
Company. Citadel License, Inc. was a wholly-owned subsidiary of Citadel
Broadcasting Company. On December 28, 1999, Citadel License, Inc. was merged
into Citadel Broadcasting Company. Citadel Broadcasting Company owns and
operates radio stations and holds Federal Communications Commission ("FCC")
licenses in Arkansas, California, Colorado, Idaho, Indiana, Louisiana, Maine,
Massachusetts, Michigan, Nevada, New Hampshire, New Mexico, New York, Oklahoma,
Pennsylvania, Rhode Island, South Carolina, Utah and Washington.

     In addition, Citadel Broadcasting Company owns and operates an internet
service provider, offering its subscribers a variety of services, including
electronic mail and access to the internet. In December 1999, Citadel
Broadcasting Company decided to discontinue its internet operations (see further
discussion at Note (3)).

Principles of Consolidation and Presentation

     The accompanying consolidated financial statements include Citadel
Broadcasting Company and, until its merger on December 28, 1999, its
wholly-owned subsidiary, Citadel License, Inc. (collectively referred to as the
"Company"). All significant intercompany balances and transactions have been
eliminated in consolidation.

Use of Estimates

     Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities, revenue and expenses and
the disclosure of contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting principles. Actual
results could differ from those estimates.

Cash and Cash Equivalents

     The Company considers all highly liquid investments with a maturity of
three months or less at the time of purchase to be cash equivalents.

Restricted Cash

     On November 9, 1999, the Company sold 18 FM and 7 AM radio stations to
Marathon Media, L.P. for approximately $26.0 million. The cash received from
this sale plus accrued interest is classified as restricted cash on the
Company's balance sheet as of December 31, 1999. These funds must be utilized as
part of the purchase price of the Broadcasting Partners Holdings, L.P.
acquisition (see acquisitions and dispositions, Note (2) for further details).

Derivative Financial Instruments

     During 1998 and 1999, the Company utilized an interest rate swap agreement
to hedge the effects of fluctuations in interest rates. Amounts receivable or
payable due to settlement of the interest rate swap agreement were recognized as
interest expense or income on a monthly basis. A mark-to-market adjustment was
recorded as a component of shareholders' equity to reflect the fair value of the
interest rate swap agreement. The interest rate swap agreement expired in
December of 1999.

                                       F-7
<PAGE>   64
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Property and Equipment

     Assets acquired in business combinations are accounted for using the
purchase method of accounting and are recorded at their estimated fair value
upon acquisition as determined by management or by independent appraisal.
Property and equipment additions are recorded at cost. Depreciation of property
and equipment is determined using the straight-line method over the estimated
useful lives of the related assets. Leasehold improvements are capitalized and
depreciated straight-line over the shorter of the lease terms or the estimated
useful lives of the assets. Maintenance and repairs are expensed as incurred.

Intangible Assets

     Intangible assets with determinable lives have been allocated among various
categories of customer-based or market-based intangibles at their estimated fair
value upon acquisition as determined by management or by independent appraisal.
Goodwill represents the excess of cost over the fair value of tangible assets
and intangible assets with determinable lives.

     Amortization is provided on the straight-line method over the estimated
useful lives of the related assets. Other intangible assets are comprised of
acquisition costs, agreements not to compete, broadcast licenses, subscriber
lists, premium lease space and subcarrier antenna income. Pending acquisition
costs are deferred and capitalized as part of completed acquisitions or expensed
in the period in which the pending acquisition is terminated. The Company's
policy is to write off intangible assets once they have become fully amortized.

Debt Issuance Costs

     The costs related to the issuance of debt are capitalized and amortized to
interest expense using the effective interest method over the lives of the
related debt.

Income Taxes

     The Company utilizes the asset and liability method of accounting for
income taxes. Under the asset and liability method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

Earnings Per Share

     Basic earnings (loss) per share is computed by dividing income (loss)
available to common shares by the weighted-average number of common shares
outstanding for the period. Diluted earnings (loss) per share reflects the
potential dilution that could occur if securities or contracts to issue common
stock were exercised or converted into common stock or resulted in the issuance
of common stock that then shared in the earnings of the Company. For the years
ended December 31, 1997, 1998 and 1999, the Company had no securities or
contracts to issue common stock.

Revenue Recognition

     Broadcasting operations derive revenue from the sale of program time and
commercial announcements to local, regional and national advertisers. Revenue is
recognized when the programs and commercial announcements are broadcast. On-line
service revenue derived from the internet service provider is recognized over
the period in which the services are provided.
                                       F-8
<PAGE>   65
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Barter Transactions

     Barter contracts are agreements entered into under which the Company
provides commercial air time in exchange for goods and services used principally
for promotional, sales and other business activities. An asset and liability are
recorded at the fair market value of the advertising surrendered based on the
Company's historical practice of receiving cash for such advertising. Revenue is
recorded and the liability is relieved when commercials are broadcast and
expense is recorded and the asset is relieved when goods or services are used.

Comprehensive Loss

     As of January 1, 1998, the Company adopted SFAS No. 130 "Reporting
Comprehensive Income." SFAS No. 130 establishes standards for the reporting of
comprehensive loss and its components; however, the adoption of SFAS No. 130 had
no impact on the Company's net loss or shareholders' equity. SFAS No. 130
requires the reporting of a mark-to-market adjustment pertaining to a hedging
contract which is recorded in shareholders' equity as a component of
comprehensive loss.

Local Marketing Agreements

     Fees earned or incurred pursuant to various local marketing agreements
("LMA") are recognized as gross broadcasting revenue or station operating
expenses, respectively, in the period that the services performed or received
occur. The Company's consolidated financial statements include broadcasting
revenue and station operating expenses of stations marketed under LMAs.

Joint Sales Agreements

     Fees earned or incurred pursuant to various joint sales agreements ("JSA")
are recognized pursuant to the terms in the various agreements under one of two
methods: (a) the JSA fee is recognized as a reduction to sales expense (included
in station operating expenses in the Company's consolidated statements of
operations), or (b) the Company is allocated a percentage of the JSA stations'
net revenue and operating expenses and these amounts are recognized as
broadcasting revenue and station operating expenses, respectively, in the period
earned or incurred.

Business and Credit Concentrations

     In the opinion of management, credit risk with respect to receivables is
limited due to the large number of customers and the geographic diversification
of the Company's customer base. The Company performs credit evaluations of its
customers and believes that adequate allowances for any uncollectable
receivables are maintained. At December 31, 1998 and 1999, no receivable from
any customer exceeded five percent of gross accounts receivable nor did any
customer's account exceed more than ten percent of net broadcasting revenue for
any of the periods presented.

Impairment Recognition

     Management evaluates the carrying value of all long-lived assets under the
provisions of SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of." This statement requires that
long-lived assets and certain identifiable intangibles be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future undiscounted net cash flows expected to be generated by the asset. If
such assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds fair
value of the assets. Assets to be disposed of are reported at the lower of the
carrying amount or fair

                                       F-9
<PAGE>   66
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

value less costs to sell. Based on its most recent analysis, management believes
that no material impairment in the value of long-lived assets existed at
December 31, 1999.

Reclassifications

     Certain 1997 and 1998 balances have been reclassified to conform to the
1999 presentation.

(2)  ACQUISITIONS AND DISPOSITIONS

                       1999 ACQUISITIONS AND DISPOSITIONS

1999 Acquisitions

     During 1999, the Company acquired the assets of 42 FM and 15 AM radio
stations and one internet service provider from various parties as follows:

<TABLE>
<CAPTION>
                                                                                                 PURCHASE
    ACQUISITION DATE               SELLER             STATIONS           MARKET SERVED            PRICE
------------------------  ------------------------  -------------  -------------------------  --------------
                                                                                              (IN THOUSANDS)
<S>                       <C>                       <C>            <C>                        <C>
RADIO STATIONS:
January 4, 1999.........  Fairview Communications,  1 FM           Wilkes-Barre/Scranton, PA     $ 1,276
                          Inc.
February 9, 1999........  62nd Street Broadcasting  5 FM and 1 AM  Saginaw, MI                    35,000
                          of Saginaw, L.L.C.
February 17, 1999.......  Zeve Broadcasting         1 FM and 1 AM  Harrisburg/Carlisle, PA         4,500
                          Company
March 17, 1999..........  Citywide Communications,  3 FM and 2 AM  Baton Rouge, LA                31,500
                          Inc                       3 FM and 1 AM  Lafayette, LA
April 30, 1999..........  Capstar Broadcasting      1 FM and 2 AM  Colorado Springs, CO           10,000
                          Company                   1 FM and 1 AM  Spokane, WA
May 3, 1999.............  AGM-Nevada, LLC           1 FM           Spokane, WA                     4,150
May 3, 1999.............  Monroe and Delaware       1 FM           Wilkes-Barre/Scranton, PA         995
                          Holdings, Inc.
June 30, 1999...........  Wicks Broadcast Group     3 FM and 2 AM  Binghamton, NY                 77,000
                          Limited Partnership and   5 FM and 3 AM  Charleston, SC
                          Affiliates                1 FM           Kokomo, IN
                                                    1 FM and 1 AM  Muncie, IN
August 31, 1999.........  Fuller-Jeffery            6 FM           Portland, ME                   63,500
                          Broadcasting Companies,   4 FM           Portsmouth, NH
                          Inc.
November 1, 1999........  KTBT Radio Broadcasting   1 FM           Baton Rouge, LA                 9,500
                          Co
December 23, 1999.......  Caribou Communications    4 FM and 1 AM  Oklahoma City, OK              60,000
                          Company

INTERNET SERVICE PROVIDERS:
March 1, 1999...........  Brainiac Services, Inc    N/A            Rhode Island                      288
</TABLE>

     The acquisitions were accounted for by the purchase method of accounting
and, accordingly, each purchase price was allocated to current assets as well as
noncurrent tangible and intangible assets based on their fair values as
determined by management. The acquisitions were funded with borrowings under the
credit facility and

                                      F-10
<PAGE>   67
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

proceeds from capital contributions received from Citadel Communications. The
aggregate purchase price, including acquisition costs of $6,968,000, was
allocated as follows (numbers shown in thousands):

<TABLE>
<S>                                                          <C>
Property and equipment.....................................    25,852
Intangible assets..........................................   275,275
Other assets...............................................     3,550
                                                             --------
                                                             $304,677
                                                             ========
</TABLE>

1999 Dispositions

     On April 30, 1999, the Company disposed of the assets of one FM station in
Colorado Springs, Colorado in exchange for one other FM station in Colorado
Springs owned by Capstar Broadcasting Company.

     On November 9, 1999, the Company sold the assets of two FM and one AM
station in Eugene, OR, four FM and two AM stations in Medford, OR, four FM and
one AM station in Tri-Cities, WA, four FM and one AM station in Billings, MT,
two FM stations in Johnstown, PA and two FM and two AM stations in State
College, PA to Marathon Media for the sale price of approximately $26.0 million.
A loss of approximately $.9 million was recognized on the sale.

                       1998 ACQUISITIONS AND DISPOSITIONS

1998 Acquisitions

     During 1998, the Company acquired the assets of seven FM and four AM radio
stations and five internet service providers from various parties as follows:

<TABLE>
<CAPTION>
                                                                                                 PURCHASE
    ACQUISITION DATE               SELLER             STATIONS           MARKET SERVED            PRICE
------------------------  ------------------------  -------------  -------------------------  --------------
                                                                                              (IN THOUSANDS)
<S>                       <C>                       <C>            <C>                        <C>
RADIO STATIONS:
January 2, 1998.........  Endless Mountain          1 FM and 1 AM  Wilkes-Barre/Scranton, PA     $   815
                          Broadcasting, Inc.
February 12, 1998.......  Pacific Northwest         2 FM and 1 AM  Boise, ID                      14,400
                          Broadcasting Corporation
March 26, 1998..........  S&P Broadcasting Limited  2 FM and 1 AM  Wilkes-Barre/Scranton, PA       6,000
                          Partnerships
April 21, 1998..........  Wilson Group, LLC         2 FM           Boise, ID                      14,506
November 17, 1998.......  Beasley Broadcasting of   1 AM           Little Rock, AR                 5,108
                          Arkansas, Inc.
INTERNET SERVICE PROVIDERS:
September 18, 1998......  Digital Planet, L.C.      N/A            Salt Lake City, UT                225
September 29, 1998......  Internet Tech. Systems,   N/A            Salt Lake City, UT              1,535
                          Inc
October 15, 1998........  In Quo                    N/A            Salt Lake City, UT                335
October 26, 1998........  The Johnson Connection,   N/A            Salt Lake City, UT                320
                          LLC
December 8, 1998........  The Friendly Net, LLC     N/A            Salt Lake City, UT                 93
</TABLE>

     The acquisitions were accounted for by the purchase method of accounting
and, accordingly, the purchase price was allocated to current assets as well as
noncurrent tangible and intangible assets based on their fair values

                                      F-11
<PAGE>   68
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

as determined by management. The acquisitions were funded with proceeds from
debt. The aggregate purchase price, including acquisition costs of $1,242,000,
was allocated as follows (numbers shown in thousands):

<TABLE>
<S>                                                          <C>
Property and equipment.....................................  $ 3,477
Intangible assets..........................................   41,031
Other assets...............................................       71
                                                             -------
                                                             $44,579
                                                             =======
</TABLE>

1998 Dispositions

     In October 1998, the Company sold the assets of WQCY-FM, WTAD-AM, WBJR-FM
and WMOS-FM in Quincy, Illinois for approximately $2.3 million. A gain of
approximately $1.3 million was recognized on the sale.

     In November 1998, the Company sold the assets of KRNN-AM in Little Rock,
Arkansas for approximately $190,000. A loss of approximately $5,000 was
recognized on the sale.

     In October 1997, the Company entered into an agreement pursuant to which
the Company acquired WLEV-FM in exchange for approximately $23.0 million in cash
and the FCC license and studio equipment of WEST-AM. Pending FCC approval, the
disposition of WEST-AM was not recorded until the third quarter of 1998. The
disposition of WEST-AM was recorded as a purchase price adjustment aggregating
approximately $463,000.

Pro Forma

     The following summary, prepared on a pro forma basis, presents the results
of operations as if all the above radio station acquisitions and dispositions
had been completed as of January 1, 1998.

<TABLE>
<CAPTION>
                                                             UNAUDITED
                                                    ----------------------------
                                                     YEAR ENDED      YEAR ENDED
                                                    DECEMBER 31,    DECEMBER 31,
                                                        1998            1999
                                                    ------------    ------------
                                                           (IN THOUSANDS)
<S>                                                 <C>             <C>
Net broadcasting revenue..........................    $174,449        $199,089
Operating income..................................       5,950          16,482
Net loss from continuing operations...............     (11,539)        (12,543)
</TABLE>

     The pro forma results are not necessarily indicative of what actually would
have occurred if the radio stations had been owned for the entire periods
presented. In addition, they are not intended to be a projection of future
results and do not reflect any synergies that might be achieved from combined
operations.

Pending Acquisitions

     On October 5, 1999, the Company entered into a purchase and sale agreement
with Kenneth A. Rushton, as Trustee of the Chapter 7 Bankruptcy Estate of
Venture Broadcasting, Inc., to acquire one AM radio station serving Salt Lake
City, Utah. The purchase price for the station and a related tower site is
approximately $0.6 million in cash, which the Company has placed in an escrow
account.

     On October 8, 1999, the Company entered into an exchange agreement with
Titus Broadcasting Systems, Inc. to acquire one AM radio station in Binghamton,
New York in exchange for one AM station in Binghamton owned by the Company and
approximately $.6 million in cash.

     On October 27, 1999, the Company entered into a definitive agreement to
acquire from Broadcasting Partners Holdings, L.P. and its affiliates the assets
of 36 radio stations in 11 markets for approximately $190.0 million in cash.
Upon consummation of the agreement, including the completion of pending
acquisitions

                                      F-12
<PAGE>   69
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

by the selling entities, Citadel Broadcasting will acquire five stations in
Buffalo, New York; four stations in Syracuse, New York; three stations in
Atlantic City, New Jersey; five stations in Tyler-Longview, Texas; three
stations in New London, Connecticut; two stations in New Bedford, Massachusetts;
four stations in Monroe, Louisiana; four stations in Augusta-Waterville, Maine;
two stations in Ithaca, New York; three stations in Presque Isle-Caribou, Maine;
one station in Dennysville-Calais, Maine as well as the right to operate an
additional FM radio station in Atlantic City/Cape May under a program service
and time brokerage agreement and the right to sell advertising in the United
States for one FM radio station in Niagra Falls, Ontario under a joint sales
agreement.

     On November 16, 1999, the Company entered into a definitive agreement with
KSMB/KACY Radio Broadcasting Company, KVOL Radio Broadcasting Company and Powell
Broadcasting Company, Inc. to acquire two FM and two AM radio stations in
Lafayette, Louisiana for the purchase price of approximately $8.5 million in
cash.

     On November 16, 1999, the Company entered into an exchange agreement with
LifeTalk Broadcasting Association to acquire one AM radio station in
Albuquerque, New Mexico in exchange for one AM radio station in Albuquerque
owned by the Company and approximately $5.4 million in cash, of which, the
Company has prepaid $1.0 million.

     On December 3, 1999, the Company entered into an asset purchase agreement
with Liggett Broadcast, Inc. and certain of its affiliates to acquire four FM
and two AM radio stations serving the Lansing, Michigan market, two FM radio
stations serving the Saginaw, Michigan market and one FM radio station serving
the Flint, Michigan market for the aggregate purchase price of approximately
$120.5 million, consisting of 200,000 shares of common stock of Citadel
Communications valued at $50.375 per share, based on the closing share price of
the common stock on December 2, 1999, and approximately $110.4 million in cash.
However, if the value of the common stock at the time of closing, based on the
20-day average closing sale price per share prior to closing, is less than 90%
of the value on December 2, 1999, then no common stock will be issued and the
purchase price will be paid entirely in cash.

     On December 3, 1999, the Company entered into two asset purchase agreements
to acquire a total of two FM radio stations serving the Worcester, Massachusetts
market for an aggregate purchase price of approximately $24.5 million in cash.

     On December 21, 1999 the Company entered into an asset purchase agreement
to acquire one FM radio station serving the Worcester, Massachusetts market for
the purchase price of approximately $14.3 million in cash.

     The pending acquisitions are all subject to various conditions to closing,
including Federal Communications Commission approval.

(3)  DISCONTINUED OPERATIONS

     In December of 1999, the Company's management decided to discontinue the
operations of its internet service provider, eFortress. As a result of this
decision, the Company has adopted a plan for the disposition by sale of
eFortress. This plan includes the sale of subscribers and all related internet
service equipment. The

                                      F-13
<PAGE>   70
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Company is currently in negotiations with other internet service providers and
anticipates finalizing the sale by the end of the second quarter of 2000.

     eFortress has been accounted for as a discontinued operation and,
accordingly, its results of operations and financial position are segregated for
all periods presented in the accompanying consolidated financial statements.
Revenue, related losses and income taxes associated with the discontinued
operations are as follows:

<TABLE>
<CAPTION>
                                                           1997      1998      1999
                                                           -----    ------    -------
<S>                                                        <C>      <C>       <C>
Revenue..................................................  $ 555    $2,114    $ 4,488
                                                           -----    ------    -------
Income (loss) from discontinued operations before
  taxes..................................................   (102)       30     (4,437)
Income tax expense (benefit).............................     --         9       (162)
                                                           -----    ------    -------
Income (loss) from discontinued operations, net of
  taxes..................................................  $(102)   $   21    $(4,275)
                                                           =====    ======    =======
</TABLE>

     The net assets of the discontinued operations at December 31, 1998 and 1999
have been reclassified in the accompanying consolidated balance sheet as
follows:

<TABLE>
<CAPTION>
                                                          1998      1999
                                                         ------    ------
                                                          (IN THOUSANDS)
<S>                                                      <C>       <C>
Accounts receivable, net...............................  $  524    $   42
Other current assets...................................     187         3
Property and equipment, net............................   1,056     1,522
Intangibles, net.......................................   2,344     2,085
Current liabilities....................................    (493)   (1,377)
                                                         ------    ------
Net assets of discontinued operations..................  $3,618    $2,275
                                                         ======    ======
</TABLE>

(4)  ASSETS HELD FOR SALE

     On January 13, 1999, the Company entered into an agreement to sell
substantially all of the assets of the Company's 18 FM and 7 AM radio stations
serving the markets of Eugene, Oregon; Medford, Oregon; Tri-Cities, Washington;
Billings, Montana; Johnstown, Pennsylvania and State College, Pennsylvania for
an aggregate purchase price of approximately $26.0 million. On November 9, 1999,
the Company completed the sale and recognized a loss of approximately $.9
million.

     As of December 31, 1998, the net assets of the radio stations are presented
in the accompanying consolidated balance sheet as "Assets held for sale".

                                      F-14
<PAGE>   71
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(5)  PROPERTY AND EQUIPMENT

     Property and equipment at December 31, 1998 and 1999 consists of the
following:

<TABLE>
<CAPTION>
                                                                             ESTIMATED
                                                      1998        1999      USEFUL LIFE
                                                    --------    --------    -----------
                                                       (IN THOUSANDS)
<S>                                                 <C>         <C>         <C>
Land..............................................  $  3,891    $  5,257            --
Buildings and improvements........................     6,843      16,894    5-30 years
Transmitters, towers and equipment................    27,929      45,805    5-15 years
Office furniture and equipment....................     5,827       8,247     3-5 years
Airplane..........................................        --       9,131       5 years
Construction in progress..........................     1,078       1,316            --
                                                    --------    --------
                                                      45,568      86,650
Less accumulated depreciation and amortization....   (12,539)    (18,615)
                                                    --------    --------
                                                    $ 33,029    $ 68,035
                                                    ========    ========
</TABLE>

(6)  INTANGIBLE ASSETS

     Intangible assets at December 31, 1998 and 1999 consist of the following:

<TABLE>
<CAPTION>
                                                                             ESTIMATED
                                                      1998        1999      USEFUL LIFE
                                                    --------    --------    -----------
                                                       (IN THOUSANDS)
<S>                                                 <C>         <C>         <C>
Goodwill and broadcasting licenses................  $297,641    $594,801      15 years
Noncompetition agreements.........................     2,064       5,929     3-7 years
Premium lease space...............................        50          50    1-13 years
Subcarrier antenna income.........................       104         104     1-4 years
                                                    --------    --------
                                                     299,859     600,884
Less accumulated amortization.....................   (33,413)    (62,220)
                                                    --------    --------
                                                    $266,446    $538,664
                                                    ========    ========
</TABLE>

(7)  ACCRUED LIABILITIES

     Accrued liabilities at December 31, 1998 and 1999 consist of the following:

<TABLE>
<CAPTION>
                                                               1998       1999
                                                              -------    -------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
Interest....................................................  $ 6,417    $ 6,815
Music license fees..........................................      170        262
Compensation and commissions................................    3,104      2,170
Other.......................................................    1,178      4,097
                                                              -------    -------
                                                              $10,869    $13,344
                                                              =======    =======
</TABLE>

(8)  NOTE PAYABLE

     On July 3, 1997, the Company entered into an amended and restated financing
agreement which originally allowed for revolving loan borrowings up to a maximum
of $150.0 million. Pursuant to the agreement, this amount began to reduce
quarterly on December 31, 1997.

                                      F-15
<PAGE>   72
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     On December 17, 1999, the Company terminated the July 3, 1997 financing
agreement, repaid all amounts borrowed under the agreement and entered into a
new credit facility ("Senior Credit Facility"), which provides for the making of
term loans at any time during the period from December 17, 1999 to December 15,
2000, in an aggregate principal amount not in excess of $250.0 million and
revolving loans at any time and from time to time prior to March 31, 2007
(subject to extension to December 31, 2007), in an aggregate principal amount at
any one time outstanding not in excess of $150.0 million. Of the $150.0 million
which is available in the form of revolving loans under the revolving credit
facility, until March 31, 2000, up to $75.0 million of the revolving credit
facility may be made available in the form of letters of credit. In addition,
the Company may request up to $300.0 million in additional term loans, which
term loans may be made at the sole discretion of the lenders. Of such additional
$300.0 million amount, at the request of the Company, up to $100.0 million may
be in the form of an increase in the $150.0 million revolving credit commitment.
The lenders are under no obligation to make such additional $300.0 million
available, whether in the form of term loans, revolving loans or otherwise.

     Amounts borrowed under the Senior Credit Facility bear interest at a rate
equal to an applicable margin (described below) plus either (a) the greater of
the prime rate of interest announced from time to time by Credit Suisse First
Boston, New York, New York, and the federal funds effective rate in effect from
time to time plus 0.5%, or (b) if the Company so elects, the LIBO rate divided
by one minus the eurocurrency reserve requirements prescribed by the Federal
Reserve Board or other governmental body in effect from time to time. The
applicable margin is expected to range between 0% and 1.5% for the rate
discussed in clause (a) above and between 0.75% and 2.5% for the rate discussed
in clause (b) above. Interest is payable quarterly for prime rate loans and for
LIBO loans, interest payment dates can be monthly, quarterly or semi-annually.

     Draws may be made under the term loans facility solely to finance a portion
of the acquisitions currently planned by the Company, to finance a portion of
future permitted acquisitions and to pay related fees and expenses. The amount
of any term loans outstanding on December 17, 2002 must be repaid in varying
quarterly installments ranging from 3.75% of the amount on March 31, 2003 to
6.25% of the amount on March 31, 2007.

     The letter of credit facility, which is a sub facility of the revolving
credit facility, provides for the issuance of letters of credit to be used by
the Company as security for the obligations of the Company under agreements
entered into in connection with certain radio station acquisitions and for any
other purpose related to the business of the Company. On December 31, 1999,
letters of credit in the aggregate amount of approximately $20.4 million were
issued and outstanding.

     At December 31, 1999, the Company's outstanding balance under the Senior
Credit Facility was $132.0 million. Interest is payable at 8.125% as of December
31, 1999. As of December 31, 1998, the Company did not have an outstanding
balance under the July 3, 1997 financing agreement.

     The Senior Credit Facility is secured by a pledge of property and equipment
and the common stock of Citadel Broadcasting. Various debt covenants place
restrictions on, among other things, indebtedness, acquisitions, dividends,
capital expenditures and the sale or transfer of assets. The debt covenant
provisions also include certain financial ratio covenants, such as maximum
leverage test, minimum interest coverage test and minimum fixed charges coverage
test. At December 31, 1999, the Company was in compliance with all debt covenant
provisions.

(9)  SENIOR SUBORDINATED NOTES PAYABLE

     On July 3, 1997, the Company completed the issuance of $101.0 million of
its 10 1/4% Senior Subordinated Notes ("1997 Notes") due 2007. Interest is
payable semi-annually. The 1997 Notes will be redeemable at the

                                      F-16
<PAGE>   73
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

option of the Company, in whole or in part, at any time on or after July 1, 2002
at a redemption price as stated in the following percentages:

<TABLE>
<CAPTION>
                                                             REDEMPTION
                                                               PRICE
                                                             ----------
<S>                                                          <C>
2002.......................................................   105.125%
2003.......................................................   104.100%
2004.......................................................   103.075%
2005.......................................................   102.050%
2006.......................................................   101.025%
</TABLE>

     In addition, at any time prior to July 1, 2000, subject to certain
conditions, the Company may, at its option, redeem a portion of the 1997 Notes
with the net proceeds of one or more Public Equity Offerings (as defined in the
indenture governing the 1997 Notes), at a redemption price equal to 110.25% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
date of redemption. The 1997 Notes are shown net of unamortized discount of $2.3
million at December 31, 1999.

     The indenture governing the 1997 Notes contains certain restrictive
covenants, including limitations which restrict the ability of the Company to
incur additional debt, incur liens, pay dividends or make certain other
restricted payments, consummate certain asset sales, enter into certain
transactions with affiliates, merge or consolidate with any other person or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets. At December 31, 1999, the Company was in
compliance with all debt covenants.

     On November 19, 1998, the Company completed the issuance of $115.0 million
of its 9 1/4% Senior Subordinated Notes ("1998 Notes") due in 2008. The 1998
Notes may be redeemed at the option of the Company, in whole or in part, at any
time on or after November 15, 2003 at a redemption price as stated in the
following percentages:

<TABLE>
<CAPTION>
                                                             REDEMPTION
                                                               PRICE
                                                             ----------
<S>                                                          <C>
2003.......................................................   104.625%
2004.......................................................   103.083%
2005.......................................................   101.541%
2006.......................................................   100.000%
</TABLE>

     In addition, at any time prior to November 15, 2001, the Company may, at
its option, redeem a portion of the 1998 Notes with the net proceeds of one or
more Public Equity Offerings (as defined in the indenture governing the 1998
Notes), at a redemption price equal to 109.25% of the principal amount thereof,
together with accrued and unpaid interest, if any, to the redemption date. The
1998 Notes are shown net of unamortized discount of $3.2 million at December 31,
1999.

     The indenture governing the 1998 Notes contains certain restrictive
covenants, including limitations which restrict the ability of the Company to
incur additional debt, incur liens, pay cash dividends, purchase the Company's
common stock or make certain other restricted payments, consummate certain asset
sales, enter into certain transactions with affiliates, merge or consolidate
with any other person or sell, assign, transfer, lease,

                                      F-17
<PAGE>   74
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

convey or otherwise dispose of all or substantially all of its assets. At
December 31, 1999, the Company was in compliance with all covenants.

     The aggregate Senior Subordinated Notes payable at December 31, 1999 are as
follows:

<TABLE>
<CAPTION>
                                                               1998       1999
                                                             --------   --------
                                                               (IN THOUSANDS)
<S>                                                          <C>        <C>
1997 Notes.................................................  $101,000    101,000
1998 Notes.................................................   115,000    115,000
                                                             --------   --------
                                                              216,000    216,000
Less unamortized discount..................................    (5,909)    (5,491)
                                                             --------   --------
                                                             $210,091    210,509
                                                             ========   ========
</TABLE>

(10)  OTHER LONG-TERM OBLIGATIONS

     Other long-term obligations at December 31, 1998 and 1999 consist of the
following:

<TABLE>
<CAPTION>
                                                               1998      1999
                                                              ------    ------
                                                               (IN THOUSANDS)
<S>                                                           <C>       <C>
Various noncompetition and consulting agreements with the
  sellers of radio stations acquired, due at various dates
  through August 2006, face amount of $579,000 and
  $3,478,000 at December 31, 1998 and 1999, respectively,
  non-interest bearing with interest imputed at 8.0% to
  9.0%, net of discount of $77,000 and $660,000 in 1998 and
  1999 respectively.........................................  $  503    $2,818
Prepayment premium on extinguishment of debt................     683        --
Capital leases..............................................      22        40
Other.......................................................      --       500
                                                              ------    ------
                                                               1,208     3,358
Less current maturities.....................................    (168)     (842)
                                                              ------    ------
Long-term portion...........................................  $1,040    $2,516
                                                              ======    ======
</TABLE>

     The required aggregate principal payments as of December 31, 1999,
excluding the amortization of debt discount, are as follows:

<TABLE>
<CAPTION>
                                                             (IN THOUSANDS)
<S>                                                          <C>
2000.......................................................      $  842
2001.......................................................         762
2002.......................................................         477
2003.......................................................         439
2004.......................................................         449
Thereafter.................................................         389
                                                                 ------
                                                                 $3,358
                                                                 ======
</TABLE>

(11)  SHAREHOLDER'S EQUITY

     On July 7, 1998, the Company's parent, Citadel Communications, consummated
an initial public offering (the "IPO") of 6,880,796 shares of its common stock
at an initial public offering price of $16.00 per share. Of such shares,
6,250,000 shares were sold by Citadel Communications and 630,796 shares were
sold by certain stockholders of Citadel Communications. On July 14, 1998,
Citadel Communications sold an additional

                                      F-18
<PAGE>   75
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1,032,119 shares of its common stock at the initial public offering price
pursuant to the exercise of the underwriters' over-allotment option. Total
proceeds of the IPO, including proceeds for the shares issued upon the exercise
of the over-allotment option, were approximately $126.6 million, of which total
proceeds to Citadel Communications were approximately $106.6 million, total
proceeds to the selling stockholders were approximately $9.4 million and total
underwriting discounts, commissions and costs were approximately $10.6 million.

     On June 25, 1999, Citadel Communications completed a stock offering of
11,500,000 shares of its common stock at $29.95 per share. Of such shares,
5,000,000 shares were sold by Citadel Communications and 6,500,000 shares were
sold by certain stockholders of Citadel Communications. Total proceeds of the
offering, net of underwriting discounts and commissions, were approximately
$322.9 million of which proceeds to Citadel Communications were approximately
$140.4 million and proceeds to the selling stockholders were approximately
$182.5 million. Total underwriting discounts and commissions were approximately
$13.5 million.

     On the same date as the stock offering, Citadel Communications purchased
5,000 shares of common stock of the Company for an aggregate purchase price of
approximately $51.7 million and contributed approximately $88.7 million of
additional paid in capital to the Company. The purchase of stock and additional
capital contributions were funded by the net proceeds from Citadel
Communications' stock offering. The Company utilized a portion of the proceeds
to redeem approximately 35% of its 13 1/4% exchangeable preferred stock (see
Note (12)).

     Net capital contributions to the Company from Citadel Communications are
shown in the accompanying consolidated statements of shareholder's equity, and
represent the net contributions received by the Company for (i) the issuance of
preferred stock and the exercise of common stock options in 1997, (ii) the
exercise of common stock options in 1998, and (iii) issuance of common stock and
the exercise of common stock options in 1999.

Deferred Compensation

     In September 1998, Citadel Communications entered into stock option award
agreements with several key employees. The terms of the agreements provide for
114,000 options to purchase new common stock at an exercise price of $16.00 per
share which vest over a five-year period. The fair market value on the date of
grant was $25.813 per share. Accordingly, the Company is amortizing to
compensation expense $1.1 million ratably over the five-year vesting period,
which represents the difference between the exercise price and fair market
value. The Company recognized compensation expense under the agreements of
approximately $74,000 and $224,000 for the years ended December 31, 1998 and
1999, respectively.

     In July of 1999, the shareholders of Citadel Communications approved
Citadel Communications' 1999 Long-Term Incentive Plan, (the "1999 Incentive
Plan"), which is intended to be the primary long-term incentive vehicle for
senior management. Under the 1999 Incentive Plan, each participant receives an
option to acquire a certain number of shares of common stock based on meeting
certain stock price performance criteria and once the criteria has been met, the
options vest over five years. The exercise price of options granted is $29.25
per share. During the performance period, the shares subject to the option are
earned in one-fifth increments for each increase in average stock price (with
the average calculated over 20 consecutive trading days) equal to one-fifth of
the difference between the option's doubled exercise price and the option
exercise price.

     A total of 1,750,000 options to purchase common stock at an exercise price
of $29.25 were authorized under the 1999 Incentive Plan. As of December 31,
1999, 1,400,000 or four-fifths of the options had met the performance criteria.
The difference between the exercise price of the options and the fair market
value of Citadel Communications' common stock, which ranged between $36.50 and
$60.00 per share, at the date the options met the performance criteria has been
recorded as deferred compensation of approximately $27.6 million. The
compensation expense is amortized over the five year vesting period. The Company
recognized compensation expense of approximately $1,503,000 for the year ended
December 31, 1999.

                                      F-19
<PAGE>   76
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(12)  EXCHANGEABLE PREFERRED STOCK

     On July 3, 1997, the Company completed the sale of 1,000,000 shares of
13 1/4% Exchangeable Preferred Stock ("Exchangeable Preferred Stock") for $100.0
million. The Exchangeable Preferred Stock has a liquidation preference of $100
per share, plus accumulated and unpaid dividends. Dividends on the Exchangeable
Preferred Stock accrue at the rate of 13 1/4% per annum and are payable
semi-annually on January 1 and July 1 of each year, commencing January 1, 1998.
On or prior to July 1, 2002, dividends are payable in additional shares of
Exchangeable Preferred Stock having an aggregate liquidation preference equal to
the amount of such dividends, or, at the option of the Company, in cash.
Thereafter, all dividends will be payable only in cash. The Company will be
required to redeem the Exchangeable Preferred Stock on July 1, 2009 (subject to
the legal availability of funds therefore) at a redemption price equal to the
liquidation preference thereof, plus accumulated and unpaid dividends, if any,
to the date of redemption.

     On August 2, 1999, the Company redeemed approximately 35% of its issued and
outstanding 13 1/4% exchangeable preferred stock. Total shares redeemed were
approximately 452,000 at a redemption price of $113.25 per share for a total of
approximately $51.2 million. In addition, the Company paid approximately $0.5
million of accrued dividends on the redeemed shares.

     The Exchangeable Preferred Stock is presented net of unamortized issuance
costs of approximately $4.4 million and $4.2 million at December 31, 1998 and
1999, respectively. The Exchangeable Preferred Stock includes accrued dividends
at December 31, 1999 of approximately $5.6 million which were paid in 55,621
additional shares of Exchangeable Preferred Stock on January 1, 2000. During
1999, dividends were paid in 75,267 additional shares on January 1, 1999 and
80,253 additional shares on July 1, 1999. At December 31, 1998 and 1999,
1,136,104 and 839,556 shares were issued and outstanding.

     The Certificate of Designation for the Exchangeable Preferred Stock
contains certain covenants, which, among other things, restrict the ability of
the Company with respect to: (i) the incurrence of additional debt; (ii)
restricted payments; (iii) issuances and sales of stock of certain subsidiaries;
and (iv) consolidations, mergers or sales of assets. The Company was in
compliance with these covenants at December 31, 1999.

(13)  INCOME TAXES

     The Company is included in the consolidated tax returns of Citadel
Communications and calculates its tax provision or benefit as though it filed a
separate return. For the year ended December 31, 1997, the Company generated a
net loss for both financial reporting and income tax purposes; therefore, no
current tax provision has been recorded. The income tax benefit in 1997, 1998
and 1999 represents the reversal of deferred tax liabilities established at the
date of acquisition due to differences in the tax bases and the financial
statement carrying amounts of intangibles and fixed assets acquired in
stock-based acquisitions offset by federal alternative minimum tax and state tax
expense. At December 31, 1999, Citadel Communications has net operating loss
carry forwards for federal income tax purposes of approximately $42.2 million,
which begin to expire in 2011.

     On June 28, 1996, Citadel Communications underwent an ownership change in
accordance with Section 382 of the Internal Revenue Code. Due to this change,
the net operating losses of Citadel Communications generated prior to the date
of the ownership change is subject to limitation in future years. The
approximate amount of the net operating losses, which are limited at December
31, 1999, is $2.1 million, which may be used in the year 2000.

     On June 25, 1999, Citadel Communications underwent an additional ownership
change in accordance with Section 382 of the Internal Revenue Code. However, the
net operating loss limitation exceeded Citadel Communications' net operating
losses and therefore no additional limitation will be imposed on Citadel
Communications' net operating losses.

                                      F-20
<PAGE>   77
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The components of the Company's income tax benefit for the year ended
December 31, 1997, 1998 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                          1997      1998       1999
                                                          -----    -------    -------
                                                                (IN THOUSANDS)
<S>                                                       <C>      <C>        <C>
Current tax expense:
  Federal...............................................  $  --    $    87    $   143
  State.................................................     --        324        803
                                                          -----    -------    -------
                                                             --        411        946
                                                          -----    -------    -------
Deferred tax benefit:
  Federal...............................................   (654)    (1,535)    (2,204)
  State.................................................   (116)      (271)      (389)
                                                          -----    -------    -------
                                                           (770)    (1,806)    (2,593)
                                                          -----    -------    -------
Total income tax benefit................................  $(770)   $(1,395)   $(1,647)
                                                          =====    =======    =======
</TABLE>

     A reconciliation of the Company's income tax benefit as compared to the tax
benefit calculated by applying the federal statutory rate (34%) to the loss from
continuing operations before income taxes for the years ended December 31, 1997,
1998 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                          1997       1998       1999
                                                         -------    -------    -------
                                                                (IN THOUSANDS)
<S>                                                      <C>        <C>        <C>
Federal statutory rate applied to the loss from
  continuing operations before income taxes............  $(1,856)   $(1,818)   $(2,142)
State tax, net of federal benefit......................       --        214        530
Amortization of goodwill...............................      425        778      1,045
Nondeductible meals and entertainment..................       51         88         78
Effect of the ability to utilize net operating loss
  carry forwards.......................................      680       (667)    (1,158)
Other..................................................      (70)        10         --
                                                         -------    -------    -------
                                                         $  (770)   $(1,395)   $(1,647)
                                                         =======    =======    =======
</TABLE>

                                      F-21
<PAGE>   78
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets, liabilities and the valuation allowance are
as follows:

<TABLE>
<CAPTION>
                                                                1998        1999
                                                              --------    --------
                                                                 (IN THOUSANDS)
<S>                                                           <C>         <C>
Deferred tax assets:
Receivables, principally due to allowance for doubtful
  accounts..................................................  $    475    $    977
Net operating loss carry forwards...........................     9,667      16,871
Accrued liabilities not currently deductible................       124         354
Unrealized loss on hedging contract.........................       157          --
Intangible assets; differences in book and tax
  amortization..............................................        --       3,043
Compensation related to stock options.......................        --         720
Other.......................................................        --         200
                                                              --------    --------
     Total deferred tax assets..............................    10,423      22,165
Valuation allowance.........................................    (6,273)    (17,798)
                                                              --------    --------
     Net deferred tax assets................................     4,150       4,367
                                                              --------    --------
Deferred tax liabilities:
Property and equipment, principally due to accelerated
  depreciation..............................................    (3,423)     (4,367)
Intangible assets; differences in book and tax
  amortization..............................................      (727)         --
Differences between the tax basis and fair value of
  intangibles and fixed assets acquired in stock-based
  acquisitions..............................................   (24,844)    (45,640)
                                                              --------    --------
     Total deferred tax liabilities.........................   (28,994)    (50,007)
                                                              --------    --------
Net deferred tax liability..................................  $(24,844)   $(45,640)
                                                              ========    ========
</TABLE>

     The valuation allowance has increased (decreased) by approximately $.8
million, $(1.2) million and $11.5 million for the years ended December 31, 1997,
1998 and 1999, respectively. Management has considered certain tax planning
strategies as permitted under SFAS No. 109, "Accounting for Income Taxes."
Management has determined that the tax benefits associated with the recorded
deferred tax assets, net of valuation allowance, are more likely than not
realizable through future taxable income and future reversals of existing
taxable temporary differences.

     At December 31, 1999, Citadel Communications has an alternative minimum tax
credit (AMT) carry forward of approximately $126,000. AMT credits are available
to be carried forward indefinitely and may be utilized against regular federal
tax to the extent they do not exceed computed AMT calculations.

                                      F-22
<PAGE>   79
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(14)  QUARTERLY RESULTS (UNAUDITED)

     The following table presents the Company's selected unaudited quarterly
results for eight quarters ended December 31, 1999. The Company believes that
all necessary adjustments have been made to present fairly the related quarterly
results (in thousands except for per share amounts).

<TABLE>
<CAPTION>
                                       FIRST       SECOND      THIRD       FOURTH
                                      QUARTER     QUARTER     QUARTER     QUARTER       TOTAL
                                      --------    --------    --------    --------    ---------
                                                FOR THE YEAR ENDED DECEMBER 31, 1998
<S>                                   <C>         <C>         <C>         <C>         <C>
Net broadcasting revenue(1).........  $ 27,836    $ 34,399    $ 35,437    $ 35,640    $ 133,312
Operating income/(loss)(1)..........      (907)      2,982       3,805       5,248       11,128
Net income (loss)...................    (5,115)     (1,713)        547       2,350       (3,931)
Net loss applicable to common
  shares............................    (8,687)     (5,200)     (3,216)     (1,414)     (18,517)
Basic and diluted net loss per
  common share......................  $(217.18)   $(130.00)   $ (80.41)   $ (35.35)   $ (462.93)

                                                FOR THE YEAR ENDED DECEMBER 31, 1999
Net broadcasting revenue(1).........  $ 31,192    $ 41,286    $ 50,494    $ 55,523    $ 178,495
Operating income/(loss)(1)..........      (338)      6,178       6,888       5,969       18,697
Net income (loss)...................    (5,181)        673         455      (4,875)(2)    (8,928)
Net loss applicable to common
  shares............................    (9,194)     (3,340)     (2,841)     (7,656)     (23,031)
Basic and diluted net loss per
  common share......................  $(229.85)   $ (82.93)   $ (63.13)   $(170.13)   $ (540.77)
</TABLE>

---------------
(1) Net broadcasting revenue and operating income/(loss) amounts have been
    adjusted for discontinued operations for all quarters presented above.

(2) Represents $1.7 million amortization of deferred compensation, additional
    bad debt reserves, accrual of year 2000 estimated losses for discontinued
    operations and increased depreciation, amortization and interest expense due
    to acquisitions.

(15)  SUPPLEMENTAL FINANCIAL INFORMATION

     The Company paid cash of approximately $6.7 million, $16.1 million and
$23.1 million for interest and approximately $2,000, $287,000 and $675,000 for
taxes for the years ended December 31, 1997, 1998 and 1999, respectively.

     Barter revenue included in gross broadcasting revenue and barter expenses
included in station operating expenses amounted to approximately $7.4 million,
$11.0 million and $18.3 million and $7.1 million, $9.5 million and $11.7 million
for the years ended December 31, 1997, 1998 and 1999, respectively.

     A summary of additions and deductions related to the allowance for doubtful
accounts for the years ended December 31, 1997, 1998 and 1999 follows:

<TABLE>
<CAPTION>
                                               BALANCE AT                                 BALANCE AT
                                              BEGINNING OF                                  END OF
                                                 PERIOD       ADDITIONS    DEDUCTIONS       PERIOD
                                              ------------    ---------    ----------    -------------
                                                                   (IN THOUSANDS)
<S>                                           <C>             <C>          <C>           <C>
Year ended December 31, 1997................     $  621        $1,016       $  (828)        $  809
Year ended December 31, 1998................        809         1,201          (823)         1,187
Year ended December 31, 1999................      1,187         6,702        (5,446)         2,443
</TABLE>

                                      F-23
<PAGE>   80
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

'The following supplemental information is related to the consolidated
statements of cash flows. The Company recorded the following significant
non-cash items for the years ended December 31, 1997, 1998 and 1999:

<TABLE>
<CAPTION>
                                                                 1997       1998       1999
                                                                -------    -------    -------
                                                                       (IN THOUSANDS)
<S>                                                             <C>        <C>        <C>
Difference between tax basis and fair value of intangible
  assets and fixed assets acquired in stock-based
  acquisitions..............................................    $22,400    $ 3,445    $23,857
                                                                =======    =======    =======
Dividends for exchangeable preferred stock..................    $ 6,551    $14,586    $14,103
                                                                =======    =======    =======
Note payable issued for property and equipment..............    $    --    $   120    $    --
                                                                =======    =======    =======
Transfer of fixed assets and intangible assets, to assets
  held for sale for pending disposition.....................    $    --    $25,938    $    --
                                                                =======    =======    =======
Unrealized loss on hedging contract, net of tax.............    $    --    $   236    $    --
                                                                =======    =======    =======
Accretion of exchangeable preferred stock issuance costs....    $    82    $   180    $   206
                                                                =======    =======    =======
</TABLE>

(16)  CITADEL COMMUNICATIONS FINANCIAL DATA

     The following is summary consolidated financial data for Citadel
Communications and its subsidiary, the Company.

<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                                         --------------------
                                                           1998        1999
                                                         --------    --------
                                                            (IN THOUSANDS)
<S>                                                      <C>         <C>
Consolidated Balance Sheets:
  Current assets.....................................    $168,055    $ 76,154
  Property and equipment, net........................      33,029      68,035
  Intangible assets, net.............................     266,446     538,664
  Other assets.......................................       4,238      33,760
                                                         --------    --------
          Total assets...............................    $471,768    $716,613
                                                         ========    ========
Current liabilities..................................    $ 15,055    $ 21,377
Notes payable, less current maturities...............          --     132,000
Senior subordinated notes payable....................     210,091     210,509
Other liabilities....................................      25,884      48,156
                                                         --------    --------
          Total liabilities..........................     251,030     412,042
Exchangeable preferred stock.........................     116,775      85,362
Shareholders' equity.................................     103,963     219,209
                                                         --------    --------
          Total liabilities and shareholders'
            equity...................................    $471,768    $716,613
                                                         ========    ========
</TABLE>

                                      F-24
<PAGE>   81
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                                         --------------------
                                                           1998        1999
                                                         --------    --------
                                                            (IN THOUSANDS)
<S>                                                      <C>         <C>
Consolidated Statements of Operations:
  Net broadcasting revenue...........................    $133,312    $178,495
  Operating income...................................      11,128      18,697
  Interest expense...................................      18,126      25,385
  Other income, net..................................      (1,651)       (388)
                                                         --------    --------
  Income (loss) before income taxes and discontinued
     operations......................................      (5,347)     (6,300)
  Deferred income tax (benefit)......................      (1,395)     (1,647)
                                                         --------    --------
  Loss from continuing operations....................      (3,952)     (4,653)
  Income (loss) from discontinued operations, net of
     tax.............................................          21      (4,275)
                                                         --------    --------
          Net loss...................................    $ (3,931)   $ (8,928)
                                                         ========    ========
Dividend requirement for exchangeable preferred
  stock..............................................    $ 14,586    $ 14,103
                                                         ========    ========
</TABLE>

(17)  CITADEL LICENSE FINANCIAL DATA

     The operations of Citadel License, a wholly-owned subsidiary of the
Company, until its merger into the Company on December 28, 1999, included
holding FCC licenses for all stations owned by the Company and the amortization
of these licenses. Citadel License had guaranteed the 1997 Notes and 1998 Notes
(See Note 9). The guarantee was full, unconditional and joint and several. The
separate financial statements of Citadel License have not been presented because
management of the Company has determined they would not be material to
investors. There are no costs or expense of Citadel License that are borne by
the Company. Citadel License was the only subsidiary of the Company. The
financial data for Citadel License has only been presented for 1998 due to its
merger into the Company during 1999.

     The following is summary financial data for Citadel License:

<TABLE>
<CAPTION>
                                                              DECEMBER 31, 1998
                                                              -----------------
                                                               (IN THOUSANDS)
<S>                                                           <C>
Balance Sheet:
  Assets held for sale................................            $  9,482
  Intangible assets, net (broadcast licenses).........             150,451
                                                                  --------
          Total assets................................            $159,933
                                                                  ========
          Shareholders' equity........................            $159,933
                                                                  ========
Statement of Operations:
  Amortization expense................................              12,036
                                                                  --------
          Net loss....................................            $(12,036)
                                                                  ========
</TABLE>

(18)  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The following summary presents a description of the methodologies and
assumptions used to determine the estimated fair values for the Company's
financial instruments as required by SFAS No. 107, "Disclosures about Fair Value
of Financial Instruments."

                                      F-25
<PAGE>   82
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Limitations

     Fair value estimates are made at a specific point in time and are based on
relevant market information and information about the financial instrument; they
are subjective in nature and involve uncertainties and matters of judgment and,
therefore, cannot be determined with precision. These estimates do not reflect
any premium or discount that could result from offering for sale at one time the
Company's entire holdings of a particular instrument. Changes in assumptions
could significantly affect these estimates.

     Since the fair value is estimated as of December 31, 1999, the amounts that
will actually be realized or paid at settlement or maturity of the instruments
could be significantly different.

Cash Equivalents, Accounts Receivable, Accounts Payable, Due From Related
Parties and Accrued Liabilities

     The carrying amount is assumed to be the fair value because of the
liquidity or short-term maturity of these instruments.

Senior Subordinated Notes, Note Payable, Exchangeable Preferred Stock and Other
Long-Term Obligations

     The fair value of the Company's Senior Subordinated Notes, Exchangeable
Preferred Stock and other long-term obligations approximate the terms in the
marketplace at which they could be replaced. Therefore, the fair value
approximates the carrying value of these financial instruments.

     In 1996, the Company entered into an interest rate swap agreement with a
financial institution. The fair value of the interest rate swap as of December
31, 1998 was approximately $(393,000) as determined by the financial
institution, and represents an unrealized loss. The fair value of the interest
rate swap is the estimated amount that the financial institution would receive
or pay to terminate the swap agreement at the reporting date, taking into
account current interest rates and the current creditworthiness of the swap
counterparties. The interest rate swap agreement was terminated on December 10,
1999.

(19)  TRANSACTIONS WITH RELATED PARTIES

Leaseback

     On December 29, 1995, the Company entered into a sale-leaseback transaction
with an entity controlled by a principal shareholder, officer and director of
Citadel Communications and an officer and director of the Company. The Company
made payments of approximately $207,000, $207,000 and $252,000 in 1997, 1998 and
1999, respectively. This operating lease was terminated effective January 1,
2000.

Noncompetition Agreement

     In connection with an acquisition, the Company entered into a
noncompetition agreement with an entity whose president is also a director of
Citadel Communications and the Company. In consideration for such noncompetition
agreement, the Company paid the entity $100,000 in 1997 and 1998. The agreement
expired during 1998.

     In connection with an acquisition, the Company entered into a seven-year
noncompetition agreement with a previous owner who subsequently became a
director of Citadel Communications and the Company, which provides for
compensation of $250,000 per year. In consideration for such noncompetition
agreement, the Company paid the individual approximately $83,000 in 1999.

                                      F-26
<PAGE>   83
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Transactions with Connect Communications

     On October 1, 1999, the Company acquired certain assets and subscriber
agreements of Connect Communications Corporation, an internet service provider
in Arkansas, in exchange for extinguishment of approximately $100,000 in
accounts receivable and certain equipment owned by the Company. The son of a
director of Citadel Communications and the Company, is a director and
shareholder of Connect Communications Corporation.

     Connect Communications Corporation also provided telephone service for the
Little Rock, Arkansas market and on a limited basis for eFortress during 1999.
The value of the telephone service provided in 1999 was approximately $124,000.
As of December 31, 1999 Connect Communications Corporation owes the Company
approximately $69,000 for third party telephone charges, which were to be
reimbursed by Connect Communications Corporation.

Corporate Events

     During 1998, the Company paid an aggregate of approximately $76,000 in
respect of accommodations and activity costs in connection with corporate events
held at a facility owned by a separate entity, which is controlled by a
principal shareholder, officer and director of Citadel Communications and an
officer and director of the Company.

(20)  COMMITMENTS AND CONTINGENCIES

     Liabilities for loss contingencies arising from claims, assessments,
litigation, fines and penalties, or other sources are recorded when it is
probable that a liability has been incurred and the amount of the liability can
be reasonably estimated.

Litigation

     The Company is involved in certain legal actions and claims arising in the
ordinary course of business. Management believes that such litigation and claims
will be resolved without a material effect on the Company's financial position.

     The Company has received two civil investigative demands ("CIDs") from the
Antitrust Division of the U.S. Department of Justice. One CID addresses the
Company's acquisition of station KRST in Albuquerque, New Mexico and the second
CID addresses the joint sales agreement for stations in Spokane, Washington and
Colorado Springs, Colorado. The Company has provided the requested information
in response to each CID, and at present has been given no indication from the
Department of Justice regarding its intended future actions, for the CID
involving KRST in Albuquerque. On April 28, 1999, the Department of Justice
filed a lawsuit in the United States District Court for the District of Columbia
against the Company and Triathlon Broadcasting Company alleging that they, as a
result of a joint sales agreement, eliminated price competition between their
radio stations in Spokane and Colorado Springs. A proposed Final Judgement, the
terms of which were stipulated by the parties, was also filed with the court on
April 28, 1999. The Final Judgement was filed with the Court on August 26, 1999,
and the investigation was dropped by the Department of Justice. The JSA
involving these stations was terminated on April 30, 1999.

Local Marketing Agreements

     At December 31, 1999, the Company has local marketing agreements with
KATG-FM in Reno, Nevada and KWUN-AM in Salt Lake City, UT. The agreements
principally provide for the Company to supply specified programming to the
brokered stations and enable the sales staff of the Company to sell advertising
time on the stations for fixed fees to be paid by the Company, pending its
acquisition by the Company. The Company's
                                      F-27
<PAGE>   84
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

consolidated financial statements include the broadcasting revenue and station
operating expenses of the brokered stations. The fees paid under local marketing
agreements amounted to approximately $1.9 million, $.8 million and $.3 million
for the years ended December 31, 1997, 1998 and 1999, respectively.

Joint Sales Agreements (JSA)

     On January 15, 1996, the Company entered into a joint sales agreement to
sell advertising for radio stations KEYF-AM/FM, KUDY-AM and KKZX-FM, in Spokane,
Washington and radio stations KVOR-AM, KSPZ-FM, KTWK-AM and KVUU-FM in Colorado
Springs, Colorado. As stated in the JSA, the JSA revenue is calculated as 60% of
the broadcast cash flows of these radio stations and all Company owned radio
stations in these markets, with the exception of KKLI-FM in Colorado Springs
which is not included in the JSA calculation. The JSA was terminated on April
30, 1999.

     On July 3, 1997, the Company acquired all of the issued and outstanding
capital stock of Tele-Media Broadcasting Company ("Tele-Media"). As a result of
this acquisition, the Company assumed a Tele-Media JSA for radio station WKQV-AM
in Wilkes-Barre/Scranton, Pennsylvania. As stated in the JSA, JSA revenue is
calculated as the sum of (i) a base monthly payment of $5,000, and (ii) an
additional monthly fee ranging from 5% to 8% of revenues (as defined in the JSA)
based on monthly revenues of WKQV-AM and of its simulcast station, WARM-AM. The
JSA was terminated on December 31, 1999.

LEASE COMMITMENTS

     The Company leases certain tower sites, transmitters and equipment,
automobiles, office equipment and an airplane. The following is a schedule by
year of future minimum rental payments required under operating leases that have
an initial or remaining noncancelable lease term in excess of one year as of
December 31, 1999:

<TABLE>
<CAPTION>
                                                             (IN THOUSANDS)
<S>                                                          <C>
2000.......................................................     $  3,753
2001.......................................................        3,508
2002.......................................................        3,244
2003.......................................................        2,993
2004.......................................................        2,575
Thereafter.................................................        4,005
                                                                --------
                                                                $ 20,078
                                                                ========
</TABLE>

     Total rental expense was approximately $2.0 million, $2.7 million and $3.5
million for the years ended December 31, 1997, 1998 and 1999, respectively.

Defined Contribution Plan

     The Company has a defined contribution 401(k) plan for all employees who
are at least 21 years of age and have worked at least 1,000 hours in the year.
Under the 401(k) plan, employees can contribute up to 20% of their compensation,
subject to the maximum contribution allowed by the Internal Revenue Code.
Participants vest immediately in their contributions. The Company may make
discretionary contributions as approved by the Board of Directors. Participants'
rights to amounts contributed by the Company vest on a graded schedule over a
five-year period. During 1997, 1998 and 1999 the Company contributed $299,000,
$448,000 and $532,000, respectively, which represented a two percent matching of
employee contributions to the 401(k) plan.

                                      F-28
<PAGE>   85
                          CITADEL BROADCASTING COMPANY
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(21)  SUBSEQUENT EVENTS

     On January 23, 2000, the Company entered into a stock purchase agreement
with Bloomington Broadcasting Holdings, Inc. and its stockholders to purchase
all of the issued and outstanding capital stock of Bloomington Broadcasting
Holdings for the aggregate purchase price of approximately $176.0 million in
cash. This amount includes repayment of indebtedness of Bloomington Broadcasting
Holdings that may be outstanding at the time of closing and a deferred
obligation relating to a recent radio station purchase by Bloomington
Broadcasting Holdings. Through its subsidiaries, Bloomington Broadcasting
Holdings is expected to own and operate at closing thirteen FM and seven AM
radio stations serving the Grand Rapids, Michigan; Columbia, South Carolina;
Chattanooga, Tennessee; Johnson City/Kingsport/Bristol, Tennessee; and
Bloomington, Illinois markets.

     On January 31, 2000, the Company entered into an asset purchase agreement
to acquire one FM radio station and one AM radio station serving the Worcester,
Massachusetts market for the purchase price of approximately $0.9 million.

     On February 10, 2000, the Company acquired radio station WXLO-FM in
Worcester, MA and entered into a local marketing agreement, pending acquisition,
with radio station WORC-FM, also in Worcester. The purchase price for WXLO-FM
was $21.0 million and the Company deposited into escrow the purchase price of
$3.5 million for WORC-FM. The acquisitions will be accounted for using the
purchase method of accounting.

     On February 10, 2000, the Company's credit facility was amended and
restated, increasing the total commitment from $400.0 million to $500.0 million.
The $100.0 million increase was allocated $75.0 million to the revolving loans
and $25.0 million to the term loans.

     On February 11, 2000, Citadel Communications completed an offering of
4,750,000 shares of its common stock at a price of $51.50 per share. The
proceeds to Citadel Communications from the offering, net of underwriting
discounts and commissions, were approximately $234.8 million. The proceeds were
contributed by Citadel Communications to the Company, a portion thereof was used
to repay a portion of the indebtedness under the Company's credit facility and
the remainder will be used to fund pending acquisitions.

                                      F-29
<PAGE>   86

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                     DESCRIPTION OF EXHIBIT(1)
-------                    -------------------------
<S>       <C>
2.1       Asset Purchase Agreement dated October 27, 1999 by and
          between Citadel Broadcasting Company and Broadcasting
          Partners Holdings, L.P. (incorporated by reference to
          Exhibit 2.1 to Citadel Communications Corporation's
          Quarterly Report on Form 10-Q for the fiscal quarter ended
          September 30, 1999).
2.2       Stock Purchase Agreement dated April 30, 1999 by and between
          Robert F Fuller and Citadel Broadcasting Company
          (incorporated by reference to Exhibit 2.1 to Citadel
          Broadcasting Company's Current Report on Form 8-K filed on
          September 14, 1999).
2.3       Stock Purchase Agreement dated April 30, 1999 by and between
          Joseph N Jeffrey, Jr. and Citadel Broadcasting Company
          (incorporated by reference to Exhibit 2.2 to Citadel
          Broadcasting Company's Current Report on Form 8-K filed on
          September 14, 1999).
2.4       Asset Purchase Agreement dated December 3, 1999 by and among
          Liggett Broadcast, Inc., Rainbow Radio, LLC, New Tower,
          Inc., LLJ Realty, LLC, Robert G. Liggett, Jr., Citadel
          Communications Corporation, Citadel Broadcasting Company and
          Citadel License, Inc. (incorporated by reference to Exhibit
          2.4 to Citadel Communications Corporation's Current Report
          on Form 8-K filed on December 10, 1999).
2.5       Purchase Agreement dated August 23, 1999 by and among Cat
          Communications, Inc., Desert Communications III, Inc. and
          Citadel Broadcasting Company (incorporated by reference to
          Exhibit 2.1 to Citadel Communications Corporation's Current
          Report on Form 8-K filed January 6, 2000).
2.6       Amendment to Purchase Agreement dated December 22, 1999 by
          and among Cat Communications, Inc., Desert Communications
          III, Inc. and Citadel Broadcasting Company (incorporated by
          reference to Exhibit 2.2 to Citadel Communications
          Corporation's Current Report on Form 8-K filed January 6,
          2000).
2.7       Stock Purchase Agreement dated January 23, 2000 by and among
          Bloomington Broadcasting Holdings, Inc., the stockholders of
          Bloomington Broadcasting Holdings, Inc. and Citadel
          Broadcasting Company.
3(i)(a)   Restated Articles of Incorporation of Citadel Broadcasting
          Company (incorporated by reference to Exhibit 3(i)(a) to
          Citadel Broadcasting Company's Registration Statement No.
          333-36771 on Form S-4).
3(i)(b)   Amendment to Certificate of the Designations, Voting Powers,
          Preferences and Relative, Participating, Optional and Other
          Special Rights and Qualifications, Limitations or
          Restrictions of the 13% Series A Exchangeable Preferred
          Stock and the 13% Series B Exchangeable Preferred Stock of
          Citadel Broadcasting Company (incorporated by reference to
          Exhibit 3(i)(b) to Citadel Broadcasting Company's
          Registration Statement No. 333-36771 on Form S-4).
3(ii)     Bylaws of Citadel Broadcasting Company, as amended
          (incorporated by reference to Exhibit 3(ii)(a) to Citadel
          Broadcasting Company's Registration Statement No. 333-36771
          on Form S-4).
4.1       Indenture dated as of July 1, 1997 among Citadel
          Broadcasting Company, Citadel License, Inc. and The of New
          York, as Trustee, with the forms of 10 1/4% Senior
          Subordinated Notes due 2007 and 10 1/4% Series B Senior
          Subordinated Notes due 2007 included therein (incorporated
          by reference to Exhibit 4.1 to Citadel Broadcasting
          Company's Registration Statement No 333-36771 on Form S-4).
4.2       Indenture dated as of July 1, 1997 among Citadel
          Broadcasting Company, Citadel License, Inc. and The Bank of
          New York, as Trustee, with the forms of 13 1/4% Exchange
          Debentures due 2009 and 13 1/4% Series B Exchange Debentures
          due 2009 included therein (incorporated by reference to
          Exhibit 4.2 to Citadel Broadcasting Company's Registration
          Statement No. 333-36771 on Form S-4).
</TABLE>
<PAGE>   87

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                     DESCRIPTION OF EXHIBIT(1)
-------                    -------------------------
<S>       <C>
4.3       Amendment to Certificate of the Designations, Voting Powers
          Preferences and Relative, Participating, Optional and Other
          Special Rights and Qualifications, Limitations or
          Restrictions of the 13 1/4% Series A Exchangeable Preferred
          Stock and the 13 1/4% Series B Exchangeable Preferred Stock
          of Citadel Broadcasting Company (incorporated by reference
          to Exhibit 3(i)(b) to Citadel Broadcasting Company's
          Registration Statement No. 333-36771 on Form S-4).
4.4       Indenture dated as of November 19, 1998 among Citadel
          Broadcasting Company, Citadel License, Inc. and The Bank of
          New York, as Trustee, with the form of 9 1/4% Senior
          Subordinated Notes due 2008 included therein (incorporated
          by reference to Exhibit 4.1 to Citadel Communications
          Corporation's Current Report on Form 8-K filed November 30,
          1998).
4.5       Global Assignment Agreement dated as of February 10, 2000
          among Citadel Broadcasting Company, Citadel Communications
          Corporation, Credit Suisse First Boston, as Administrative
          Agent, Collateral Agent and Issuing Bank, and the lenders
          named therein (incorporated by reference to Exhibit 4.5 to
          Citadel Communications Corporation's Annual Report on Form
          10-K for the fiscal year ended December 31, 1999).
4.6       Amended and Restated Credit Agreement dated as of February
          10, 2000 among Citadel Broadcasting Company, Citadel
          Communications Corporation, Credit Suisse First Boston, as
          lead Arranger, Administrative Agent and Collateral Agent,
          FINOVA Capital Corporation, as Syndication Agent, First
          Union National Bank and Fleet National Bank, as
          Co-Documentation Agents, and the lenders named therein
          (incorporated by reference to Exhibit 4.6 to Citadel
          Communications Corporation's Annual Report on Form 10-K for
          the fiscal year ended December 31, 1999).
9         Amended and Restated Voting Trust Agreement dated as of
          October 15, 1997 among Citadel Communications Corporation,
          ABRY Broadcast Partners II, L.P., ABRY/Citadel Investment
          Partners, L.P., Harlan Levy as Trustee, and J. Walter
          Corcoran and Christopher Hall (incorporated by reference to
          Exhibit 9 to Citadel Broadcasting Company's Registration
          Statement No. 333-36771 on Form S-4).
10.1  *   Employment Agreement dated as of June 28, 1996 among
          Lawrence R. Wilson, Citadel Broadcasting Company and Citadel
          Communications Corporation (incorporated by reference to
          Exhibit 10.1 to Citadel Broadcasting Company's Registration
          Statement No. 333-36771 on Form S-4).
10.2  *   Citadel Communications Corporation 1996 Equity Incentive
          Plan, as amended (incorporated by reference to Exhibit 10.2
          to Citadel Broadcasting Company's Registration Statement No.
          333-36771 on Form S-4).
10.3  *   Citadel Communications Corporation Nonqualified Stock Option
          Agreement made and entered into as of June 28, 1996 between
          Citadel Communications Corporation and Lawrence R. Wilson
          (incorporated by reference to Exhibit 10.3 to Citadel
          Broadcasting Company's Registration Statement No. 333-36771
          on Form S-4).
10.4  *   Form of Citadel Communications Corporation Stock Option
          Agreement for grants effective as of December 21, 1994
          (incorporated by reference to Exhibit 10.4 to Citadel
          Broadcasting Company's Registration Statement No 333-36771
          on Form S-4).
10.5  *   Form of Citadel Communications Corporation Stock Option
          Agreement for grants effective as of February 21, 1994
          (incorporated by reference to Exhibit 10.5 to Citadel
          Broadcasting Company's Registration Statement No 333-36771
          on Form S-4).
10.6  *   Form of Citadel Communications Corporation Stock Option
          Agreement for grants effective as of January 1, 1996
          (incorporated by reference to Exhibit 10.26 to Citadel
          Broadcasting Company's Annual Report on Form 10-K for the
          fiscal year ended December 31, 1997).
10.7  *   Citadel Communications Corporation 1999 Long-Term Incentive
          Plan (incorporated by reference to Exhibit 10.33 to
          Amendment No. 2 to Citadel Communications Corporation's
          Registration Statement No. 333-79277 on Form S-1).
</TABLE>
<PAGE>   88

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                     DESCRIPTION OF EXHIBIT(1)
-------                    -------------------------
<S>       <C>
10.8      National Radio Sales Representation Agreement dated October
          1, 1998 between McGavren Guild Radio, Inc. and Citadel
          Broadcasting Company (incorporated by reference to Exhibit
          10.35 to Amendment No. 2 to Citadel Communications
          Corporation's Registration Statement No. 333-79277 on Form
          S-1).
10.9      Consulting Agreement dated August 31, 1999 by and between
          Robert F Fuller and Citadel Broadcasting Company
          (incorporated by reference to Exhibit 10.15 to Citadel
          Communications Corporation's Annual Report on Form 10-K for
          the fiscal year ended December 31, 1999).
10.10     Asset Purchase Agreement dated November 23, 1998 by and
          among Wicks Broadcast Group Limited Partnership, WBG License
          Co., L.L.C., Butternut Broadcasting Company, Inc., WBG
          Binghamton License Co., Inc. and Citadel Broadcasting
          Company (incorporated by reference to Exhibit 2.1 to Citadel
          Broadcasting Company's Amendment No. 1 to Current Report on
          Form 8-K/A filed December 16, 1998).
23.1      Consent of KPMG LLP.
27        Financial Data Schedule.
</TABLE>

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

* Management contract or management compensatory plan or arrangement.

(1) In the case of incorporation by reference to documents filed by the
    Registrant under the Exchange Act of 1934, as amended, the Registrant's file
    number under such Act is 333-36771.